How To Incorporate Into Your Strategy (2023)

YouTube can be a powerful tool for merchants. For audio brand LSTN Sound Co., it’s both the inspiration for the business and how it grows.

Touched by a YouTube video of a woman hearing her own voice for the first time, the founders created a company based in social entrepreneurship. Sales proceeds go toward helping people in need receive hearing aids.

Now LSTN uses YouTube video ads to reach new customers. Founder Bridget Hilton credits YouTube as the company’s most powerful marketing tool.

With the right strategy and creative materials, advertising on YouTube via in-feed discovery ads can become a major growth channel for your ecommerce store.

What are YouTube discovery ads?

YouTube discovery ads, previously called TrueView discovery ads and now known as in-feed video ads, are a video advertising format offered on YouTube. The ads appear pinned on the top of a relevant search results page, above other suggested videos on a watch page, or on the desktop or mobile YouTube homepage. Unlike in-stream YouTube ads that play before or during another video, in-feed video ads are placed in the YouTube feed.

A discovery ad appears at the top of YouTube search results for pots.

Discovery ads (or in-feed video ads) include a thumbnail, title, and description similar to other videos on the platform. These video ads look nearly identical to other user-generated YouTube videos, differentiated only by a small ad tag. They’re a type of native advertising, meaning the videos uploaded by your brand look similar to organic YouTube content. When users click on your in-feed video ads, they’re taken to that video’s watch page. In this way, they’re similar to an organic YouTube video.

YouTube matches your brand’s discovery ads to users based on audience targeting methods, such as demographics, user search history, and remarketing information from users who have engaged with your brand before.

How much do discovery ads cost?

The cost of discovery ads varies depending on your budget and bidding strategy. These variables impact the number of times your YouTube ad appears before users. As of December 2022, the average YouTube ad costs between 10¢ and 30¢ per view.

When setting up discovery campaigns, you have the option to set a specific budget for each day or for the entire campaign. Some of the most popular bidding strategies include target cost per action (CPA) and return on ad spend (ROAS).

Why should you use discovery ads?

With the right strategy, discovery ads can create more awareness and engagement for your brand with a scalable pricing model you control. Consider some of the benefits:

Pay only when viewers take action

In-feed video ads give you the option to target specific actions like users clicking on your ads. This means you can get free impressions from users who see your branded content on their homepages, search results pages, and suggested video feeds without clicking on it.

Capture attention without disrupting the user experience

If you create visually rich thumbnails for your brand’s in-feed video ads, you have the opportunity to catch the eye of potential customers browsing videos on YouTube. Unlike in-stream ads that interrupt someone’s video viewing, in-feed ads put your branded video content in front of users in a less intrusive way.

Attract mobile-first audiences

Discovery ads appear on the YouTube mobile app feed, making them a good option for ecommerce merchants whose sites prioritize mobile-first design.

Target specific audiences

Similar to in-stream ads, in-feed video ads give you the ability to target your videos to a specific audience based on factors like demographics and search history.

How to set up YouTube discovery ads

Create your video content
Set up your YouTube channel
Build your in-feed video campaign
Determine your budget and target audience
Launch your in-feed video ad campaign

Learn how to set up YouTube in-feed video ads to expand your brand reach and bring new customers to your ecommerce store with these steps:

1. Create your video content

Produce a YouTube video or an ad group of several related videos that build your brand and offer helpful information to potential customers.

Make sure your videos are in the correct file format. In-feed video ads require video files in a format of Quicktime, Windows Media, AVI, ASF, MP4, or MPEG, with a resolution of 480 by 360 pixels (4:3) or 640 by 360 pixels (16:9). The maximum file size is one gigabyte and a frame rate of 30 frames per second (FPS).

2. Set up your YouTube channel

Create a channel for your company and upload your advertisements to your channel page. Choose whether you want your video ads to be public to everyone or unlisted and only available to targeted customers.

Connect your channel to your Google Ads account:

1. In Google Ads, click the Tools button and select Linked Accounts under the Setup tab.

2. Go to the YouTube section and click Details and Add Channel.

3. Paste your channel URL into the text box and confirm the request to link your company’s YouTube channel and Google Ads account.

3. Build your in-feed video ad campaign

To set up an in-feed video ad campaign:

1. In your Google Ads account, go to the Campaigns tab and click on the blue plus button to start a new campaign.

2. Select your desired marketing objective. The most popular option is Product and Brand Consideration. Others include website traffic, sales, leads, product and brand consideration, brand awareness and reach, app promotion or no goal.

3. Choose video as the campaign type and select a campaign subtype like Influence Consideration or Custom Video Campaign, depending on your marketing objectives.

4. Name your campaign name so you remember what ad you’re running, when, and who you are targeting.

4. Determine your budget and target audience

Select a bidding strategy—target CPA and target ROAS are two common options. Input your desired average daily budget or a total budget for your ad campaign. Set the start date and end date for your campaign.

Choose location and language targeting based on where you sell products or services through your ecommerce store.

Target your audience segment based on their interests, habits, and how they interact with your business. Examples of information you use to hone your target audience in Google ads include:

Detailed demographics: Based on long-term user information, like age, gender, parental status and household income.

Life events: Based on current life milestones, like graduation or marriage.

Interest categories: Based on recent purchase intent from users like those who have interacted with your business or those who have searched for keywords related to your business.

Select Optimized Targeting to use Google’s machine learning technology to help identify new audiences that are aligned with your company’s goals, products, and services.

5. Launch and monitor your in-feed video ad campaign

Add your branded YouTube video URL and select In-feed Video Ad as the ad video format.

Select one of four auto-generated thumbnails. If you prefer to use a custom thumbnail, you can upload it to the video in the YouTube Studio. Write a headline of up to 25 characters and create up to two descriptions with up to 35 characters each.

You can see the campaign’s estimated performance on the right side of the page. If you are happy with the setup, click Create Campaign to launch it.

After launching your in-feed video ad campaign, keep an eye on the metrics, and adjust your audience targeting and campaign strategy accordingly. With some trial and error, you can watch as your video begins to accumulate views from potential customers.

Tips for creating effective discovery ads on YouTube

Clear analytics, adaptive strategies, and high-quality video content are all key elements of effective YouTube discovery ads. Here are some tips to keep in mind when launching your brand’s YouTube in-feed video ad campaign:

Set clear goals

Establishing goals upfront will give you a better understanding of how to set your discovery ad campaign up for success. Make sure you have a clear understanding of how you want your target audience to engage with your brand and how you want to achieve conversions.

Use conversion tracking

Conversion tracking is a Google Ads tool that provides information about user activity after interacting with your advertisement. Conversion tracking can let you know whether a user purchased your product or downloaded your app.

Experiment with different strategies

If an in-feed ad or ad group is underperforming, try a different thumbnail style or rethink your bidding strategy. Google offers a bidding tool powered by machine learning to help you maximize conversions.

Create useful video content

According to Think With Google, 86% of US viewers say they use YouTube to learn new things. Aim to create educational videos that offer your target audience new and useful information about a topic that relates to your brand.

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YouTube discovery ads FAQ

How much do YouTube discovery ads cost?

The cost of running YouTube discovery ads varies depending on your bidding strategy and budget. On average, YouTube discovery ads cost between 10¢ and 30¢ per view or action.

What is the difference between search ads and discovery ads?

Search ads are online advertisements that appear on the web pages of search engine queries, whereas discovery ads are video ads that appear on YouTube.

How do you measure the success of your discovery ads on YouTube?

The success of your discovery ads on YouTube is determined by metrics like video viewership, average cost per view (CPV), and click-through rates (CTR).