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YouTube commands a higher percentage of your ad spend

In the realm of digital advertising, Google's Search Engine Marketing (SEM) has long been the go-to platform for most advertisers, thanks to its powerful targeting capabilities, lower funnel indicators and extensive reach. But the landscape is evolving, and there's another platform that deserves a much bigger piece of the ad spend pie: YouTube, the second largest search engine in the world. Here's why:

YouTube's Massive Reach and Engagement

YouTube boasts an impressive 2 billion logged-in monthly users, making it a powerhouse in terms of reach. People are not just watching videos on YouTube; they're actively searching for information, entertainment, and solutions to problems. This active engagement presents a golden opportunity for advertisers to connect with their target audience in a meaningful way. Where do you go first to search? I'll bet 4 in 10 readers choose YouTube.

Video Content Dominance

Video content is increasingly becoming the preferred medium for consuming information online. YouTube being the king of video platforms, is the perfect place for advertisers to leverage the popularity of video content to engage with their audience. Video ads on YouTube are highly effective in capturing attention and conveying messages in a memorable way.

Targeting Capabilities

YouTube offers robust targeting options allowing advertisers to reach specific audiences based on their demographics, interests, and behavior. Adding a technology solution like video level contextual targeting from Precise TV ensures ads are safely shown to the right audience, in the right environment, maximizing impact and relevance.

Cost-Effectiveness

Despite its massive reach and engagement, advertising on YouTube is surprisingly cost-effective. Compared to traditional advertising channels like television that struggle for reach, YouTube offers much more affordable performance options (CPV) for reaching your audience. It's an attractive choice for advertisers looking to make the most of their ad budget.

Comparing Ad Spend: Google SEM vs. YouTube

While Google SEM has traditionally been a primary focus for advertisers, the shift towards video and the rise of YouTube as a search engine in its own right are changing the game. According to recent studies, the average advertiser spends around 40% of their digital advertising budget on SEM, while only allocating 10-15% to YouTube advertising.

This disparity in ad spend simply does not align with the changing digital landscape and the immense potential that YouTube offers. In order to stay ahead of the competition and realize the full funnel benefits of YouTube, advertisers must start reallocating larger portions of their ad spend to the platform. By doing so, they can tap into a vast audience of engaged users and leverage the power of video to achieve advertising goals. A 4:1 spend ratio (SEM to YouTube) made sense in 2015, for most brands it quite simply does not in 2024.

YouTube's status as the second largest search engine makes it a force to be reckoned with in the world of digital advertising. Its massive reach, engagement, targeting capabilities, and cost-effectiveness make it a compelling choice for advertisers looking to make a big impact and take advantage of the full funnel capabilities it offers. Increasing ad spend on YouTube drives CPAs down across all channels (most notably SEM) and delivers a higher net ROAS. It doesn't take a six figure MMM solution to start seeing the obvious performance lift. 

Topics: advertising, contextual targeting, gaming