How I completely failed with YouTube Advertising

My Failed YouTube Advertising Experiment

One thing that’s really interesting about internet marketing is that you always find things that theoretically sound perfect, but the results are a complete letdown.  This is something that I recently experienced as noted in my September income report when I mentioned my expense of $50.68 on Google Adwords.

To be completely honest, when I thought of this idea I thought it would be an absolute home run and it turned out to be nothing more than a waste of money. Although I still have faith in this tactic, let’s take some time today to discuss what happened.

In this blog post we will cover:

  • My original theory on why YouTube video advertising would be great
  • How I created YouTube video advertisements
  • The results of the advertisement campaign (which was a big fat FAIL)

Why YouTube video advertising would be great

My motivation for wanting to do YouTube advertising is pretty simple.

First off, my affiliate Hostgator is willing to give me a $100 commission every time that I refer a paying customer to their hosting service.  I have absolutely no problem recommending this company because this website and all of the other websites that I have use Hostgator for their hosting and I know it’s a quality company.

Knowing that I could get that type of commission for every referral, YouTube advertising was a no-brainer. From my previous experience, I was aware that the cost of getting a person to watch a YouTube video is extremely low.   In this particular experiment it ended up costing me $0.12 every time that someone clicked to watch my video. Let’s do some quick math to show you why this excited me so much.

First, I assumed that the average cost per view would be $0.10 per view. This was a mistake, but I was close.

Using that benchmark, I hypothesized that I had a pretty good shot of making my money back because with $100 in advertising spend I would be able to get 1,000 views at $0.10 per view. If that is a little hard to follow, here is the equation below:

$100/$0.10 = 1000 Views of my video

I then thought (incorrectly) that 50% of the people who watched the video would click through to my website. Which leaves me with 500 website visitors.

50% of 1,000 views of my video was supposed to be 500 clicks to my website.

Of those who visited the website, I assumed 1% of the visitors would purchase the hosting because I have a special offer which puts the cost at a measly $15 (as noted in the Quicktip video) . In other words…

1% of 500 clicks to my website is 5 converting visitors.

5 converting visitors would equate to total revenue of $500.

The net income on that figure would be $500-$100 for advertising = $400 in profit

Now do you see why I was excited?

The video quicktip that I advertised was about how to build a blog or website in under 5 minutes. It’s a step-by-step screen recording of me walking through the process of purchasing a domain and hosting, then installing WordPress on to a website. You can find it here. Although it got quite a few likes, it didn’t actually result in any affiliate commissions.

Even though I didn’t figure out a way to make money on this video quicktip campaign, I still have faith in this model. If a blog owner is able to find a particular product with a high enough commission and figures out how to make a great video that entices viewers to click through to view the product or walk-through a process that results in an affiliate commission, then this should work. It didn’t work this time, but I feel like some tweaks may fix that.

How I created YouTube video advertisements

One of the things that surprises me about YouTube video ads is that they aren’t expensive at all. As mentioned above, I ended up spending only $.12 per view and all of the people who saw the video were searching YouTube for search queries related to creating a blog or website. Unfortunately, I’m not sure why these viewers didn’t follow my directions on the video and purchase the web hosting, but I guess that’s part of being an internet marketer.

In order to create YouTube video advertisements, you need to have a Google Adwords account to create the campaign. If you’ve never been exposed to Google Adwords, it’s the software that Google has that generates over 90% of their revenue. If you want to know more about it, I suggest you watch my Video Quicktip that explains how pay per click advertising works.

Here are a few screenshots of exactly what I did to Advertise on YouTube. If I get enough interest in this blog post in the comments section below about seeing a video quicktip for this, I’ll create a video explaining exactly what I did and a walk-through.

Step 1: Figuring out how to get to the YouTube advertising dashboard

As ridiculous as this sounds, finding the YouTube advertising dashboard in Google Adwords isn’t an easy task. It’s often overlooked and unless someone types “YouTube advertising” into Google, they may never see it. When logged into your Google Adwords account, there is a button all the way on the bottom left which is the “All video campaigns” button. Click on that button to get to the YouTube advertising interface.

All Videos Campaign Button - YouTube

Step 2: Create a Campaign

If you’ve never created a Google Adwords campaign before, this entire process is probably a little confusing. That’s okay though, starting with one campaign and testing it is a great way to learn. The first thing you want to do is create a campaign that covers the general topic that the video or videos will cover. Below is a screenshot of some of the campaigns that I’ve created in the past.

Campaign Screenshot - YouTube

The first campaign labeled “BestTranscriptionSoftware.com” is focused on advertising a video about software that I love called Dragon Naturally Speaking, which is an affiliate of mine. I’m actually using this software right now and it allows you to speak into a microphone and have the computer type for you. It’s probably one of my favorite pieces of software because it saves me a obscene amount of time because I don’t have to type. I’ll admit that it’s a little unnatural at first, but check it out for yourself and let me know what you think.

