How much money do YouTubers really make?
It’s an important question, because according to a recent study,
becoming a YouTuber is now considered one of the most desirable jobs in the world. And yet,
some articles will tell you almost nobody is even making a living on YouTube.
But then, on the other side, some people talk about normal people becoming millionaires
from their videos. So, what is the truth - how rich can you get from youtube?
In this video we’re answering how youtube ad revenue works,
how much money you can make with youtube, and all the other ways some youtubers profit from their
channel, including some monetization tricks you may wanna use yourself.
For example, I’ll be explaining how a video with less than 1000 views
made me over $500, and yet a video with 10,000 views, made considerably less.
So, let’s delve into the truth about making money on youtube.
"Now in terms of how much ad revenue the main channel earned in 2020,
the main channel earned a whopping $2,082,858.68"
“I think I’m about $30,000 in credit card debt right now”
Both of these two great YouTubers have fairly similar audience sizes
with several million subscribers, so how can they be in such different financial positions?
One a multi-millionaire, one in credit card debt.
And of course it’s not just these two, there is a divide
all across YouTube - where some creators seem to have incredibly glamorous
luxurious lifestyles, whilst others talk about struggling to even pay their bills...
Now, their spending habits are obviously a factor in that too,
but the truth is that when it comes to making money from youtube ad revenue,
views are not paid equally. Some creators get paid far more for the exact same amount of views.
You see, YouTube don’t set a price for ads. They don’t say you’ll get $x for x views. Instead,
every time an ad is displayed on a video, advertisers bid
how much they’re willing to pay to be in front of that content.
Which means that for certain types of videos, advertisers will pay much much more.
Let’s go back to our example of Graham Stephan and Lahwf.
The reason Graham’s ad revenue is considerably higher is because he talks about finance and
investing. Topics which advertisers are willing to pay much more to be in front of.
That’s typically because if you’re selling something finance related
you often have higher profit margins, and you also know
that anyone watching a finance video is very likely to be interested in what you’re selling.
Whereas Lahwf’s channel was pranks and now vlogs. To advertisers, those aren’t the types of videos
that advertisers want to pay a lot to be in front of - they don’t fully know whose gonna be watching
those type of videos, and they don’t really relate very well to particular products or services.
So when it comes to YouTube ad revenue, the riches are in the niches. Certain
types of videos are simply much more valuable to advertisers, and so they will earn far more.
And if you have your own channel, when you go into creator studio, you’ll see which of your videos
advertisers are paying most for, by looking at the CPM - this metric tells
you how much advertisers pay for every 1,000 monetized views of that video.
So, hypothetically, a comedy sketch may have a $2 CPM.
A video about insurance could have a $40 CPM.
Which means that for every 1,000 views, the insurance video is getting 20 times more money.
After a million monetized views on both, one would have about $2,000, the other would have $40,000.
And whilst that may seem a little unfair, it does make sense. Because you can imagine an insurance
company would be willing to throw big money to be in front of a video that’s about insurance,
whereas not many companies are gonna throw big money to be in front of a comedy sketch.
However, if you are in a niche with a typically low CPM,
remember that every video is ranked individually. So if you were making a comedy sketch, if it was
a comedy sketch about making money, finance, investing, real estate, business, lawyers,
or anything that advertisers would likely pay more for - you can still get a high CPM. Because
YouTube is looking at things like the words you say within your video, and your title and tags.
For example, if we go back to Lahwf,
he’s said that one of his most profitable videos of all was when he interviewed a day trader.
Now, he has interviews with far more views, but because day trading and investing are keywords
with such high CPM’s, he made considerably more money with that video. So if you really wanted to,
you could deliberately make content around topics that are known to be more profitable.
This meme perhaps sums it up best:
But, that’s not the full picture.
Advertisers don’t just pay more for certain topics and keywords,
they also pay more depending on who the ad is being shown to.
