Whether organic or paid, YouTube remains one of the most underrated platforms on the internet. And when one of the smartest paid search experts around calls it “the most mispriced ad inventory on the internet,” you ignore it at your own risk.
What I really love about YouTube is how it gives you the ability to consume media in whatever way is most comfortable for you in a given moment.
- Shorts are for someone swiping vertical video at 11 p.m. with the sound on, half engaged, looking for entertainment. Interesting content captures the mind and helps them discover new creators, so ads have about two seconds to earn the next two.
- In-stream YouTube is a totally different planet. The viewer chose to watch a 15-minute video about an obscure, niche topic that they love or are just getting into. They’re settled in, with intent and attention that’s not present with Shorts. Your ad needs to carry the same gravitas as the content it interrupts.
But most YouTube ads advice is written universally and for brands spending over seven figures a month on ads. This article carries more nuance and is for the more realistic advertiser with a smaller budget.
The Biggest YouTube Setup Mistake … And How To Do It Right
Most brands don’t understand the differences between YouTube formats. They create a Demand Gen campaign, upload one video, throw on a $100/day budget, and let Google control their fate. That, of course, means that Google is going to default toward whatever placement is easiest for it to deliver, not what converts for you.
What we do for our Shopify clients:
- Separate Demand Gen campaigns by placement type: one for Shorts, one for in-stream, one for image surfaces if it makes sense.
- Match creative format to placement. Shorts gets vertical video, hook in the first second, captions baked in. In-stream gets the longer, story-driven cut.
- Don’t judge performance on last-click ROAS alone. Watch for branded search lift and direct traffic volume. YouTube plants seeds that Search harvests weeks later.
- Keep CPMs honest. We’ve seen $5 CPMs on Demand Gen vs. $25 on Meta, but the math only checks out if the placement is right.
Why YouTube Via Demand Gen Offers The Most Control
Demand Gen gives you the ability to target exact audiences. This is different from Performance Max, where you can add any audiences you like, but they’re treated as a signal to guide the system.
Here’s how it works at the most basic level across bid strategies:
- No targeting settings = 100% algorithmic targeting.
- Target ROAS or CPA only = it tries to meet your target.
- Adding audiences = limited campaign exposure.
Adding audiences may have the effect of driving up costs, so you have to be sure that everything aligns with what you’re trying to do on the business end.
An option in Demand Gen that’s very cool and not available on paid social channels like Facebook or Instagram is building a list of people who searched for certain terms.
So if I were running a smaller campaign on a more modest budget but only wanted to show up when somebody searched for [kitchen cabinets], I can go as granular as I like. That level of control is a welcome feature.
A good place to start is your top-performing search terms from Shopping, Performance Max, and other campaigns. Create an “intent audience” with those – especially good for B2B.
I can also build on my customer list: email subscribers, website visitors, lapsed purchasers who bought from you six months ago but not in the last couple of weeks. You can select any criteria you have data for.
Then, like Facebook and Instagram, you can use that to build lookalike audiences to target people who are most similar to your existing customers. Three is just Google’s list of affinity, and, in market segments, they’ve got a ton of stuff in here.
Don’t forget: If you want to run a retargeting campaign, shut off Optimized Targeting so that it doesn’t go beyond your audience by default. With any audience you create, if you leave it on, you can see around 20% more conversions at the same cost. If you’re not trying to run retargeting, I’d typically keep it enabled.
A Note For Smaller Budgets: What High-Spending Accounts Can Afford To Do But You Can’t
When running smaller or B2B-focused campaigns, it’s very important to give YouTube strong audience signals so it knows who to go after, because it doesn’t have as much of a signal from conversion actions.
Larger campaigns and older/bigger accounts with tons of conversion data can go broader with targeting and let the bid strategy figure it out. This is what we default to unless we see something operationally that indicates otherwise.
It’s also important to regularly run through placements and ensure that you’re excluding things that aren’t converting or driving junk leads. For bigger budgets, this is hygiene. For you, it’s do or die.
There’s Every Reason To Stay Bullish About YouTube
YouTube’s diversity and its relative insulation from how much machine learning has taken over other types of advertising is a huge strength.
I can target people based on life events and things of that nature – these are very broad and don’t accurately reflect whether someone might want what I have, so I don’t love these options. I can target based on household income, parental status, and other such demographics. I can set exclusions to block people who bought from me recently.
But the common thread that’s important here is being able to choose when and where to show my ads. I might pick different audience segments for different pieces of the media mix. I might have different channels targeting different types of ads. If all my creative is horizontal, I probably only want to show up in-stream – vice versa for vertical video and Shorts.
But at the end of the day, the platform is still the platform. Your campaign setup is what actually decides who you show up in front of. Get that wrong, and you might as well give your budget away to charity where it can do more good.
Get it right, and YouTube becomes one of the most efficient acquisition channels in your media stack.
More Resources:
Featured Image: Roman Samborskyi/Shutterstock
