Why SaaS Companies Must Start Advertising on YouTube


In February 2005, YouTube was launched as a place for people to watch and upload videos. Since then, it has evolved into one of the world’s largest and most popular video-sharing platforms. It is estimated that there are over 1.5 billion unique users per month on YouTube, generating more than $7 billion in ad revenue each quarter year.

SaaS companies around the globe are taking advantage of YouTube’s popularity to advertise their products and services. The results are very promising. In fact, a study by Single Grain found that the average conversion rate of a YouTube ad is 14%. That’s slightly higher than the average conversion rate of Facebook Ads, which is 10%.

This article will discuss the benefits of advertising on YouTube and how SaaS companies can use this channel to help grow their business.

YouTube Ad Algorithm Targets the Right Audience

The ad algorithms on YouTube are very advanced in relevant audience targeting. It looks at a user’s search history, browsing behavior, and interests to determine which ads they should see. Meaning you can target people who are already interested in your goods or services, making them more likely to click through on your ad and ultimately convert.

The algorithm works by using machine learning and artificial intelligence to analyze billions of data points from videos, channels, and other sources on YouTube. It then uses this information to determine which ads should appear next in your feed.

This means that if a user is watching a video about cooking, they might see an ad for a cooking product instead of another one about sports or music.

YouTube is a Dominant Video Platform

YouTube is the second largest search engine in the world, with over 5 billion videos being watched daily. It also has a significant viewership, reaching over 22.8 billion visits every month. This massive reach can help bring your company more leads and sales.

YouTube is also the most dominant and well-known video platform. It means that your advertisements will be considered more trustworthy and useful if placed in YouTube videos compared to videos on other sites.

Other research indicates that, on average, people spend about 18 minutes a day streaming videos on YouTube. This data can be quite significant as the longer someone stays on the platform, the more likely they are to see your ads.

Personalize Ad Placements with Ease

You can easily personalize and customize your ad placements on YouTube. The platform has several different placements that you can use, such as pre-roll, mid-roll, and post-roll ads.

Pre-roll ads are placed before a video starts playing. Mid-roll ads appear during a video and last for at least 15 seconds. Post-roll ads are shown after a video has finished playing.

There are also various video ad contents that you can produce, including;

Skippable in-stream ads

Skippable in-stream ads are the standard type of ads that you see on YouTube and other platforms. These advertisements are skippable after 5 seconds, and they’re usually around 15 seconds long.

Non-skippable in-stream ads

Contrary to skippable ads, non-skippable in-stream ads cannot be skipped, so you have to watch them until the end before going on with watching your video. These ads are usually around 15 seconds long.

In-feed video ads

In-feed video ads are the type of ads that appear in the feed tab on YouTube. These are videos suggested by YouTube once a user searches for content or keywords. They are also shown in a video’s related content section on the right.

Bumper ads

Similar to non-skippable ads, bumper ads must be watched until the end before you can watch Youtube content. However, they are usually only 6 seconds long and placed before a video. These ads are especially effective for mobile users.

Outstream ads

Outstream ads are the type of ads that appear outside of YouTube’s website or app. They show up on other websites and apps, as well as in mobile browsers. Outstream ads usually take the form of videos, banners, and native ads.

Masthead ads

Masthead ads are the type of ads that appear in the top banner on Youtube. They do not automatically play and can only be clicked on if you want to watch them. They are placed there by Google and are used to promote certain products or services (such as YouTube TV).

All of these ad formats can be customized based on the length of your video, the audience you’re targeting, and the type of video content that’s being shown. YouTube surely gives you the freedom to choose the right ad format that suits your business needs.

Advertising on YouTube is Cost-Effective

Creating YouTube ads is not just easy but also cost-effective. You won’t have to spend a fortune just to run an ad on the platform. Instead, you can simply create an ad and set a budget for it.

Once the campaign runs, YouTube will provide you with reports showing how much of your budget was spent and how many views each ad has gotten. This way, you can easily adjust your campaigns based on performance data.

The average cost of running a YouTube ad is quite low compared to other social media platforms like Facebook or Instagram. YouTube’s advertising fee, on average, costs $0.010 – $0.030 per view, while a Facebook ad costs $0.94 for every click and opening.

Track your Results with YouTube Analytics

You can keep track of your ads performance with YouTube Analytics. It gives you a breakdown of the number of views each ad has gotten and shows you which ones have received the most engagement (comments or likes). This information enables you to optimize your ads and improve their performance over time.

YouTube Analytics results give you an insight into your viewers’ demographics and preferences. It also lets you see what people search for on YouTube when they end up on your video and how this compares to your campaign keywords. This way, you can ensure that your ads target the right audience for optimum results.

Additionally, YouTube Analytics has tools that allow you to measure your campaigns’ performance based on cost-per-view or cost-per-engagement. You can even set up goals so that each time your video ads reach a certain amount of views (i.e., 20%), YouTube will create an ad campaign around that specific video.

Bonus! Some Tips

With the different advantages of Youtube ads above, let’s complement them with some pointers on how you can maximize your advertising efforts. Let’s discuss some practical and effective best practices.

  • Limit your video ads’ length – the shorter, the better
  • Create content with mobile viewers in mind
  • Include close captions for viewers on the go
  • Point out your call-to-action to help watchers what to do next
  • Opt for a voice-over if needed
  • Optimize your video by removing silences, background noises, unnecessary objects, etc.


YouTube ads can potentially be an essential cost-effective advertising strategy for SaaS companies. The YouTube ad algorithm is a powerful tool because it precisely targets the right audience and teaches more about them as they watch more videos on the platform. It also ensures that people watching relevant videos will see your ads.

YouTube Analytics, the platform’s reporting tool, is another powerful feature that can help you measure the success of your ads. You can track how many views your video ads receive, the number of engagements, and a lot more. Overall, advertising on YouTube is an excellent investment for SaaS companies because it is an extremely powerful strategy that can help you generate leads and boost your salesNew Call-to-action

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