How do YouTubers make their money?
YouTube is an ever-growing platform. For over 13 years it has been the heart of video creation, in formats such as gaming, vlogging, beauty and how-to.
Since the turn of the 2010s, YouTube has made it possible for its content creators to make money from videos, let's delve into how YouTubers make their money.
First of all, learn to come to terms with the word "Adsense", this is the main way of earning money through YouTube, at least directly from the platform itself. The way it works is that companies apply to have their ads shown on YouTube videos that are monetised (Set up to earn advertisement revenue) - From here, the YouTube channel that is posting videos will earn a cut from every monetised view.
Views that are from people who use ad blockers don't count, as the advertiser won't have their advertisement seen. YouTubers can also be paid based on the sales generated from having relevant ads in their videos. This is usually done by becoming an Amazon Affiliate, but we will leave that for a different post.
Now, YouTube pays based on CPM (Cost per thousand or cost per mille), this is essentially how much the YouTuber earns for every 1,000 impressions on an advertisement that has been placed into their YouTube video. As a general rule of thumb, the average CPM industry-wide averages out at roughly $2 per one thousand impressions.
A YouTuber won't take that amount home though, as YouTube will take 45% of the earnings - so let's say you get 1 million (monetised) views on a monetised video at a rate of $2 for your CPM, YouTube takes the 45% cut, so then you will be left with $1,100 take home pay. Obviously CPM rates vary by industry, and it is better to have ads targeted to your content, such as business courses if you're an entrepreneur, or gaming stores if you're a gamer on YouTube.
CPM rates can be as high as $30 and as low as a few cents, it really depends on the industry you opt into, and whether you're lucky enough to have targeted ads show up in your videos.
Nowadays, YouTubers use a variety of income streams to support their living. The best example is through sponsorships, affiliates and endorsements.
The YouTuber might be approached by a company looking to promote their new product, and will offer a free unit of that product to the YouTuber, as long as they promote it within their videos, this can boost sales for the right company, and it also helps the YouTuber as they may be given a unique discount code. A discount code given by the YouTuber will pay them commission every time a product is bought through their link by one of their followers.
Other ways YouTubers make money are through selling their own merchandise, TV/interview deals, as well as receiving fan donations - This is popular for YouTubers who utilise Twitch, as to subscribe to a Twitch channel it costs $5.
Pretty cool way to make money, right?!
Thank you for reading 'How do YouTubers make their money?' by IT Block. IT Block is an IT support services provider based in Singapore and we love sharing our IT expertise with the world.