Whether organic or paid, YouTube remains one of the most underrated platforms on the Internet. And when one of the world’s smartest paid search experts calls it “the most mispriced ad inventory on the Internet,” you ignore it at your own peril.
What I really like about YouTube is how it gives you the flexibility to consume media in whatever way works best for you at any given moment.
- Shorts are aimed at someone who slides in a vertical video at 11 p.m. with the sound on, half engaged, looking for entertainment. Interesting content captivates the mind and helps them discover new creators. Ads therefore have approximately two seconds to gain the next two seconds.
- YouTube InStream is a totally different planet. The viewer chose to watch a 15-minute video on an obscure, niche topic that they either love or are just starting to learn about. They are installed, with an intention and attention that is not present with the Shorts. Your ad should have the same severity as the content it interrupts.
But most YouTube ads advice is written universally and aimed at brands that spend more than seven figures per month on ads. This article is more nuanced and is aimed at more realistic advertisers with a smaller budget.
The Biggest YouTube Setup Mistake…and How to Do It Right
Most brands don’t understand the differences between YouTube formats. They create a Demand generation campaignupload a video, budget $100/day and let Google control their fate. This, of course, means that Google will default to the easiest placement to serve, not the one that converts for you.
What we do for our Shopify customers:
- Separate Demand Gen campaigns by placement type: one for Shorts, one for InStream, one for Image Surfaces if that makes sense.
- Match creative format to location. The short films receive a vertical video, a hook from the first second, integrated subtitles. In-Stream gets the longer, story-driven cut.
- Don’t judge performance solely on last click ROAS. Monitor the increase in branded searches and direct traffic volume. YouTube plants seeds that Search harvests weeks later.
- Keep CPMs honest. We’ve seen CPMs of $5 on Demand Gen compared to $25 on Meta, but the calculations only check if the placement is correct.
Why YouTube via Demand Gen offers the most control
Demand Gen gives you the ability to target specific audiences. This is different from Maximum performancewhere you can add any audiences you want, but they are treated as a signal to guide the system.
Here’s how it works at the most basic level in bidding strategies:
- No targeting settings = 100% algorithmic targeting.
- ROAS or CPA target only = it tries to achieve your goal.
- Adding audiences = limited campaign exposure.
Adding audiences can have the effect of increasing costs, so you need to make sure everything fits what you’re trying to do on the business side.
A very interesting option from Demand Gen and not available on paid social networks like Facebook or Instagram is to create a list of people who have searched for certain terms.
So if I was running a smaller campaign with a more modest budget but only wanted to appear when someone searched for (kitchen cabinets), I can be as specific as I want. This level of control is a welcome feature.
A good place to start is your top performing search terms from Shopping, Performance Max, and other campaigns. Create an “intent audience” with these – especially useful for B2B.
I can also rely on my customer list: email subscribers, website visitors, invalid buyers who purchased from you six months ago but not in the last two weeks. You can select all criteria for which you have data.
Then, like Facebook and Instagram, you can use it to create lookalike audiences to target people who are most similar to your existing customers. Three is just Google’s affinity list and in market segments they have a ton of stuff here.
Don’t forget: If you want to run a retargeting campaignTurn off optimized targeting so it doesn’t exceed your default audience. No matter what audience you create, if you leave it turned on, you can see around 20% more conversions for the same cost. If you’re not trying to run retargeting, I would generally keep it enabled.
Note for Small Budgets: What High-Spending Accounts Can Afford to Do But You Can’t
When running smaller or B2B-focused campaigns, it’s very important to give YouTube strong audience signals so it knows who to target, since it doesn’t get as many signals from conversion actions.
Larger campaigns and older/bigger accounts with tons of conversion data can broaden the targeting and let the bidding strategy figure it out. This is what we use by default, unless we see something operationally that indicates otherwise.
It’s also important to review placements regularly and make sure you’re excluding items that aren’t converting or generating unwanted leads. For bigger budgets, it’s hygiene. For you, it’s do or die.
There is every reason to remain optimistic about YouTube
YouTube’s diversity and relative isolation from the scale of machine learning that has taken over other types of advertising is an immense strength.
I can target people based on life events and things of that nature – these are very broad and don’t accurately reflect whether someone might want what I have, so I don’t like these options. I can target based on household income, parental status, and other similar demographics. I can set exclusions to block people who have purchased from me recently.
But the important thread here is being able to choose when and where to show my ads. I might choose different audience segments for different elements of the media mix. I can have different channels targeting different ad types. If all my creations are horizontal, I probably only want to appear in the feed – vice versa for vertical videos and Shorts.
But at the end of the day, the platform is the platform. The setup of your campaign is what really decides who you show up in front of. If you’re wrong, you might as well donate your budget to charity where it can do more good.
Get it right and YouTube becomes one of the most effective acquisition channels in your media stack.
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Featured image: Roman Samborskyi/Shutterstock
