There's a rule of thumb in the advertising industry that ad spend goes up and down alongside GDP, and the current Covid-19 pandemic has proven this to be true: before coronavirus, the global advertising market was set to grow to $865 billion USD by 2024.
Ad spend is down by 9% on average across Europe since the start of the pandemic, and advertising executives expect the $20 billion TV ad market will drop by 33% in 2020.
However, this does not mean that businesses should not be spending money on ads; the pandemic has pushed advertisers to smarten up their ad strategy.
While consumer spending is down in many sectors, video streaming and gaming sectors are doing very well, with more people staying at home and looking for ways to entertain themselves.
A survey by Deloitte showed that the average American now subscribes to four video streaming services, up from three pre-COVID.
How do YouTube ads work?
Savvy advertisers will be keen to take advantage of this rise in home media consumption during the pandemic. Video ads offer advertisers a cost-effective and convenient way to advertise to consumers.
One of the most popular type of video advertising online is YouTube ads - adverts which appear at the beginning and in ad breaks during YouTube videos. YouTube has over two billion visitors per month, and YouTube PPC ads can be targeted at a specific audience - making them much more likely to turn into conversions.
There are three types of YouTube video ads advertisers can use:
- Discovery ads
- InStream ads
- and Bumper ads
Discovery ads appear as a sponsored video suggestion in the top right sidebar. These ads are pay per view (PPV), and advertisers pay for them as soon as a consumer clicks to watch.
InStream ads play before the YouTube video, and a 'skip ad' button allows viewers to skip them after five seconds. These ads are also PPV, but they only count as being 'viewed' when watched for 30 seconds or more.
Bumper ads are six-second long PPV ads which appear before the main video. They are not skippable, and they're cheaper than other kinds of YouTube ads, probably because viewers don't 'choose' whether or not to watch them.
In terms of costs, YouTube advertising offers great value.
Here at Pledge Consultancy, we typically see an average cost of 0.03p per video view, which is excellent value compared to many other forms of advertising, particularly considering you can target your video only at viewers watching videos related to your industry.
Where can you get a YouTube video ad created?
There are lots of economical options for creating YouTube video ads. YouTube themselves offer a Creative Partner Platform, which allows advertisers to search for agencies based on their budget and the kind of ad they want to produce.
Freelance websites like People Per Hour and Fiverr are also home to a wealth of untapped talent: animators and editors who can produce ads and videos to your exact specification, even on a tight budget.