How To Pick the Right YouTube Ad Campaign Type (3 Options, and Most Advertisers Choose Wrong)

Gustavo Grossi ·

TL;DR

There are 3 ways to run ads on YouTube: YouTube Promote, Video Campaigns, and Demand Gen Campaigns. Most advertisers jump straight to Demand Gen because they want conversions. That instinct backfires. Running video ads on a views or reach objective builds an audience ecosystem where your organic content does the converting for you. Understanding which campaign type to use (and when) is the difference between burning budget and building a compounding growth engine.

In This Post You’ll Learn

Why Most YouTube Advertisers Pick the Wrong Campaign Type

YouTube is the second-largest search engine on the planet. Over 2.7 billion monthly active users. Over 1 billion hours of video watched per day.

So when you decide to run ads on YouTube, the opportunity is massive.

The problem is the very first decision you make.

YouTube gives you 3 campaign options. Most advertisers pick the wrong one.

Here is how it usually goes. You open Google Ads, you see an option that says “Conversions,” and your brain says: “Of course I want conversions. Of course I want sales.”

You click Demand Gen. You set your budget. You launch.

Two weeks later, you have spent $1,500 and generated maybe 3 conversions at $500 each. Your cost per acquisition is absurd. You conclude that YouTube ads do not work.

But YouTube ads work GREAT. You just picked the wrong campaign type for your stage.

[SCREENSHOT 1: Google Ads campaign creation screen showing the three YouTube-related campaign options: YouTube Promote in YouTube Studio, Video Campaigns, and Demand Gen Campaigns]

Top YouTube advertising practitioners see this mistake constantly. The instinct to go straight to conversions feels logical. But it ignores how YouTube audiences actually behave. People on YouTube are watching, browsing, discovering. They are not in buy-now mode. Forcing a conversion objective on a cold YouTube audience is like proposing marriage on the first date.

The advertisers who win on YouTube understand that building an audience comes first. Sales follow.

The 3 YouTube Ad Campaign Types (And What Each One Actually Does)

Before you spend a dollar, you need to understand your three options. They are fundamentally different tools designed for different jobs.

Option 1 - YouTube Promote (The Boost Button)

This is the simplest way to run a YouTube ad.

You do it directly inside YouTube Studio. No Google Ads account required. You pick a video that is already performing well organically, hit “Promote,” choose your audience, set a budget, and let it run.

YouTube Promote is designed for one thing: getting more eyeballs on a video that is already working.

It is the Instagram “Boost” equivalent for YouTube. Simple. Fast. Limited in targeting options compared to a full Google Ads campaign.

[SCREENSHOT 2: YouTube Studio interface showing the “Promote” button on a video, with the promotion setup screen visible]

When to use YouTube Promote:

  • You have a video getting strong organic engagement and want to amplify it
  • You want to grow subscribers without touching Google Ads
  • Your budget is under $500/month and you want simplicity
  • You are testing whether paid YouTube distribution makes sense for your content

The takeaway: YouTube Promote is the entry-level option. Simple and fast, but limited targeting. Use it to amplify videos that are already performing well organically.

Option 2 - Video Campaigns (Views and Reach Objectives)

This is where things get strategic.

Video Campaigns live inside Google Ads. They give you two primary objectives:

Views objective. Google optimizes to get the most video views for your budget. Your ad shows to people likely to watch your video (not skip it in the first 5 seconds). You pay per view, typically between $0.01 and $0.05.

Reach objective. Google optimizes to show your ad to the maximum number of unique people within your target audience. You pay per thousand impressions (CPM), typically between $4 and $10 for in-stream placements.

According to Google’s documentation on video ad formats, Video Campaigns can run across in-stream (before, during, or after other videos), in-feed (YouTube search results and related videos), and YouTube Shorts placements.

[SCREENSHOT 3: Google Ads Video Campaign setup screen showing the “Views” and “Reach” objective options with their descriptions]

The magic of Video Campaigns is the audience-building effect. Every view is a potential subscriber. Every impression plants your brand in someone’s mind. And YouTube’s algorithm notices when paid traffic leads to engagement, which can boost your organic reach too.

The takeaway: Video Campaigns are the audience-building machine. Views and reach objectives grow your subscriber base, boost your organic algorithm signals, and fill the top of your funnel at a fraction of what conversion campaigns cost.

Option 3 - Demand Gen Campaigns (Clicks and Conversions)

Demand Gen is the direct-response option.

