More millennials are increasingly searching for ways to make money from home and get away from all the bureaucracy corporations are saddled with. According to statistics, people also spend about 10 hours per week in traffic. If you can create content and use your creativity in that time instead, most people would consider that a win. YouTube could be one of the ways you make money. So, how much do YouTubers make?
The best part about being on YouTube is that you can create passive income. Every video you create has the chance to become watched forever. A video you create today can generate income for years, or even decades to come. YouTube is one of those forms of making passive income online.
YouTube isn’t a get rich scheme, so you’re going to have to work at it. There’s a ton of ways to make money with YouTube, so read on!
- 1 Youtube Ad Revenue
- 2 Patreon
- 3 YouTube Sponsorships
- 4 YouTube Freelance
- 5 Youtube Affiliate Marketing
- 6 Writing A Book: Becoming An Author
- 7 Starting Your Own Makeup/Clothing/Product Line
- 8 Don’t Forget Taxes, Insurance, Equipment, And Other Expenses!
- 9 So, How Much Do YouTubers Make?
- 10 Should You Start Your Own YouTube Channel?
Youtube Ad Revenue
Ad revenue is commonly measured in terms of 1,000 ad impressions. YouTube’s ad revenue system runs through the Youtube Partner Program through Google Adsense.
Companies bid on advertising through an auction process per 1,000 ad impressions. There you can choose to show your ads to different genders, ages, nationalities, etc. Keep in mind that if you skip an ad, the YouTuber gets paid nothing.
YouTube pays you through PayPal when you have $100 in your account.
There are two different ways to make via ads, by impressions and clicks.
Most people want to estimate how much a YouTube channel makes by multiplying CPM * number of ads / 1000, but that’s an inaccurate way to measure revenue for a channel because there are other ways to make money as well.
How Ad Category And Country Affect Revenue
Different categories have different CPMs and depending on which country your viewer is from, you’ll get different CPMs there too.
For example, someone in the US watching a financial advertisement might get you $10-$20 in CPMs, while a cooking ad might get you $1-$2. These are for cost per impositions. Cost per clicks might pay you a dollar or more per click.
However, if your channel is mainly getting people from third world countries, your ad revenue is going to be significantly lower. Think of advertising as the expense it costs to get someone to buy something. Not everyone who is going to watch the ad will buy the product, and not even everyone clicking on an ad will buy a product.
That’s why products that have larger profit margins will be willing to spend more CPM. A mortgage company that will make thousands off of a new mortgage will pay a ton to get you as a customer. A company that makes snacks is not going to earn much profit when you buy a bag of chips.
Higher paying ad categories include financial, tech, etc.
Youtube Ad Monetization Requirements
After a swath of scandals in the past few years, YouTube raised its ad monetization requirements.
Now you need 4,000 hours of viewtime and 1,000 subscribers in order to start monetizing your channel.
Youtube and the Youtuber are called partners. YouTube gets 45 percent of ad revenue, while the YouTuber gets 55 percent. This might seem high, but unless you’re already a big time celebrity, it’s going to be hard to get someone to find your video content without finding it on YouTube.
How Much DoYouTubers Make?
A good way to see this is to go to Social Blade. They tell you how many views a YouTuber gets in a month, and all sorts of other cool analytics.
Social Blade sets CPM’s for all YouTube channels to .25 cents to $4, so you can get more accuracy into a channel’s earnings by figuring out what kind of content they usually put out. YouTube’s ads are very smart and show you ads you’re interested in. If you’re watching a channel with financial content, you can guess that the CPM’s would be higher and more tailored to financial ads.
If you’re watching a channel about baking, you can assume a lower CPM.
Once you get large enough, you can sell ads directly on your channel. This means you partner with a company and show only the ads you’ve agreed to show. This is useful for you because you don’t have to do a 45/55 percent split with YouTube. You get to keep all the ad revenue.
However, you’re going to have a sufficiently large channel in order to do this. Huge companies don’t want to deal with someone who only gets 10,000 views a month — it’s just not worth it for them. Unless your audience targets that specific niche and has a decent amount of eyeballs per month, you’re going to have to work for this.
