Early tests of ads on YouTube Shorts have shown that they cost about 50% less than TikTok ads and generate longer views, according to a recent case study from video ad agency Precise.TV. The agency, which ran Shorts ads for sneaker maker Asics, Moose Toys and dozens of other clients, was participating in an exclusive experiment on YouTube. The Google platform allowed some brands to target video campaigns solely to Shorts, representing a new way of buying into that channel.

The Shorts-only ad campaigns allowed brands to see how the platform performed on its own, without mixing in results from campaigns on other parts of YouTube. The tests let advertisers compare YouTube Shorts ads—how much they cost and how many views they generate—to TikTok, advertisers told Ad Age.

“YouTube Shorts is kind of at a point where they’re about to turn on the advertiser tap,” said Denis Crushell, chief commercial officer Precise.TV. Until this test, brands were able to extend Google and YouTube video campaigns to also run as Shorts, but they could not target Shorts alone. Shorts features a different style of advertising than other parts of YouTube, where brands run ahead of longer-form videos as pre-roll commercials or as in-stream ads inside the videos.

“Shorts is very comparable to a platform like TikTok or Instagram Reels,” Crushell said. “You can like the ad, share it, or comment, which is different than in-stream and pre-roll on YouTube.”

The tests showed that YouTube Shorts ads cost 46% less than TikTok, according to Crushell. Advertisers have told Ad Age that TikTok ads cost $8 on average per thousand views, CPMs, while Shorts ads cost about $4 on average. (Of course, the prices are bound to change the more advertisers try Shorts, and as the platform develops.)

A TikTok spokesperson declined to comment on its pricing. 

Also read: What makes TikTok ads connect with consumers:

At the same time, YouTube allows advertisers to set campaigns to only count a view when a consumer watches for at least 10 seconds. On TikTok, advertisers can set goals where they pay once a view hits six seconds. The longer view length was a bonus, Crushell said.  

Through this program, Asics was “one of the first sporting goods retailers advertising on Shorts,” according to Victoria Botana, senior marketing associate at Asics Digital. “Paid social video content has historically been a top-performing advertising tactic for Asics. In our commitment to video-focused marketing, we looked to increase our investment in YouTube in 2023,” Botana said in an email to Ad Age.

The Shorts-only test was a way for advertisers to put the platform through its paces, and compare it to other social media rivals. More than that though, Google for the first time gave video ad buyers a way to single out Shorts, unbundling that inventory from larger buys across the platform. Google mostly advises agencies and brands to use automation, its advertising AI, to decide where to place ads, whether that’s before a long-form YouTube video, in Shorts, feeds and across its video partner network of third-party sites.

“YouTube is a dynamic platform, and we encourage advertisers to take advantage of our AI-powered video campaigns that allow them to achieve their goals fluidly across formats,” Nicky Rettke, VP of YouTube product management, said in an email to Ad Age. “Given the excitement around YouTube Shorts, we debuted new ways this year for advertisers to leverage the unique opportunities of short-form.” 

But there is a debate in the ad industry about how much control to relinquish to platforms, and agencies such as Precise.TV want to offer brands a way to direct their ad buys. “Automation is something that’s happening in the industry, and it’s all well and good to say, 'turn on all ad products,'” Crushell said, “but then it’s about what’s actually working and what’s not. It’s hard to know what’s working if they’re all bundled together.”

Giving advertisers the option to run separate Shorts campaigns, in a silo from other inventory, gives them more visibility into the platform, said Jon Morgenstern, executive VP and head of investment at VaynerMedia. “[YouTube Shorts] used to be very ‘black box,’” Morgenstern said. “But now there is reporting, insights and much more there.”

Shorts advertisers want to analyze the platform and compare how it fares next to TikTok and Instagram Reels, Morgenstern said.

“Pound for pound, evolution wise, TikTok is still farthest along,” Morgenstern said, and TikTok trained advertisers how to adapt to the vertical video, fast-scrolling style on the service. Now, with Shorts opening the floodgates, advertisers could see if the same creative built for TikTok performs on Shorts.

“Shorts has benefited from that TikTok-inspired advertiser,” Morgenstern said, adding, “That’s the whole premise of exclusively targeting Shorts-only ads, when an ad campaign is already rooted in short-form, vertical video, and you’re already running TikTok and Reels.”

Shorts is an important and unique ad canvas for YouTube, which has mostly pitched itself as an alternative to TV. With Shorts, though, YouTube is entering into social media-style advertising, which is unlike search ads or its other video offerings. YouTube launched Shorts in 2021 and it now boasts 70 billion views a day, according to Google’s October third-quarter earnings report.

Earlier this year, YouTube CEO Neal Mohan told Ad Age that Shorts ads were also coming to connected TV, another surface that is crucial to the video site’s success.

Shorts ads also overlap with Google’s search advertising proposition, according to Crushell. Asics, for instance, was able to target Shorts ads to audiences that had searched for keywords related to running shoes. “The power of search is helping with targeting on YouTube Shorts,” Crushell said. “That’s like a game-changer compared to TikTok advertising.”

TikTok is developing its search ad capabilities, too, as it tries to vie with Google and Amazon as the next-generation platform for where people discover new products and services. Gen Z has been turning to video as a form of searching the web for everything from recipes to fashion tips.

In advertising, Google has been evolving its ad platform so brands and ad agencies don’t necessarily control every aspect of a campaign, including placement. That’s one of the reasons advertisers said they were interested in just testing Shorts ads, to see what they could glean about the platform without mingling the performance metrics that come from other parts of Google’s ad ecosystem. Google, like Meta and others, has been using AI to manage the finer details of ad campaigns, allowing their algorithms to decide where the ads run based on a marketer’s goals. For instance, Google has an ad product called Performance Max, which decides what audience and ad form is most likely to succeed. That means the advertiser has less say in where the ads run.

Google also has “video action campaigns,” which are designed to hit a specific marketing goal such as sales and clicks on a website. The video campaigns run in-stream on YouTube videos, in Shorts and across Google video partner sites. In recent months, Google has received pushback from advertisers concerned about automated systems placing ads in a setting some brands might not find suitable.

For Shorts, brand suitability has been a concern, too. One of the roadblocks to wider Shorts adoption was the fact that brands did not have all the tools they needed to analyze what content surrounded their ads. That, too, was recently addressed, and last week DoubleVerify, a third-party measurement firm, announced it would be able to analyze Shorts ads for brand suitability. “Brands who run ads on Shorts will have third-party tools to measure and verify the quality of the videos their ads are running alongside,” DoubleVerify said.