The second and third campaigns focused on keywords and an audience interested in “Create a blog” and “Create a website in 5 min”. I separated them into different campaigns because one was focused on creating a blog while the other was focused on creating a website. Although they may sound similar, and some people do use them interchangeably, technically a blog is different from a website and I wanted the campaigns to be structured to reflect that.

The fourth campaign “Social networking videos” was used a long time ago and was something I wanted to try just to see how YouTube advertising works. In that particular campaign you can find videos such as “What is Linkedin?” Truth be told, these are probably some of the worst videos that I’ve ever made but there’s no reason to delete them at this point.

Step 3: Set the campaign up

For the sake of this post, we will just concentrate on the third campaign which is the “create a website in 5 min” campaign. On a general level, there are four particular tabs one needs to pay attention to when creating a campaign in YouTube advertisements. Those are all listed below in the screenshot.

YouTube Tabs

Ads tab: The ads tab is all about creating the ad text that you’d like to have shown with your video to entice users to click-through and watch it. I’m not going to disclose exactly what was said on my ad because I feel like that could be giving away a little too much, but what you want to do with this text is give people who are searching a reason to click on your video.

Videos tab: This tab allows you to choose the videos that you’d like to run with the ad that I mentioned above. You do this by indicating the YouTube URL that the video is at and Google Adwords will pull it in as necessary.

Targets Tab: The focus of this tab is to allow you to set a maximum cost per view, along with choosing the audience that you’d like to target. Again, I’m not going to say exactly who I targeted unless I get a lot of comments on this post saying that people have an interest in learning it, but this is a huge part of the campaign because if you are advertising to the wrong target, you’re wasting your money.

Settings: The final tab focuses on letting you set up what geographic locations you’d like to target, what time of the day you’d like your ad to show, and what devices you’d like the ad to show on.

The results of the advertisement campaign

As much as I would love to say that this particular advertising campaign was an incredible success, that couldn’t be further from the truth.

Video Metric Results

As you can see from the numbers above, I was able to get a total of 567 views with an average cost per view of $0.12. The total cost of the campaign was $67.11 and never yielded any commissions. One thing to note is the “Video played to” section along the right side of the screenshot. This is very important because it lets you know of the retention of your video and lets you see how engaging it is for users. I’m not sure exactly what a great retention rate is for YouTube videos at this point, but I’m guessing that 13% watching the entire video is a pretty low number.

Although I didn’t get a commission from the affiliate with this video, there were some positives.

YouTube has an algorithm that focuses on video views, audience retention, video likes, and channel subscriptions. Of course, they also focus on the title and description of the video, but they realize that these can be easily manipulated and instead look towards user behavior to understand what the quality videos actually are.

Subscriptions: Because of this video, I was able to get five new subscribers to my channel. Although this may not seem like much, five new subscribers is definitely something that I appreciate considering the fact that I wasn’t able to make any money. These subscribers will now be notified every time that I post a new video and will hopefully watch them.

Affiliate link clicks: Sadly, this video only generated 27 affiliate link clicks. Writing this post has made me think about my strategy a little more and inspired me to run this ad one more time with a few tweaks to get more clicks to my website/affiliate link. Who knows, maybe someone will actually create a hosting account on Hostgator and I can get a commission.

Video views: The video views are an important part of the YouTube algorithm and by running this ad right after the video launched I was able to get a total of 651 views. Even though this didn’t result in a commission, getting 651 views is a positive because it gets more people exposed to my brand and shows YouTube that people are willing to watch what I have to say.

Video likes: The last thing that I gained from this advertising was five likes on the video itself. This definitely isn’t a crazy amount of likes, and didn’t boost me to the number one spot on YouTube search, but things like this help the ranking of the video.

So, there you have it. One of the experiments that I did was a complete and utter failure, but I’m totally okay with it. In the end I spent the $67.11 (If you’re wondering why this spend isn’t what I listed on my last income report it’s because all of the spend didn’t occur in September) on the YouTube advertisement and learned some valuable lessons.

I had a hypothesis that I thought may work, and unfortunately that wasn’t the case. But this isn’t the end of this advertising method for me, as mentioned above, while writing this blog post I started to realize the error of my ways and think that I may have figured out what went wrong with this experiment.

I’m going to try this one more time with a few slight changes and will be updating all of you once it has completed. Hopefully, I’ll have some great news about how this video generated affiliate income and I can just pour obscene amounts of money into this video and website. If not, I guess I’ll just get a few more views, likes, and subscribes to my channel.

In this blog post we talked about my theory around YouTube video advertising, how I created the advertisements myself, and the results of the advertisement campaign. Hopefully this post will give you a few ideas of some ads that you can try to run to make some money and you learned from my mistakes.

By the way, if you are in a good mood and want to help me out, watch the how to make a blog video and give it a thumbs up on YouTube. I have no shame asking people to do this because I really want to continue to grow this blog and an extra $100 per month in advertising will go a very long way.

Have you ever tried YouTube advertising? Was it successful? What do you think is my flaw with this campaign? Tell me and others in the comments below!

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