For example, most advertisers will pay considerably more
for views from people in first world countries, especially America and the UK,
simply because they know people in these countries typically have a higher amount
of disposable income to spend on their products and services. After all, it’s a bit pointless
running an ad for a $500 product in countries where the average citizen can’t afford that.
In fact, because of the large amount of data Google has on most people,
advertisers can target their ads based on a huge amount of different factors,
even things like interests and estimated household income.
So, the amount a YouTuber earns is not just based on what their video is about,
but also who is watching it, and how much advertisers are willing to pay
to be in front of those type of people. Because, advertisers will bid more to be in front of
certain demographics and topics, which will drive the CPM up, so the creator earns much more money.
And so you can see why a site like Socialblade that tries to estimate youtuber earnings,
is never going to be accurate. You can see here they’re guessing the CPM is between 25 cents and
4 dollars. Which for many channels is incredibly low. And even if it is between that range,
there’s a big difference between 25 cents and 4 dollars,
so Socialblade can’t possibly give you a good estimate of ad revenue.
But hold up. Because this is just the tip of the monetization iceberg.
For the richest youtubers, ad revenue is NOT how they make most of their money...
If you want to make a full-time income from YouTube, ad revenue should never be your main
revenue stream. It’s too unpredictable, and quite frankly, there are better ways to make more money.
Here’s what you need to remember;
Attention = money.
If you have people’s attention, people who are watching your videos and liking your content,
then there are countless other ways you can monetize.
For example, did you know that one of the richest youtubers in the world, is 9 year old Ryan Kaji?
Some estimate his revenue to be around $30 million dollars a year.
But that’s not because of ads. It’s because he’s set-up other revenue streams through his channel.
The beauty is, anyone can do this even with a very small audience.
And let’s start with
1. Affiliate Marketing
Even if your channel has 0 subscribers, you can start monetizing right away with
affiliate marketing. This is where you partner with businesses who have products or services
your audience may like, and promote them within your video. You’ll get a unique affiliate link
which you can put in the description, and every time someone buys through your link,
you’ll get a commission from the sale.
You don’t have to deal with making the product,
shipping it, managing it, customer support - anything. Just make sure
it’s a great product you think your audience will genuinely like, and then you can promote
it and get commission on every future sale made through your link, even months or years later.
You can find products to promote through affiliate marketplaces like clickbank, but you
can also try reaching out to businesses directly if there’s something specific you want to promote.
How much YouTubers make with this can vary wildly. If they’re using something like the
Amazon affiliates programme, it won’t be a lot, possibly a few hundreds dollar at most,
as they get a very tiny percentage of the sale. But if they’re promoting something like
a digital course or software, it’s likely they may be getting 50% or even more of the sale,
because the business doesn’t have any costs to make more copies. And so there
are affiliate deals I’ve seen where youtubers are getting several hundred dollars per sale.
The second way YouTubers monetize their channel is:
sponsorships. Where, instead of getting a percentage
of the sale, you get a fixed amount upfront to advertise a product or service within your video.
Once again, don’t think sponsors are only for the big channels - this channel started getting
sponsorship requests not long after 1,000 subscribers, because it’s not just about the
number of subscribers, it’s about how well the sponsored product matches the audience.
Of course, there are some brands that seem to dominate sponsorships on
YouTube that you’ve no doubt heard many creators promoting, but again remember
you can reach out to any companies directly and try to make sponsorship deals.
However, I would recommend only promoting sponsors you actually think are good for your audience,
because otherwise it will dilute the value of your recommendations. Whereas if you only work
with sponsors you know will be worthwhile for your audience, it will mean it’s good for the audience,
better results for the sponsor, and therefore more money and credibility for you. Everyone wins.
In terms of money, someone like Mr. Beast will easily be able to negotiate six
figure sponsorship deals because every video gets so many millions of views.
But even at around 10,000 subscribers you can still be getting sponsors
around $1,000 if you have a highly engaged audience and a sponsor whose a great fit.
