From premium to programmatic: Has YouTube masthead’s value taken a hit amid cost surge?

YouTube has long ruled India’s digital advertising space, but its advertising model has drastically changed. Once seen as the go-to platform for impactful ads, YouTube now thrives on data-driven programmatic advertising, reshaping how brands target audiences and track ROI.

Ten years ago, YouTube masthead ads sold for Rs6-7 lakhs per day, but today, costs have increased several folds, touching nearly 10X that amount on top days as brands buy targeted ads by demographics and regions, capitalising on flexible, automated strategies. This shift offers new opportunities but also complicates ad pricing and effectiveness for marketers.

Historically, YouTube's masthead ad—positioned at the top of the YouTube homepage—was viewed as a ‘roadblock’ ad format that guaranteed extensive visibility.

From digital crown jewel to questionable ROI?

An anonymous ex-marketing head recalled how, during its prime, “YouTube used to be the epitome of impact buying on digital,” and the masthead was “the most premium priced property” in the digital space, often booked for an entire year due to its ability to deliver high daily impressions.

However, as digital marketing has matured, the perception of the masthead’s value has shifted. While it continues to offer broad visibility, advertisers are increasingly scrutinizing its cost-effectiveness.

“Advertisers began to realize that the ROI on masthead ads wasn't as high as once thought, though they still remain impactful,” the source added.

Still a direct deal, despite programmatic boom

What remains unchanged is that YouTube’s masthead ads are still sold via direct deals, not programmatically.

“If you want to buy a YouTube masthead, you have to deal with the YouTube team. You cannot buy it programmatically,” the source emphasized. Despite the programmatic revolution, major impact-driven ad formats, like the YouTube masthead and Connected TV home screen inventories, are rarely available through automated buying platforms. Approximately 90–95% of such ‘roadblock’ properties still require direct buys.

Still premium, but not exclusive

However, YouTube's pricing strategy has evolved as competition from newer digital advertising formats has grown.

"The premiumness of YouTube masthead has obviously declined because there are too many other properties within connected TV," the source added, pointing to alternatives like connected TV home screens, OTT (over-the-top) platforms, and even Google Play Store ads. While YouTube masthead ads remain premium offerings, their dominance has waned due to this proliferation of alternative ad spaces.

Programmatic advertising has revolutionized digital ad buying , bringing automation and data-driven strategies to the forefront. Vaibhav Kandpal, CEO & Founder of Lead Experts, notes that the shift from fixed daily rates to programmatic models on YouTube has significantly impacted ad costs and accessibility. "The traditional daily takeover model was expensive and lacked targeting capabilities, making it less accessible to many brands,” he explained. Now, YouTube offers cost-per-thousand-impression (CPM) and cost-per-hour options, allowing brands to fine-tune their campaigns and better target key moments, such as product launches or cultural events.

The benefits of programmatic advertising are clear. Advertisers can now focus on precision rather than blanket visibility, optimizing their budgets to reach specific audiences when it matters most. This flexibility has made YouTube advertising more attractive to a broader range of brands, particularly smaller companies that previously found the masthead’s premium pricing prohibitive.

Broader market trends

Amidst the growing role of programmatic ads, broader market trends are also shaping the pricing landscape. According to Sajal Gupta of Kiaos Marketing, ad rate inflation has been relatively modest across most digital formats, with some exceptions. Online video —driven largely by platforms like YouTube and connected TV—has seen inflation rates of 7–8% in India. In contrast, retail media and search advertising have experienced inflation rates of 5–6%. This indicates that while programmatic advertising has made ad buying more efficient, rising demand for high-quality video content continues to push prices upward.

Shradha Agarwal, Co-founder and Global CEO of Grapes Worldwide, expands on how programmatic advertising has transformed YouTube's masthead format. The once fixed-price model has shifted toward dynamic pricing, driven by real-time bidding. "This has resulted in dynamic pricing, varying at different hours of the day depending on various factors," Agarwal explained. The rise of programmatic bidding has enhanced YouTube’s targeting capabilities, allowing brands to tailor their campaigns based on demographics, behaviour, and contextual relevance.

Gopa Menon, Chief Growth Officer - APAC at Successive Digital, provides additional insights into this evolution. "Over the past few years, YouTube masthead ad rates, particularly in India, have experienced significant shifts, largely due to the transition from daily flat rates to programmatic bidding systems," Menon explains. He notes that historically, YouTube's masthead ads were sold on a daily flat rate basis, with advertisers paying a set fee for 24-hour homepage visibility.

YouTube masthead ads could still range between ?50 lakh to ?1 crore, depending on demand and the time of year (e.g., during major events like the IPL or Diwali)." However, the shift to programmatic buying has introduced more variability in pricing. "Programmatic rates can fluctuate based on factors such as target audience, time of day, and competition in real-time auctions.

This shift has generally reduced the barrier to entry for smaller advertisers, but it has also made cost prediction more challenging. YouTube masthead CPMs can range from ?300 to ?1,200 depending on the targeting and the competitive demand.

The rise of Connected TV (CTV) has further complicated the landscape. Menon notes, "In India, brands are allocating 20-25% of their YouTube budgets specifically towards CTV, and the CPM for CTV ads can be 30-40% higher than traditional YouTube ads, owing to the premium nature of the audience."

As the digital advertising landscape continues to evolve, YouTube remains a key player, but its dominance is no longer absolute. Prabhvir Sahmey of Samsung Ads supports the move away from the masthead as a roadblock-only ad format, stating that it has made YouTube’s inventory more accessible and flexible for advertisers. “The more execution choices that are on offer, the more accessible the inventory becomes to many more advertisers,” Sahmey explained. By shifting to CPM-based buying, YouTube has enabled advertisers to have better control over their ad spends, making its ad offerings appealing to a broader spectrum of businesses.

The evolution of YouTube advertising in India has been driven by the rise of programmatic models, the diversification of digital ad formats, and changing perceptions of ROI. While the YouTube masthead continues to hold value, its dominance has diminished in an increasingly fragmented digital landscape. As programmatic advertising continues to mature, brands will need to adapt their strategies to remain competitive, taking advantage of the precision, flexibility, and scalability that automated ad buying offers.