Other Ad Factors
Some videos 10 minutes and longer have multiple ads inserted in the middle of the video. You want to make sure you can insert the maximum amount of ads without annoying your viewers. A good number is 1 per every 10 minutes, similar to how TV does it.
At the end of most YouTube videos, you hear things like, “Like this video! Subscribe for updates, and leave me a comment!”. This isn’t because they get paid for likes, subscribers, or comments. These 3 things signal to YouTube that people are engaged with the video, and this in turn pushes you up in the search rankings. However, if you have more subscribers, they’ll get a notification each time they post a new video.
You’ve heard of SEO (Search Engine Optimization) for Google and search engines, right? The same principle applies to YouTube. Rather than minutes spent on a blog post, YouTube optimizes for minutes spent watching a video. If people are staying through to the entire video, that shows YouTube they’re engaged with the content. This is why the most interesting information is usually at the end of the video — it’s because people know that if you stay until the end of the video, it will push them higher in the rankings.
Lastly, Ad Blocker is a huge issue for most YouTubers because the younger generations are using it more and more. If you have Ad Blocker on and you never see ads, you’re not supporting the YouTubers you love. If your audience is geared towards the younger age, you might earn less because they all have Ad Blocker on.
In 2017, the entire YouTube content creator community melted down over something called the Adpocalypse. People noticed random videos were getting demonetized and Ad CPMS fell way down. One thing most people don’t know is that not every video gets monetized and if you even hint at non-family friendly content, your video could be blacklisted from having ads on it.
It was a great time for the Patreon web site to rise to popularity. Patreon allows you to donate money to your favorite YouTuber, Blogger, or any other kind of content creator.
How much do YouTubers make with Patreon? You can donate $1 or any other amount. It depends on how many of your fans donate to your Patreon.
Usually, creators use Patreon and offer small incentives for every tier in order to entice you to donate to higher tiers. They also want to reward donators with extra goodies.
Just like in blogging, ad revenue is the lowest CPM you’ll get if you know how to do business.
Sponsorships are when companies partner with you to make videos specifically for them. It’s basically like creating a several-minute long ad. However, it takes a certain level of finesse to create an ad that people are not annoyed by and will continue to watch.
Advertisers know that people only sit through ads because they have to. Most people skip ads, or just mute them until the video comes on. So, advertisers are willing to spend more money to create ads that people are willing to sit through.
How much do YouTubers make with sponsorships? In general, sponsorships pay several times more than advertising revenue. If you already have a product you love, consider going straight to the company and show them past content you’ve created and how you can help that company. Also, be sure to showcase how much you love the company.
If you’ve shown how you can make viral or great content, you can work for other companies and freelance your content creation, video editing, and other skills. You might be able to monetize your skills by showing bigger companies how to make their YouTube channel more relevant, or even how to work with other YouTubers, or how to create an affiliate network.
Companies might also pay you to show up to certain events for marketing and publicity purposes.
Other YouTubers might also get paid for lectures or talks about how they monetized their accounts and how to create content.
Youtube Affiliate Marketing
Have you ever looked in the description box of a YouTuber’s video and seen so many links for various products?
The easiest way to start with this is with Amazon affiliate marketing. Most YouTubers put up links for products they use to make videos or products they use on a daily basis.
For example: A beauty channel might put up links to products on Amazon that she uses. Amazon gives affiliate commissions of up to 10 percent. So if you’re a beauty channel and linking to luxury beauty products that cost $50, that can add up pretty quickly!
A tech channel might link to hard drives or laptops after it reviews them. Earning a few percentage of the selling price is pretty lucrative when you think about it.
If you’re a fashion blogger, you can link to various retailers. A sweater at J.Crew, a scarf at Nordstrom and those earnings start to add up!
You can use affiliate marketing with basically any industry you can think of. Almost every major brand allows affiliate marketing.
How much do YouTubers make with affiliate marketing? In general, you can make from $5 to $100 depending on what product you’re selling. If you’re selling a course, your CPMs can be quite high.
In general, Click Through Rates (CTRs) of your affiliate links are between .5 to 3 percent, for people who ultimately end up buying or enrolling in the product.
