Social media websites have become lucrative sources of revenue for millions of people across the globe. Some earn their money via TikTok; others do it on Instagram. But by far, the most common method of earning money via social media still involves making and maintaining a successful YouTube channel.
From music videos to nursery rhymes, some of the best-performing videos on the platform rake in millions of views and just as many dollars. And even if you look at the mid-tier creators on YouTube, the ones who don’t have over a million subscribers, you’ll see that they’re doing fairly well. Not only can they make a decent living making video content, but they also have some room for luxury. No matter how you slice it, a career on YouTube is a desirable option for many.
However, not all careers on the platform take off quickly. Even the top earners like Mr. Beast and Markiplier had to build their brands over the years. With that in mind, what does it take to earn money on YouTube? And how much does it actually pay when you take everything into consideration? Well, this article is here to answer those questions and more.
Ad Revenue Explained
The primary method of earning money on YouTube is through advertising. When you watch a video, you might see an ad pop up at the beginning or somewhere in the middle. It will either be a short video or a still image, and it can last anywhere between a few seconds and a solid minute, if not longer. Those ads are the basic money-making tool that any YouTuber can employ. In fact, the majority of successful YouTubers still rely on it, despite other, more lucrative methods being available (we will cover those methods near the end of the article).
So, how does ad revenue work, exactly? Well, that’s where we need to focus on two terms in particular: RPM and CPM.
RPM stands for Revenue Per Mile. This metric represents how much a YouTuber has earned per 1,000 views on a single video. Of course, RPM is not just based solely on ads. It takes several other factors into account, which we will cover a little later in the article.
On the other end, you have CPM, or Cost Per 1,000 Impressions (the M in CPM stands for 1,000; in Latin, the number is represented by the letter M). This particular metric shows how much advertisers spend to show ads on the platform. Here, we have to distinguish between regular and playback-based CPM. The regular one relates to the cost an advertiser pays per 1,000 ad impressions. To clarify, whenever someone views an ad, or it’s displayed in full, it counts as an ad impression. Playback-based CPM relates to the cost that the same advertiser pays per 1,000 video playbacks rather than ad impressions.
What Can Affect Ad Revenue on YouTube?
Ideally, you should be able to run ads on any video without interruptions and earn a sum per each full view. However, that’s simply not true in practice. There are many different things that can directly affect ad revenue on YouTube, so let’s go over a few.
Ad Blocking Software
A huge chunk of YouTube viewers uses some sort of ad blocker to watch videos. While ads are important as a source of revenue, they tend to break up the flow of the content when you place them at certain intervals, and lots of viewers don’t like that. It’s in some ways similar to watching television vs. watching an on-demand service like Netflix. On-demand shows and movies run without interruptions. On the other hand, when a movie or a show is on TV, it’s interrupted by commercials. And more than a few people either mute them or switch channels until the show comes back on.
When someone uses an ad blocker, they completely skip playing the ad you’ve placed. With that in mind, you will get a view but no ad impressions and, therefore, no money earned per that one view.
Your Video Isn’t Advertiser-Friendly
In 2023, YouTubers who want to earn money on the platform have to tailor their content to suit the platform’s TOS, community guidelines, and other rules. Sadly, that means that certain types of content, as high-quality as they may be, simply will not earn money because advertisers will refuse to allow the creator to run ads on them. Those videos usually include suggestive or risky content, such as politics, religion, true crime, or controversial social issues.
Wrong Targeting Methods
Creators can target specific types of audiences with their videos, and the ads will often reflect that choice. The methods they use to find these audiences include broad demographics (age, gender, parental status, etc.), specific demographics (i.e., blue-collar workers, college students, people in retirement, etc.), individual interests, customer matches, and so on. If your video reaches the wrong kind of targeted viewer, the ads will not show. The same will happen if you use the wrong kind of content targeting methods (topics, keywords, placements, or even the type of device the viewer uses).
Other Reasons
Does your viewer have a paid YouTube membership? Do they live in a region that doesn’t allow certain ads or limits YouTube’s services altogether? Have they recently seen an ad on your videos? Did they watch at least 30 seconds of the ad, no matter how long it is? All of these reasons can contribute to you not getting revenue per video, despite running ads on it.
