Youtube advertising help

[garretts43]

I have to do a 3 page report on youtube advertising. I can find a lot of info on the internet, but I am confused on how the Advertisers measure the effectiveness of their ads. I know that the owner of the channel accepts the ads into their videos, the owner then uses Adsense to look up revenue reportings etc, and the owner gets a little cash from having the advertisers pay them.

But the questions is, as i stated above, how does the advertiser know how effective their ads are in the videos? how do they know that their ad is actually being seen? Do they use Adsense as well, or use another method to find out their ad reporting?

Also, the advantages are easy to point out, but i am struggling with the disadvantages for advertising on youtube. I dont know how youtube ad's can be a disadvantage, unless when a person skips the ad, right?

 

[Pinhedd]

I have to do a 3 page report on youtube advertising. I can find a lot of info on the internet, but I am confused on how the Advertisers measure the effectiveness of their ads. I know that the owner of the channel accepts the ads into their videos, the owner then uses Adsense to look up revenue reportings etc, and the owner gets a little cash from having the advertisers pay them.

But the questions is, as i stated above, how does the advertiser know how effective their ads are in the videos? how do they know that their ad is actually being seen? Do they use Adsense as well, or use another method to find out their ad reporting?

Also, the advantages are easy to point out, but i am struggling with the disadvantages for advertising on youtube. I dont know how youtube ad's can be a disadvantage, unless when a person skips the ad, right?

There are three key metrics to measuring advertisement effectiveness.

1. The first is the number of impressions. Each impression corresponds to an ad-view. Each time an ad is displayed to a non-robotic user an impression is counted for the advertisement.

2. The second is the number of click-throughs. Each click-through corresponds to the number of times that an advertisement is clicked, taking the viewer to another site.

The Click-Through-Rate, or CTR, is defined as (clicks/impressions) * 100

3. The third is the conversion rate. This measures the turnover of click-throughs or referrals to actual purchases. This is often measured indirectly.

The conversion-rate is defined as (conversions/clicks) * 100

Advertisers pay for advertisements in bulk, usually in several ways.

1. CPM (cost per mille, or cost per one thousand). The advertiser pays for an advertisement campaign in bulk by the number of impressions or clicks. The advertising network displays the ads to potential customers. Advertising networks that can offer increasingly targeted ads can charge more for those ads because the users are more likely to click-through. This is where Google makes most of their money. Rather than display the typical annoying banner ad to every vistor to a Google page, their advertisements are subtle and key-word matched to insight that they have gleaned from the user's browsing and viewing habits.

2. CPC (cost per conversion). The advertiser pays the advertising network a commission for each successful opt-in or sale. This is incredibly popular in "free" online games. The advertising network may or may not be given a CPM for non-conversion impressions and clicks.

Both impressions and click-throughs can be incredibly misleading. Neither of them create a causal link between the effectiveness of the advertisement campaign (of which CTR is a good indicator) and the success of the product that is being advertised. This is why the conversion rate is a much better metric where it is appropriate and easy to measure.

 

[wafflecakes]

I would like to point out that CPC is more commonly referred to as "Cost per Click", meaning you pay a certain amount every time someone clicks on your ad. This is likely the usage in YouTube ads.

 

[Pinhedd]

I would like to point out that CPC is more commonly referred to as "Cost per Click", meaning you pay a certain amount every time someone clicks on your ad. This is likely the usage in YouTube ads.

Yes I know that it's also used for that, but the traditional metric for that measurement is CPM. It's the same thing, one just happens to be part French.