These campaigns, which replaced the former Video Action Campaigns in Google Ads, are built to drive specific actions: website clicks, lead form submissions, or purchases.

Clicks objective. Google optimizes to send the most traffic to your website or landing page from your video ads.

Conversions objective. Google optimizes to generate the most conversion actions (purchases, signups, form fills) from people who see your video ads.

Demand Gen Campaigns can run video, image, and carousel ads across YouTube (in-stream, in-feed, Shorts), Discover, and Gmail. They support lookalike audience segments, product feeds for e-commerce, and advanced bidding strategies like Target CPA and Target ROAS.

[SCREENSHOT 4: Google Ads Demand Gen Campaign setup screen showing the “Clicks” and “Conversions” objective options with placement previews across YouTube, Discover, and Gmail]

This sounds like the obvious choice. Every advertiser wants conversions.

But there is a catch. A big one.

Why Jumping Straight to Demand Gen Backfires

Here is the mistake top YouTube advertising practitioners see EVERY week.

A business launches its first YouTube ad campaign. They pick Demand Gen. They set the objective to Conversions. They target a cold audience of people who have never heard of their brand.

Then they wonder why their cost per conversion is $200+ and their ROAS is in the gutter.

The reason is simple. Demand Gen’s conversion objective needs data to work. Google’s algorithm optimizes toward people who are likely to convert. But if you have no conversion history on YouTube, no pixel data from video viewers, no warm audience to retarget, the algorithm is guessing.

And guessing with your budget is expensive.

According to Google’s own campaign objective best practices, conversion-focused campaigns perform best when the account has existing conversion data to train the algorithm. For new advertisers or new audiences, awareness and consideration objectives are recommended as a starting point.

[SCREENSHOT 5: Side-by-side comparison showing a Demand Gen campaign with cold audience (high CPA, low conversions) versus a Video Campaign building audience first (low CPV, growing subscriber count)]

A Demand Gen campaign aimed at cold audiences is like running a retargeting campaign with no one in the retargeting pool. The algorithm has nothing to optimize toward.

This is where most YouTube ad budgets go to die.

The fix is counterintuitive. Instead of starting with the campaign type that sounds like it will make you money, start with the campaign type that builds the audience your money depends on.

The Audience Ecosystem Strategy That Compounds Over Time

This is the insight that separates YouTube advertising beginners from practitioners who build real, compounding growth.

The best YouTube ad strategy is often not to optimize for sales at all. At least not at first.

Here is how the ecosystem works.

You run Video Campaigns with a views or reach objective. You target people who watch the kind of YouTube channels that suggest they are your ideal customer. You show them your best content.

What happens next:

  • People watch your video. Some subscribe to your channel.
  • Your subscriber count grows. Your view counts increase.
  • YouTube’s algorithm sees this engagement and starts recommending your organic videos to similar audiences.
  • More people discover your content organically. For free.
  • Your existing organic content (tutorials, reviews, case studies, behind-the-scenes) starts converting these warm viewers into customers.

You paid for the audience. Your organic content closed the sale.

This is the compounding flywheel. Paid reach feeds organic discovery. Organic discovery builds trust. Trust converts to revenue. And the organic engine keeps running after you stop paying for ads.

[SCREENSHOT 6: Diagram showing the YouTube Audience Ecosystem Flywheel: Paid Video Ads (Views/Reach) -> New Subscribers + Views -> Algorithm Boost -> Organic Discovery -> Warm Audience -> Organic Content Converts -> Revenue, with an arrow looping back to reinvest in Paid Video Ads]

Compare this to the Demand Gen approach. You pay for every single conversion. The moment you stop paying, the conversions stop. There is no compounding. No organic lift. No flywheel.

The takeaway: Video Campaigns with views or reach objectives build an audience ecosystem that compounds. Paid reach fuels organic discovery, organic content converts warm audiences, and the flywheel keeps spinning even when you stop the ads. Demand Gen is pay-to-play with no compound interest.

How to Pick the Right YouTube Campaign Type for Your Business

Knowing the 3 options is step one. Knowing WHICH one to use is where results happen.

Here is a clear decision framework.

[SCREENSHOT 7: Decision flowchart titled “Which YouTube Ad Campaign Type Should You Use?” with four decision paths based on business stage, audience warmth, budget, and objective]

Scenario 1: You are brand new to YouTube ads.