How Much Does a YouTube Video Earn Per View?
Broadly speaking, a contractor pays YouTube $0.18 per view. Through Google AdSense, a YouTuber gets 68% of that sum, i.e., $0.12 per view. That sounds like a small amount until you put that into perspective. In theory, you can earn $122 per 1,000 views on each video.
However, as we’ve stated earlier, lots of people use ad-blocking software, so the actual amount you can expect to earn per view is much smaller. A conservative estimate is anywhere between $3 and $5 per 1,000 views. For beginner YouTubers, that amount doesn’t sound too enticing, especially if they make videos that require hours of editing and research.
Popular YouTube Channels (and Niches)
While it takes some time to get off the ground, building a career on YouTube can be incredibly rewarding in the long run. The proof of that is in the sheer number of massive YouTubers who earn millions of dollars from their content. In 2022 alone, the top five YouTube earners — Mr. Beast, Jake Paul, Markiplier, Rhett & Link, and Unspeakable — earned a combined total of $195.5 million.
Of course, as we stated earlier, none of these careers happened overnight. For example, Mr. Beast has been active on the platform for more than ten years, starting off by uploading gaming content. Rhett & Link have been around for even longer than that. One of the main reasons behind their continued success is continuity and hard work. They’ve invested tens of thousands of hours into their content, branching out into other venues and collaborating with other video creators.
With popular creators, the fact that they chose particular niches also helped boost their success. Markiplier, for instance, is a prolific gamer, and gaming is one of the most popular hobbies on the planet, with a huge built-in audience. But it’s far from the only niche a YouTuber can focus on. Some of the other ones that garner large audiences include, but are not limited to:
- Music videos
- Comedy sketches and parody content
- Horror
- Cooking
- Arts and crafts
- Restoration and DIY handiwork
- Animation
- Tech, cars, and gadgets
- Appliance repair
- Fitness and bodybuilding
- Makeup tutorials
- Political and social commentary
- Life hacks
- Cryptocurrency news
- Educational content
- ASMR (Autonomous Sensory Meridian Response)
- Fashion
- Home improvement
- Documentaries
- Historical and/or geographical content.
Other Methods of Earning Money as a YouTuber
As stated, the most basic method of earning money on YouTube involves ads. But with ad blockers in place, that method will inevitably not be enough to earn a living. So, it’s no wonder that even the biggest YouTubers are looking for alternative methods of getting paid. Listed below are some of the most popular and effective ways of earning money on YouTube in addition to AdSense.
Memberships
As a brand-new YouTuber, you will have to rely on ad revenue at first, as well as work hard to build an audience. But once you’ve reached over 1,000 subscribers, you can start thinking about expanding. The next obvious step is YouTube paid channel memberships.
The best way of describing a channel membership is to compare YouTube to a fancy nightclub. Regular guests have access to the majority of what the club has to offer, including drinks, music, utilities, etc. However, each club has a VIP section for exclusive visitors who pay a certain amount. Within that VIP section, they get special perks, like pricey drinks, individualized services, and so on.
By offering memberships, you provide your paying viewers with exclusive content, which can include any number of things (shoutouts, specialized videos, early access to new content, etc.). Once you’ve established a system, your subscribers can click on the Join button (right next to the Subscribe button) and become a member for a set monthly fee. Of course, your membership perks and rewards have to comply with YouTube’s guidelines, so we recommend exploring those in detail before setting out to reward your loyal members.
The “Supers”
Another in-house method of earning revenue on YouTube involves user interaction. In general, it will involve three different features: super chats, super stickers, and super thanks.
The first of those options involves highlighted messages sent by the viewers. During a live stream, a subscriber can pay a certain amount of money to send a text response highlighted in one of many different colors. In return, the YouTuber will read the super chat out loud, comment on it, and shout out the person who sent it. The amount of money people can send via super chats can be as low as $1 and as high as $500 per day or $2,000 per week. If your stream is popular, or even if it’s trending on that particular day, you can make several thousand dollars from a single stream on super chats alone.
