Purpose: This study investigates two important research questions. First, does YouTube advertising create value for customers to activate their inspired-by state (motivation), or does customer engagement in advertised brands have a mediating role? Second, does the inspired-by state influence customers� inspired-to state (action) to purchase the advertised brand? Design/methodology/approach: This study employs Ducoffe�s advertising value model to investigate how customers� engagement mediates perceived advertising value and their inspired-by state. The authors split customer inspiration into two primary states: inspired-by (i.e. the early interest in taking action) and inspired-to (i.e. the intention to act), demonstrating that the latter is positively influenced by the former. The study employs SmartPLS V3.2.9 to analyze survey data from 360 respondents in Pakistan � an emerging market. Findings: This study found that informativeness, entertainment, creativity and incentives exerted a significant positive impact on perceived advertising value. The perceived advertising value of YouTube ads fails to influence customers� inspired-by state directly; however, customer engagement positively mediates the relationship between the perceived advertising value of YouTube and customers� inspired-by state. Finally, the customers� inspired-by state is successfully converted into an inspired-to state. Practical implications: This study has numerous practical implications for advertisers and marketers seeking to optimize social media advertising and marketing performance. Social implications: YouTube ads shape consumer behavior, empowering informed choices; authentic engagement transforms the advertising landscape. Originality/value: This study is the first to examine the perceived advertising value of YouTube ads for eliciting customers� inspired-by state, assessing the mediating role of customer engagement as a mechanism. Moreover, the authors examine the role of customers� inspired-by state as a predictor of the inspired-to state. © 2023, Emerald Publishing Limited.