The way people engage with media has shifted over the past few decades as the digital age ushered in a new era of content. At the forefront of media consumption stands YouTube—a video-sharing platform that has undoubtedly become integral to daily life.
Today, YouTube has gone beyond videos, becoming a distinct social media site. Many users even use it as a search engine in and of itself, so it’s no surprise that businesses now see it as a marketing goldmine. As more brands recognize the value of running YouTube ads in the Philippines, it’s become increasingly necessary to utilize the platform’s advertising capabilities to reach your target audience and stay competitive.
However, a common concern is YouTube ads’ cost in the Philippines. How much would it be to run an ad campaign on YouTube—and is it worth it? So, let’s delve into YouTube ad rates in the Philippines to help you take advantage of this platform’s full potential without breaking the bank.
What Is a YouTube Ad?
A YouTube ad is a short promotional video, primarily appearing within content videos, search results, and the homepage, that lets you improve visibility among your target viewership and drive leads from the platform by targeting users based on their demographics and interests. In effect, you ensure that your ads reach the right people every time.
Creating effective YouTube ad campaigns is relatively simple. You must first choose an advertising format, and then determine your budget and bidding strategy to manage costs. Once you’ve set an advertising schedule, your ad can begin appearing on viewers’ screens.
Types of YouTube Ads
It’s essential to understand the different types of advertising formats available on YouTube if you want to navigate it effectively. These ad types vary depending on how much visibility they offer, so consider your goals, budget, and strategy to pick the option that best suits your needs.
These ads appear in YouTube search results, Watch Next suggestions, and the app’s Home Feed, offering seamless advertising integration within the platform.
Skippable ads play before, during, or after YouTube videos, allowing viewers to skip it after five seconds to ensure engagement, even for a short while.
Like skippable ads, this format also plays within videos. The difference is viewers can’t skip them, offering you a way to deliver concise messages of up to 15 seconds.
4. Bumper ads
Bumper ads are non-skippable six-second videos that play before a video. These allow you to deliver impactful, memorable ads without disrupting people’s viewing experience.
5. Masthead ad
Masthead ads let you showcase your brand or product through a video that appears in YouTube’s Home feed to drive brand awareness significantly.
If you have an existing Google Display campaign, you could also make your display ads visible on YouTube. However, note that YouTube and Google ads differ because the latter doesn’t use YouTube-hosted video content for promotions.
How Does YouTube Charge for Ads?
YouTube charges based on your ad’s performance and engagement, which means a well-performing campaign will cost more. Let’s elaborate on this by discussing the following metrics for skippable, non-skippable, and bumper ads.
● Cost-per-mille (CPM)
CPM refers to your ad’s cost per 1,000 impressions, representing how much you spend to display YouTube ads. An impression counts each time a user views your ad, whether they click on it or not. Here’s the formula for CPM:
CPM = (Ad cost / Total impressions) x 1,000
Let’s say you’re paying ₱500 for an ad, and users have seen it 10,000 times. Divide 500 by 10,000 to get 0.5, then multiply it by 1,000. Your CPM is ₱50.
● Cost-per-view (CPV)
With CPV bidding, you’ll pay for each view and interaction with your ad. A view counts when someone watches your ad for 30 seconds (or the entire duration if it’s shorter) or interacts with it, whichever occurs first. Here’s the formula for CPV:
CPV = Ad cost / Total views
Using the previous example, let’s assume that your ad costs ₱500 and 10,000 people have viewed it. Divide 500 by 10,000 to get your CPV, which is ₱0.05.
Cost of YouTube Ads in the Philippines
On average, running YouTube ads in the Philippines costs ₱110.32 per 1,000 impressions. There aren’t any exact data for the country’s average CPV, but Graphy reports that the general ad cost-per-view on YouTube is roughly ₱1.06.
Unsurprisingly, Western nations generally incur higher CPMs. YouTube ads in the US have an average CPM of ₱1,789.13, while the UK runs campaigns at ₱1,198.41.
Factors Affecting YouTube Ad Costs
The figures above aren’t set in stone. The following factors influence how much your campaign costs throughout its run period, so consider them while strategizing.
1. Ad bid
How much are you willing to pay for an impression or view? Higher bids can lead to better placements and visibility, but they’re pricier than lower ones. For example, if you set a CPV of ₱1, you’ll have to compete with other advertisers gunning for a similar audience. Bidding for a higher price makes you more competitive, but the greater volume of views and impressions will make the campaign costly.
2. Bidding strategy
How you bid based on your goals will significantly affect your ad’s price. Let’s say you’re looking to maximize conversions. In this case, integrating a competitive bidding strategy means your target audience is more likely to convert, but it’ll also be more expensive.
3. Targeting options
Targeting specific audiences may be costlier than otherwise. You’ll have a higher chance of engagement if you’re aiming for particular demographics, interests, and keywords. However, you’d also have to deal with increased competition for that audience, making running your ads difficult and, by extension, expensive.
4. Ad type
Your chosen ad format plays a crucial role in determining campaign expenses. For instance, non-skippable in-stream ads generally have higher engagement rates because they’re more prominent and unskippable. However, this feature increases costs since viewers are more likely to engage with your ad.
Is it Worth Doing YouTube Ads in the Philippines?
The Philippines has 57.7 million YouTube users, making the video-sharing platform a goldmine for marketers looking to target Filipinos. Let’s examine Orocan’s Ms. Hurt campaign, which won the Best Collaboration YouTube Works Award in 2022, to exemplify YouTube ads’ effectiveness in the country.
Orocan leveraged YouTube’s in-stream ads to increase brand visibility among their supporters and those of their collaborators, Heart Evangelista and Paolo Ballesteros. The campaign exceeded its target views by over 245%, with a click-through rate (CTR) of 15.9%. Most importantly, Orocan achieved its sales target of 25% versus the previous year.
These results show that leveraging YouTube ads in the country can build any business looking to improve its visibility and maintain top-of-mind awareness, as long as it’s willing to strategize comprehensively.
If you’re ready to achieve incredible ad campaign results, partner with Spiralytics, a trusted advertising agency in the Philippines. We can help you leverage PPC advertising to increase your sales, leads, and brand awareness worldwide.
Contact us to learn more!