Don’t undersell yourself - always ask for more money upfront so you have room to negotiate.
3. Patreon & Fan Crowdfunding
When you’re got fans who like your channel, a lot of them will be willing to donate money to
help support you, in return for extra behind the scenes clips or earlier access to content.
YouTube itself does have a built in channel memberships programme,
along with paid super chats on live streams - but more creators seem to use Patreon instead.
But let’s do the maths here, if fans gave just $5 a month for access to some extra bonus content
- if 1,000 people join, that’s $5000 recurring every month. And so you can see how big channels
with a lot of fans can drastically increase their income by offering this kind of thing.
4. Sell a product
Now, when it comes to selling products through your YouTube channel,
most YouTubers go the route of selling merchandise. For huge channels like Pewdiepie
his can be very profitable, but when you have a small audience,
just throwing your brand name onto some random tshirt or mug probably isn’t going to make a
lot. I’ve seen some people have success by running limited edition merch campaigns, but
what if you thought about selling a product that was directly useful for your audience?
One very profitable option is to create some form of digital course. Because
if your audience enjoy your free youtube content, it’s likely some of them would be happy to pay
to learn more from you. This can apply in most niches - fitness, dating, business - if you are
sharing knowledge on your channel, there’s a good chance people would pay for a full system
where you can teach things more in-depth. Once you start selling your own product,
your revenue can really skyrocket, because now you’ve transitioned from just being a YouTuber,
to running a YouTube business.
On this channel I use the word magnate a lot,
which just refers to someone very wealthy and successful within business.
But sometimes I also use the term ‘YouTube Magnate’,
which means someone who combines YouTube and business together.
Stick with me here, because this is how you genuinely can become a YouTube millionaire.
Stop viewing your YouTube channel as a hobby or a job. Instead, think of it as a business.
Because once you introduce all the different revenue streams we just talked about,
especially the last one where you sell your own product,
or even your own service like coaching - it becomes more than just a youtube channel.
The YouTube videos become free marketing for the
products and services you’re selling. And that’s where the real big money is.
And let’s be clear: this definitely doesn’t mean your videos should suddenly start feeling like
ads where you’re spending half the time just selling people things. But if you look
at the creators who are making a lot of money, most of that income is not directly from YouTube,
it’s because they’ve leveraged the attention their videos get.
If this is starting to sound a little overwhelming, then bear in mind that
the very top channels almost always have a team working with them, they’re not doing it al alone.
The reason they’re able to put out lots of regular
high quality content because they have a video editor, a thumbnail designer, and so
on - different people to help them run the channel and business, so they can scale much faster.
Because the more sales you get,
the more you can grow your team and invest in making even better content,
which in turn brings in even more sales and to the cycle repeats and your income keeps growing.
So again, I repeat, think of YouTube like a business. Don’t rely on ads, have multiple
different revenue streams, especially a related product or service you can sell.
In the intro I mentioned a video with less than 1,000 views that made several hundred dollars.
That’s for several reasons: 1. There was an affiliate link,
and every sale earns me $100. So far it’s had 3 sales.
2. There was also a link to our YouTube Business Blueprint course, our own product,
that also had a sale from that video. 3. Very high CPM because of the topic.
So if the video does take off, each 1000 monetized views (remember not every view is monetized) would
be worth this much, so if it got 100,000 monetized views, it would make this much from ads alone.
So you can see how you don’t need millions of views to make a lot of money on YouTube.
You need the right approach. And if you are interested in building a business with YouTube,
then feel free to grab the first module of our YouTube Business Blueprint for free,
by clicking the link below. I’m not sure how long we’re going to give it away free,
but if the link is still there when you’re watching this, you can get it.
But now, if you’re wondering who the richest YouTubers of all actually are,
you can click on the video on screen for a list of the top 10, along with how much money they make.
Or alternatively, you can click on our analysis of how the YouTube algorithm works,
so you skyrocket your channel’s growth. I hope you enjoy, and I’ll see you next time.