When creating a digital marketing strategy there are innumerable options to promote your brand. One of the biggest and most effective ways to disseminate your message is YouTube ads.
There are over 2 billion YouTube monthly logged-in users1, so capturing the attention of those viewers can be incredibly beneficial to businesses. With that in mind, there are two options when structuring YouTube ads:
- Maximizing Conversions,
- Targeting CPM (cost per thousand impressions)
A conversion occurs when a visitor to your website completes a desired goal, such as filling out a form or making a purchase. (CPM) represents how much money advertisers are spending to show ads on YouTube. A lower number means you are reaching the masses at a relatively low price point. In this case study, we will attempt to show which option is best for a given customer.
Based on extensive research done on DEKSIA’s biggest clients we compared these two campaign types based on how they performed in key metrics. The metrics we used were
- View Rate: the number of people who view an ad after seeing it on YouTube.
- Impressions: whenever a viewer comes across a thumbnail or video for your business.
- Click-through rate: (CTR) the number of viewers that clicked on the video after seeing a preview of it.
- Conversions: when a visitor completes a desired goal.
Here are the averages for the two campaign types using data from real DEKSIA clients:
First, we can see that the view rate and CTR for max conversions are much higher than that of CPM. While view rate is rather self-explanatory, click-through-rate (CTR) is a key metric that may need some detailing. (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. What can this data tell us about CPM vs Max Conversion tactics?
Max conversions excel in boosting view rates and CTR because they are often more direct and target particular customers. For instance, max conversion tactics would preview an ad for 50% off seeds to a viewer the algorithm knows is in the market for garden supplies. This targeted ad would be much more likely to get clicks and views because it is pertinent to the needs of that particular viewer.
We see these types of ads excelling in conversion metrics because they are highly specific and appeal to viewers who are in the market.
Looking at the data for CPM we can see that it has its own particular strengths as well. CPM campaigns crush Max Conversion tactic when it comes to the number of sheer impressions. Impressions are invaluable to marketers because they:
- Enable easy tracking of revenue based off the reach of campaigns
- Help marketers see if they are targeting the right websites
- Allow us to see if a value-proposition or offer is enticing
CPM offers this valuable data at low cost and is great for brands that are just entering a market and want to see how they can be effective with their marketing. When we say low cost we mean that for DEKSIA clients, we have found that the average cost of CPM campaigns is less than half that of Max conversions. ($0.03.75 vs 0.08.25) If a brand wants to cheaply reach thousands of people with a message or value proposition CPM is the way to go.
Reasons brands choose one campaign type over another
Based on data from DEKSIA clients we can make some observations at what campaign types will accomplish certain goals.
For brands that are interesting in lead generations or getting distributors to buy products, Max conversions seems to be the best way to help them achieve this goal. Often when a brand wants to increase website traffic or build brand authority they will use CPM campaigns.
YouTube Ads are an Asset Regardless of the campaign type you choose
When deciding to advertise for a business, the question is not if you should use YouTube but rather what campaign type you will choose. Maximizing Conversions will yield results while targeting small segments of the market that are interested in your product. CPM will spread your company name and image all over the web and saturate the platform to keep your brand at the forefront of recall. Here at DEKSIA, we encourage our clients to use either and have seen phenomenal results both ways.
For more information, you can check out DEKSIA’s Beginners Guide to Social Media Advertising