Next, there are the super stickers. Similarly to super chats, users can choose a fun little image or gif and send it to the YouTuber via chat.
Finally, there are the super thanks. Broadly speaking, super thanks are a combination of the previous two “supers” since they also involve an animation or a color-coded message. However, they often cost more than regular super chats or super stickers, plus they are tailor-made for the person who sent them.
It’s important to point out that you need to have these features turned on before you start streaming. In addition, they have to meet specific requirements. For instance, you will not be able to use super chats or super stickers on:
- Private (or recently privated) videos
- Unlisted videos
- Videos with an age restriction
- Made-for-kids content.
Paid Sponsorships
Now we’re getting into the outside source of income territory. If you’ve noticed, a lot of popular YouTubers tend to promote different products or services at some point in their videos. It can happen near the beginning, in the middle, or near the end of each video, but it’s there. The YouTuber pauses what they’re talking about, and, all of a sudden, they are heaping praise on a shampoo, a shaving kit, a streaming service, a food delivery app, or something similar.
This is called having a paid sponsorship, and it’s far from new. Nowadays, both established and emerging brands rely on so-called influencer marketing to have their products or services reach as many people as possible. Granted, you can’t really expect brand deals and sponsorships when you’re still a small channel, but the second you start growing, it’s time to look into it.
There are no strict rules to the amount you get. For instance, smaller channels with a steady following can earn anywhere between $10 and $50 per 1,000 views from a sponsor. If a video crosses the million view mark, the earnings can go as high as $50,000 per video.
Some brands pay the influencers in cash, while others offer their products or services as compensation. YouTube allows these deals without taking any cut from the arrangement. However, as a creator, you have to disclose that what you’re doing is sponsored content.
Merchandise
As you grow, you want to connect with your audience as much as possible, and merchandise is one of the best ways to do so. Fans like to own a piece of memorabilia that shows their support of a content creator. Once you reach a certain number of subscribers, you should offer some merch that reflects your channel, your brand, and yourself as a person.
More often than not, people opt for typical merchandising fares, such as cups, T-shirts, badges, pens, water bottles, hats, and posters. The reason behind such a decision is fairly simple; of all the merchandising options, the ones listed above are inexpensive, common, useful, and rarely fail to sell. But by no means should you limit yourself to these types of merch. Always try to expand and experiment. For example, some creators have their own lines of perfume or USB chargers, while others opt for shoes, sports equipment, and even small gadgets. Wealthier creators like PewDiePie even sell gaming chairs of high quality. It all depends on how much you can invest in merchandise and what returns you expect.
And speaking of returns, more often than not, YouTubers don’t disclose how much they earn from selling branded merch. Depending on your niche, you might earn anywhere between 10% and 40% on branded items alone. Your select niche also plays a role in this percentage. For instance, if you’re a channel that specializes in makeup, nail polish, or cleaning products, you can earn more from branded items than someone who simply streams games or hosts a podcast, mainly because you’re selling products specifically related to the topic of your YouTube videos.
Crowdfunding
The most popular method of supplanting your YouTube ad revenue today involves crowdfunding platforms. Loyal fans will always be willing to pay a certain amount of money per month to see you create content. And with platforms like Patreon, Kickstarter, SubscribeStar, Ko-Fi, Podia, Hypage, Gumroad, and others, you can accept direct donations from fans in exchange for content and exclusive perks.
The best feature of crowdfunding platforms is the fact that fans directly finance the creators, who, in return, provide them with individualized rewards. All you have to do is set up a system where fans can donate as much as they are capable of and have your rewards match the size of their donation. Using these platforms is the most effective once you have a fairly sizable following, i.e., well beyond 10,000 subscribers. On average, a Patreon subscriber will donate around $6 to their preferred content creator. Of all the revenue, the platform keeps a percentage that varies depending on your output and the number of people who donate, among other factors. If you’re aiming for a steady revenue stream, make sure to put videos out consistently, as that will incentivize the patrons to continue donating.