Writing A Book: Becoming An Author
How much do YouTubers make writing a book? One of the ways to leverage your YouTube celebrity when you become more popular is to write a book. Most hardcovers earn about $3 per book sold. For every 1,000 books sold, that’s $3,000. Now, that’s passive income if your book keeps selling years after it’s been written.
If you’ve ever wanted to become an author, just know that it’s incredibly difficult to get an agent and publisher if you’re a nobody, even if your book is amazing.
JK Rowling was rejected dozens of times and later went on to become one of the world’s best-selling authors. The same situation occurred with Stephanie Meyer.
Publishing houses pay more attention to you when you already have a following.
Check out two books written by YouTubers:
Starting Your Own Makeup/Clothing/Product Line
A number of beauty bloggers have started their own makeup line. Usually, the biggest expense in beauty is the cost of advertising, The cost of producing the product is very low, sometimes 10 percent of the retail cost.
How much do YouTubers make when starting your own company? If you’re your own spokesperson, you can cut out all those advertising costs and make much more money with your product.
In some cases, YouTubers go the middle ground and instead choose to partner with a large corporation to make their own line. In makeup cases, it’s usually called “YouTuber For XCompany”. If it’s a clothing line, it’s usually called “YouTuber X Company”.
Don’t Forget Taxes, Insurance, Equipment, And Other Expenses!
How much do YouTubers make with extra expenses? Most blog articles and YouTube videos fail to take into account these expenses.
If you’re making videos on YouTube, remember that you’ll have to pay self-employment taxes. If you work for a company, you pay 7.65 percent in FICA tax up to $128,400 per year and then 1.45 percent onwards. Then your company pays the same amount for you. However, if you’re working for yourself as a YouTuber, you’ll have to pay both halves of the FICA tax. That’s 15.3 percent of your YouTube income already.
As an employee, your employer must provide health insurance if you work at least part-time, which is 30 hours per week. As a YouTuber, you’re going to have to cover your own health insurance. That’s a big price to pay!
Unfortunately, gone are the days where you can start a YouTube channel with your phone camera that looks like you’re filming through a potato. Nowadays, YouTubers who are even semi-popular use some pretty sophisticated filming equipment. Think about it, whose channel are you going to watch — a channel with great video HD quality or one with large pixelated video?
Other expenses include things like accounting expenses for doing your small business taxes, an extra room for your filming projects, cost of props, travel expenses for video or YouTube conferences to network with other content creators, etc.
All that money that you make isn’t what you get in the end! Remember that.
So, How Much Do YouTubers Make?
As you can see above, it really depends on what niche you’re in, and how many ways you monetize your channel.
If you pick something like politics or entertainment, you’re not going to make as high revenue from various income streams.
If you choose something else like tech or finance, you’ll make much more from your channel.
Rack up some sponsors, help sell a product, and you can make much more.
Should You Start Your Own YouTube Channel?
YouTube has a ton of content out there, but you’re not going to get a ton of subscribers and views right away. YouTube values consistent uploads, because that adds content to its library.
Most people don’t make a ton of money on YouTube in the first 6-12 months and then give up because they don’t see any traction. It’s incredibly difficult to learn new skills like editing videos, creating exciting content, and marketing, if you’ve never done any of that. You’re going to highly underestimate how long that takes you.
Plus, if you already have a full-time job, friends and family, you’re going to have to take time to learn all those things — a ton of you are going to get burnt out.
If you’re working full-time, make sure you don’t get burned out trying to make it on YouTube.
The best time to start your YouTube career would be in your teens or in college because you’re not financially responsible for anything yet. Paying for rent, food, etc, is stressful.
Every year, there comes a list of YouTubers who are making millions and raking it in. So what? That’s the norm in any industry. Take a look at the top 10 marketing executives, the top 10 toy makers, etc. One thing that can be said about YouTubers is that it doesn’t require a college degree, nor does it require being employed by anyone else.
If you think you can hack it, take a shot. But you’re not going to get famous over night, so let that sink in before you decide to do it.
Olivia worked in finance and wants you to learn the secrets of financial independence. She believes there are so many ways to monetize your life and make money doing the things you're already doing because so many companies offer free money.
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