How Effective Are YouTube Marketing Conversions?

Adam Torkildson
Adam Torkildson  |  October 11, 2019

People increasingly view YouTube on mobile devices rather than desktops, and Google has noticed. 

The tech giant is developing more efficient advertising venues, helping marketers reach customers across a wide spectrum of devices through YouTube Ads. Google now allows marketers to utilize search data from its YouTube-targeting algorithms—and is currently developing better algorithms to make its Smart Bidding more CRO-focused in YouTube advertising campaigns. 

In 2014, YouTube advertising was driving consumer conversions at a mere 14% rate. In 2016, about 71% of YouTube users who viewed explainer videos in order to research a service or product purchased it within a matter of weeks. 

Any marketer worth their salt knows a conversion rate that high can more or less guarantee success any type of marketing campaign. No wonder marketers are getting excited about YouTube advertising!

How do YouTube conversions work?

The conversion rates are there, yet some marketers are still struggling to maximize their advertising reach with types of advertising on other social media marketing venues with lesser impact. YouTube has an inexhaustible stable of videos.

With new content created constantly, and the subsequential exponential growth of viewership, it doesn’t take a genius to spot the advertising possibilities within. Experts now predict video traffic will make up for more than 80% of all consumer internet traffic by 2021. 

TIP: Want to create attention-grabbing YouTube Ads? You'll need the right video editing software to do so. 

View the Highest-Rated Video Editing Software →

YouTube vs. PPC

Average pay-per-click (PPC) search marketing platforms are not the same as YouTube’s marketing platform. They are top-heavy with statistics, numbers, graphs, and charts, that detail the exact value a client is getting by showing them how their dollars correlate to engagement. These elements make PPC appealing to advertisers because they can always refer to a spreadsheet for results. 

YouTube marketing, however, is more like traditional broadcast and print advertising. While it’s possible to tie an increase in viewership and sales to a specific YouTube advertising campaign, the numbers are not statistically hard and fast.

But that’s never been a problem for advertisers who use broadcast and print advertising, so why should it be a problem for advertisers who use YouTube the same way? The results won’t be neatly wrapped up in a bundle of spreadsheets, but does it matter as long as the ROI is good

What is AdWords?

YouTube offers marketing tools like AdWords for tracking metrics like views and view rates. It can also tabulate cost per view and click-through rate. The advanced version of AdWords also provides measured metrics for channel engagement, (e.g. tracking how long viewers stay on a brand’s channel and whether they viewed a second video after their first).

These second views are called earned views—an important element for marketers interested in keeping down bounce rates. It’s also crucial to keep track of earned subscribers—those who watch an initial video on a brand’s particular channel, then become subscribers within a week. 

AdWords can track keyword searches to clue marketers into specific demographics so they can modify keywords to reflect the ever-changing trends of consumer demand and interest. Adwords is also compatible with Google Analytics, which can measure such things as pages-per-visit, bounce rates, and new visitors. Google’s Multi-Channel Funnels (MCF) also give insight into viewer conversion paths from initial viewing to conversion to subscriber to purchase.

YouTube appeals to a unique set of viewers who may engage as much (or at all) with other platforms. This behavior makes in-stream advertising particularly effective—brands interact directly with viewers who are there to look at the screen and not do anything else.

YouTube conversion example

Take, for instance, someone searching with Google for a pair of Adidas shoes. They eventually wind up watching a YouTube video, taking a break from their search. They are fully engaged with that content—volume cranked to the max. Here’s where Google’s algorithm comes in. Using data from the viewer’s Google search history, marketers can now zero in on this very attentive and exclusive audience.

On YouTube, the viewer is presented with an instream advertisement for Adidas shoes before the video begins. That viewer is inclined to consider the content and view the ad to its end because, in effect, they’ve conditioned themselves already by looking online for the Adidas brand. The marketer did nothing to persuade them to accept the YouTube ad, so the prospective customer is never suspicious or hesitant about what they are viewing. It’s what they want to see—a win-win for the marketer and the viewer.

YouTube’s cost-per-view (CPV) payment structure indicates that it has applications other advertising platforms cannot begin to offer such as a captive audience for every video ad. Viewers rarely leave just because they don’t want to watch five seconds of a commercial, making CPV a good use of your marketing budget—the money is only being spent on consumers who will view at least part of an ad. Clever marketers make sure their video content is compelling from the get-go to ensure the maximum number of viewers watch the full 30-second ad. 

YouTube videos vs. YouTube search

At the start of any YouTube ad campaign, the first decision is whether to go with YouTube search or YouTube videos, or to use some of both. Both placements can work to a brand’s advantage, plus there is also the option of partnering with other streaming options like Display Network

Here’s how these different options can work for a marketing campaign:

  • YouTube search lets marketers target search result pages. This limits viewer coverage but allows for better niche market targeting.
  • Regular YouTube video ads show up on YouTube homepages, channel pages, and watch pages. All TrueView ad forms can be used.
  • Display Network Video Partners can only be included if already marketing on regular YouTube videos—they show up as bumper images at the bottom of videos.

What’s next for marketers on Youtube?

Premier lead generation is YouTube’s next big goal. The platform hopes to have a new set of algorithms by the end of 2020 to better capture more specific demographic information, giving marketers yet more transparent pointers on how to capture specific audiences through video ads. 

YouTube viewership isn’t going down for the foreseeable future, so smart marketers are taking a close look at partnering with YouTube for years to come. Major advertising agencies preview their TV-bound ads on YouTube, just to test the water—an indication that YouTube is good for any and all advertising campaigns. 

If you're already using YouTube for your marketing strategy, make sure to leave a review of the platform to help other people interested in doing the same make the right marketing decision for their company, only on G2. 

Do you use YouTube for your job? Write a Review →

Adam Torkildson
Author

Adam Torkildson

Adam Torkildson is the founder and owner of digital publishing company Tork Media. With over 50 online magazines and social media accounts, Tork Media generates millions of impressions across its portfolio of sites and has worked with some of the world's leading brands to deliver content marketing at scale.