Start with YouTube Promote. Pick your best-performing organic video. Put $10 to $20/day behind it for 2 weeks. See if paid distribution generates subscribers and engagement. If it does, graduate to Video Campaigns inside Google Ads for better targeting.

Scenario 2: You want to grow your YouTube audience and brand awareness.

Run a Video Campaign with a reach objective. Target custom audiences based on the YouTube channels your ideal customers watch and the topics they search for. Set a budget of $20 to $50/day and run for 30 days minimum. Track subscriber growth, view counts, and organic traffic lift.

Scenario 3: You have an established YouTube audience (5,000+ subscribers) and want to drive website traffic.

Run a Demand Gen Campaign with a clicks objective. Target your video viewers and subscriber lookalikes. Send them to a landing page with a clear offer. You now have a warm audience that already knows your brand, which is EXACTLY what Demand Gen needs to perform.

Scenario 4: You have 10,000+ subscribers, proven organic content that converts, and conversion data in Google Ads.

NOW you can run Demand Gen on a conversions objective. You have the warm audience, the pixel data, and the conversion history that the algorithm needs. This is where Demand Gen becomes a powerhouse.

The pattern is clear. Start with audience-building (Promote or Video Campaigns). Graduate to traffic-driving (Demand Gen clicks). Then scale to conversion-optimizing (Demand Gen conversions) once you have the data.

Skipping to step 3 is where budgets get burned.

[SCREENSHOT 8: Table showing the 4 scenarios with columns for Campaign Type, Objective, Budget Range, Duration, and Key Metric to Track]

The 5-Step YouTube Ad Launch Plan

Here is the exact plan to start running YouTube ads the right way. Follow these steps in order.

Step 1: Audit your existing YouTube content. Look at your YouTube analytics. Find the video with the highest average view duration percentage. This is your best content, the one that holds attention. This becomes your first ad creative.

Step 2: Start with a Video Campaign on a views objective. Go to Google Ads. Create a new Video Campaign. Select “Product and brand consideration” as your goal and “Video views” as your campaign subtype. Set your daily budget to $15 to $30. Target custom audiences based on YouTube channels and search terms your ideal customer uses.

Step 3: Run the campaign for 30 days without touching it. Track subscriber growth weekly. Monitor cost per view (aim for $0.01 to $0.05). Watch for organic traffic lifts in YouTube Studio analytics. Do not change targeting or budget during this period.

Step 4: Build your retargeting pool. After 30 days, you will have a pool of video viewers, engagers, and new subscribers. Create audience segments in Google Ads: people who watched 50%+ of your video, people who visited your channel page, people who subscribed.

Step 5: Launch a Demand Gen Campaign targeting your warm audiences. Create a Demand Gen Campaign. Set the objective to clicks (not conversions, not yet). Target your video viewer and subscriber audiences from Step 4. Send them to your best landing page. Run for 2 to 4 weeks. Once you have 30+ conversions tracked, switch the objective to conversions and let the algorithm optimize.

[SCREENSHOT 9: Timeline infographic showing the 5 steps across a 90-day launch plan: Days 1-7 (Audit + Setup), Days 7-37 (Video Campaign Running), Days 37-45 (Build Retargeting Audiences), Days 45-75 (Demand Gen Clicks Campaign), Days 75-90 (Switch to Demand Gen Conversions)]

That is the full playbook.

The takeaway: The right sequence is audience first, traffic second, conversions third. Start with Video Campaigns to build your audience pool. Graduate to Demand Gen clicks once you have warm audiences. Scale to Demand Gen conversions once you have 30+ conversions as training data. This sequence gives Google’s algorithm what it needs at each stage, instead of asking it to find buyers in a sea of strangers.

Three Things to Remember

One. YouTube gives you 3 campaign types, not just one. YouTube Promote, Video Campaigns, and Demand Gen each serve a different stage of growth. Know all three.

Two. The instinct to go straight to conversions is the most expensive mistake in YouTube advertising. Cold audiences plus conversion objectives equals wasted budget. Build the audience first.

Three. Views and reach campaigns are not vanity metrics. They are the foundation of an audience ecosystem that compounds. Paid views fuel organic discovery. Organic content converts warm viewers. The flywheel runs long after the ads stop.

Start with what you have. Pick your best video. Put $15/day behind it on a views campaign. Build the audience your business deserves.

Then let your content do the closing.

Go run it.

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