How Do YouTubers Make Money?

If you’ve ever dreamt of becoming a YouTube influencer or just enjoy watching your favourite content creators regularly, you might have wondered how YouTubers make money from their videos. It is a common question, especially for those considering starting their own channel. Fortunately, there are numerous ways YouTubers can earn a living, and we’ll explore the most popular ones in this article.

Advertising Revenue

YouTube is effectively a video-based search engine, and the platform generates revenue by selling advertising, which displays alongside videos on its site. This advertising money is divided between YouTube and the video’s uploader, providing content creators with an opportunity to earn money through the Google AdSense program. Video creators are paid based on the number of views on their videos and the associated ads. This monetization model is termed pre-roll advertising because the ads appear before their videos.

The types of ads that appear on YouTube videos can include display ads, skippable and unskippable video ads, bumper ads, and overlay ads. Creators can earn money through each ad type with the amount varying depending on factors such as ad length and type of advertisement. The more popular a video is, the better it performs in the YouTube algorithm, which can lead to a higher ad rate.

Some examples of YouTubers who have made decent earnings through advertising revenue include PewDiePie, who was estimated to have earned $15.5 million through Adsense alone in 2018. Interestingly, many YouTubers have turned off the monetization option on their videos or the whole channel to avoid showing ads, instead choosing to monetize their content in other ways we’ll explore later.

Brand Sponsorships

Brand sponsorship, also known as influencer marketing, is a popular component of modern-day online advertising that allows marketers to connect with audiences through trusted online voices. The process involves brand owners or marketers hiring social media influencers or creators to promote their products to their followers. YouTube influencers with huge followings have been able to make millions of dollars through sponsored content deals.

Brand sponsorships can take the form of product reviews, sponsored shoutouts, brand testimonials, sponsored vlogs, and more. The contracts for these partnerships usually incorporate various expectations and metrics, such as view count, engagement rates, click-through rates, and more. For successful YouTubers with large followings in specific niches, securing brand deals can be incredibly lucrative with sponsored content deals reaching six figures per post for top influencers.

Examples of successful YouTubers who have partnered with brands for sponsored content include Casey Neistat, who partnered with Samsung for a project on the launch of the Galaxy S8, and Shane Dawson, who worked with Apple on a project promoting their iPad Pro.

Merchandise Sales

Merchandise sales constitute another avenue through which YouTubers monetize their channels. Fan merchandise can include clothing, books, stationary, streetwear, accessories, and other related goods. These items provide fans with an opportunity to support their favourite creators while also generating income for the content creators.

Many YouTubers use their videos to promote their items and often contain links to their online stores. They may also feature their merchandise in their videos or on their advertising partners’ social media accounts. Some popular YouTubers that rely mainly on merch sales for monetization include David Dobrik and Emma Chamberlain.

Affiliate Marketing

Affiliate marketing is a revenue-sharing model in which an influencer receives a commission for promoting someone else’s products or services. As affiliate marketing is performance-based, the more content creators promote products by driving traffic towards the products, the more their chances increase of generating higher income.

Affiliate marketing can take various forms, including pre-roll ads and clickable links, and creators can earn high commissions with successful promotions. Creators might use their video to promote a product or include a link in the video description. One significant example of successful affiliate marketing on YouTube is Pat Flynn’s “Smart Passive Income,” through which he has reasonably earned thousands of dollars in affiliate sales alone.

It is worth noting that affiliate marketing is not without disadvantages. Misleading promotions that fail to notify viewers that the influencer stands potentially by the product promoted have resulted in backlash and loss of trust among followers in the past.

Crowdfunding

Crowdfunding is the act of soliciting funds from followers and fans to finance the production of content or new projects. Content creators use sites like Patreon or Kickstarter to garner support for their projects, allowing fans to contribute in exchange for rewards such as sneak peeks or access to exclusive content.

Patreon is one of the most popular platforms used by YouTubers and other creators to monetize their channels. The platform allows creators to offer subscribers different payment tiers and access to varied content, such as behind-the-scenes videos OR Q&As. Critical examples of successful YouTubers who use Patreon include the animation artist Jaiden Animations and the content creator Philip DeFranco.

Product Endorsements

Product endorsements typically involve YouTubers promoting various products and services through their content and social media platforms, thus providing an avenue for brand owners and marketers to reach audiences through trusted voices. Here, influencers work independently, making their decisions about what products to endorse and promote.

Endorsements can take various forms, including informative videos about a product, unboxing content or product reviews, and live video streams. Creators might directly use their channels to promote products or social media handles, offering promo codes for discounts or direct purchase links. For instance, in 2015, Samsung launched a campaign with Casey Neistat, asking his crew to document their 44-day bike journey from New York to New Orleans while reviewing their products. Samsung paid over $25,00 to Casey and his team in this campaign.

Content Creation for Other Platforms

Content creators can also generate revenue through content creation on other platforms such as Instagram, TikTok, and Twitter. Additionally, they can use these platforms to promote their YouTube content, thus garnering more supporters for their channels.

For successful YouTubers, participation on other platforms is an excellent way to supplement their income and expand their reach, allowing them to build collaborations, partnerships, and promotional opportunities outside of YouTube. For example, Lilly Singh, well-known YouTuber, used Tiktok to promote her new late-night show, “A Little Late With Lilly Singh,” noting that the app provided excellent exposure and publicity for the show.

Conclusion

As we have seen, content creators on YouTube have various ways to generate revenue, which ranges from monetizing their videos with ads, sponsorships, merchandise sales, affiliate marketing, crowdfunding, product endorsements, and content creation on other platforms. So, if you’re thinking of starting your YouTube channel or looking to monetize your existing one, there are countless ways to do so. We hope this article has provided valuable insights into how YouTubers make money and equipped you with tips on how to get started.

So, if you’re an aspiring content creator looking to monetize your following, we recommend you implement a multi-faceted approach with revenue streams from multiple sources.