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June 23, 2016

How to Increase ROI and Conversion from YouTube Ads

Most agencies just use pre-roll YouTube ads just for brand awareness. Here’s when, why, and how to use them for eCommerce conversions.

Most YouTube ads do not deliver a measurable ROI for advertisers. This is because most of the pre-roll ads (YouTube calls them “in-stream ads”) we see on YouTube are geared only towards raising brand awareness – they’re designed to get reach and attention, but not conversion. These ads seldom include a call to action, and only a very small percentage of people click on them.

Most of these videos are essentially made-for-TV commercials that have been uploaded to YouTube. For the most part they disregard the fact that TV and YouTube are very different platforms.

Awareness ads are fine on YouTube if, for instance, you’re an automaker and you’re just trying to get the word out about a new car model – consumers are probably not going to buy a high-ticket item after seeing just one YouTube ad. But what if your goal is to get people clicking from the ad to visit your eCommerce website? Well, you need a different approach – one based on conversion.

We spoke to three YouTube advertising experts to find out what they felt most agencies didn’t know about YouTube Ads for eCommerce. They each gave us one of the top tips from their playbooks:


According to Tom Breeze of ViewAbility in the UK, many brands and ad agencies mistakenly view YouTube as just another TV channel. They spend thousands of dollars crafting high production value brand awareness TV ads, and then upload them onto YouTube. They measure their success in the same way they do on television: By the number of impressions and frequency.

But that strategy “just annoys people,” Breeze says. “We get shown that ad all the time, and it gets really frustrating. And we have this negative experience for this brand.”

Breeze says that while impressions and frequency are great metrics for television, this approach doesn’t resonate on YouTube, and particularly not for eCommerce, where businesses are looking for direct sales resulting from the ads.

“I think the big problem that brands and eCommerce companies – the thing they forget – is that YouTube is more of a community, and people go there with specific intent. They’re looking for videos about certain topics that interest them, they’re looking for how-to videos, or they’re looking at review videos about what product to buy.”

Breeze recommends going further than just understanding intent. He says that advertisers need to master the moment, arriving at the right time for the right person.

“Be there when your customers are looking for you,” he says. “Nine times out of ten, brands aren’t appearing when they should be appearing. When their customers are there, the brands aren’t there. That’s a big missed opportunity.”

For instance, while it’s good to have an ad for a coffee maker show up when someone has done a search for “What’s the best coffee machine?,” it’s better if marketers can dive deeper into a predicted human experience.

Breeze gives a personal example of when his young son wakes him up in the early hours of the morning by bouncing on Breeze’s bed. To get his boy to settle down for a few minutes while Breeze gets up, he’ll do a quick search on his iPad for a children’s cartoon and pass the device to his son, which gives dad a few precious moments to get organized.

That, he says, would be a perfect moment in time for an ad about a coffee maker targeted to him as a parent, which would say something like, “Don’t you hate when you get woken up by your kids? Wouldn’t you just love for a coffee to be waiting for you? This is what our coffee machine does.”

Advertisers can build into their strategy predictions of specific types of moments in the human experience, then reverse-engineer the video content to apply to those moments. Furthermore, they can utilize YouTube’s extensive targeting options, such as a viewer’s age and gender, the day of the week, the time of day, and even whether they have young children or not.

It’s just a case of understanding moments your customers are going through, he says.

“Put yourself in the customer’s shoes for a second, and really understand what they’re going through in that moment in time. And give them an ad that fits the moment.”


“The problem I see with a lot of ad agencies is they just create one video (per campaign),” says Jake Larsen of Video Power Marketing. “Or, the opposite, they just create a lot of videos with no strategy.”

What’s missing for an eCommerce approach, he says, is an understanding of the specific relationship between the viewer and the business. He segments viewers into three types of relationships.

1) COLD TRAFFIC: People who have no idea who you are.

2) WARM TRAFFIC: People who know you, but have never taken action.

3) HOT VIEWS. People know you, have taken action and are engaged. They know, like, and trust you.

Larsen uses Google/YouTube remarketing to track website visitors and segment them into these user groups, serving up different pre-roll ads, depending on what level of engagement a user has had with the company’s website.

“What we’ve noticed is that when you combine in-stream ads with website remarketing, it’s like playing video games with cheat codes on,” he says. “It’s not even fair how easy it is to get leads, and also to get sales, directly from the in-stream ads.”

Larsen says that he won’t set up any campaign without remarketing, because without it, there won’t be any ROI.

“You’re not going to get any sales unless you’re remarketing,” he says. “It’s critical to the success of any ad campaign. Sometimes it takes seven or eight times that people see your video before they have the confidence and trust to actually buy something from a company. And that’s the power of remarketing.”

He says that with a proper remarketing layer combined with an email strategy, some eCommerce clients have returned 4x on their ad spend.

“Advertising is no longer an expense,” Larsen says. “It’s an investment – where you’re not losing money, you’re spending money to make more money.”


But how do you know if you’re getting the right mix of elements in your video? What should the messaging and call to action be? And how should you order them in the video, with what timing? Because on YouTube, you usually only have seconds to convert.

Well, you’ve got to test multiple variations of the video, says Matt Ballek of VidiSEO.

“In PPC campaigns, you generally test different ad copy or custom tailor it for specific ad groups and landing pages,” says Ballek. “The same should be true with YouTube ads if you’d like to get the best return on your investment.”

Sometimes the changes can be very simple, he says, with just slight variations. But these minor differences in the ad can yield useful data and help the advertiser determine which videos will have the highest conversion rates. Then you run several versions of the ad that have the highest return.

An added benefit, Ballek says, is that “viewers will appreciate not seeing the exact same pre-roll every time.”

Image Credit: mrmohock /

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