Ready to make millions as a YouTuber? We’ve all heard the stories of YouTubers who’ve made a fortune making videos. And yes – there are many success stories! There’s potential out there. But the stories of the millionaires are the exception, not the rule. So how do people make money off of YouTube?
This article will mainly focus on how the system works and where the money comes from. We’re not going to consider here how to be successful with your videos. We’re also not going to look at streamers, like those who show live videos playing Fortnite. There are additional channels for earning there.
Income for YouTubers comes from advertising. And the main source of advertising income is from the ads that Google places in the video. These can be video ads before or during the video. They can also be popup ads that show at the base of the video.
Earning By YouTube Ads
Advertisers pay YouTube to run those ads, of course. And YouTube shares that revenue with you if you’ve signed up to allow ads on your channel.
You don’t get paid based on your channel subscribers. And really, you don’t get paid only based on how often your video is viewed. It’s a bit more complex than that.
You get paid based on the number of times an ad is seen during your video. We’ll try to be careful here to distinguish between ad views and video views. “Ad views” refers to how often an ad is seen. “Video views” refers to your video.
What you get varies from about $0.01 and $0.03 per ad view. The average is about 1.8 cents.
That means that for every 1000 ad views, you’ll likely make around $18. However, that’s not as easy to figure out as it seems.
Just because an ad starts, it doesn’t mean you’ll get paid for it. A video ad on YouTube counts as “viewed” if one of three things happen:
- the user watches at least 30 seconds of the ad
- the user watches the full ad (if the ad is less than 30 seconds long)
- The user clicks on the ad’s “Call to Action”
So if someone leaves the ad immediately, you don’t get anything out of it.
It does vary a little based on several factors. The number of ad views is just one. The click-through rate (CTR) on the ads is another factor.
Of course, the quality of your video helps attract more viewers. And that leads to more advertising, too.
Video length also comes into play – the longer your video, the more ads that can be crammed in. However, remember that you get paid when an ad is viewed and that a lot of people aren’t going to watch to the end of a long video.
Roughly, 16% to 28% of viewers will watch an ad. That leaves you with between $3 and $5 per thousand video views.
So to make $100 on your video, you need between 20,000 and 33,500 viewers. That’s a lot of people watching your video!
It can be a nice sideline, but you have a long way to go before you can support yourself with a YouTube channel. To make even $20,000 a year, you’ll need at least 4 million views!
Sponsorships
Using Google Ads is one way to earn, but there are others, as well. If you gain a large and loyal audience, you might be able to contract with sponsors.
Google and the government both have rules about sponsored content. For instance, you have to say up front that you’re being paid to promote a company, product, or service.
Of course, no one is going to want to pay you until you’re already well-established. And the sponsorship has to “fit” – your audience has to be the audience for the product, too.
Sponsorships can be a great source of income, but they don’t come quickly. They also take a lot of negotiation.
Merchandise
Some YouTubers grow enough that they’re able to offer branded merchandise, too. T-shirts with their face, mugs with their catchphrase, and similar branded products can sell well.
Again, this will only work if you already have an audience. Unless you design a great t-shirt that stands on its own, you’ll need to have quite a name established before your merchandise catches on.
Conclusion
Yes, there are professional YouTubers who make their living making videos. But it requires creating a lot of quality videos that appeal to a huge audience.