YouTube is currently the largest online video platform. Opportunities for monetizing your content and getting paid by the video giant have also never been greater. The most successful YouTube creators explore and combine multiple revenue sources, but there still seems to be confusion around how YouTubers actually make money.
For starters, the number one thing you need to focus on is building a loyal and engaged audience. If you don’t have that, then monetization is essentially pointless. Once you have the audience, then you need to ensure that your account is in good standing and that you’ve enabled monetization within the YouTube settings.
Next, you need to associate your YouTube channel with your Google AdSense account, which is how YouTube delivers your earnings. Once you’re setup, explore these five different ways on how you can get paid for YouTube video content.
- Ads: Ads within YouTube are the most straightforward method of monetization. This is likely what your company is already doing, or you may have seen these ads on other YouTube videos. In a nutshell, you get paid by placing relevant ads in or around your YouTube videos.
Ads are chosen and served through Google’s AdSense network, along with other Google advertising partners. The revenue is based on a 55/45 split in which the creator (you) gets 55 percent while Google keeps 45 percent.
These ads can appear as “skippable” (Figure 1) or “non-skippable” (Figure 2) video ads, which are typically pre-roll video ads that play before your content. Payment structures are based on a cost-per-thousand (CPM) model in which creators get paid if a viewer watches the ad. Both video ad formats can be displayed on desktop or mobile versions of YouTube.
YouTube’s other two advertising formats are display and overlay ads (Figures 3 & 4). The overlay ad appears as a semi-transparent clickable banner inside the video, while the display ad appears to the right side of the video player.
These ad formats only work on desktop versions of YouTube so they’re not ideal choices for creators who have significant mobile audiences. You should also make note of any important visuals, graphics, and overlays within your videos that could be blocked by these advertising formats.
All earnings depend on the number of impressions your ads receive. The more views your content gets, the more you will make. Keep in mind that you cannot monetize on these formats in all countries. Check out the list of YouTube monetized markets to see which countries allow for YouTube monetization.
Videos enabled for monetization will still be shown to viewers in countries that are not on the list, but those viewers won’t be served any ads. Also, only public videos can be monetized on YouTube, so that rules out companies using the private video feature.
- Donations: YouTube created a fan-funding program in 2014 that allows creators to receive voluntary payments from their viewers and fans using Google Wallet. The viewer is given the option to donate to a YouTuber through a “support this channel” button that appears on a channel homepage or is inserted through the YouTube “cards” feature.
In order to receive payments, you must have a valid Google Payments Merchant account associated with your YouTube channel. This option is considered less intrusive than serving ads, and it has a more lucrative split for creators. YouTube only takes a small fee for processing the transaction, an amount that varies by country (Figure 5).
Currently only the United States, United Kingdom, Australia, France, Japan, Mexico, and Spain allow this program. This option is also only available to viewers on desktop and Android devices, not iOS devices as of this date.
- Merchandise: You can profit by selling merchandise directly through merch annotations and cards on YouTube (Figure 6 & 7). For publishers selling goods, this is an ideal revenue option to use as viewers can click directly on a video annotation or card that links to several approved external retail sites.
The most successful merchandise videos are ones where the in-video creative includes the product. This is a great option for how-to, unboxing, and DIY-style online videos. Cncourage viewers to buy something by spotlighting products in these videos.
Keep in mind that the most engagement occurs within the first few days of uploading a video to YouTube, so the merch annotations or cards should be created and inserted in the YouTube creator studio before your video goes live. One tip is to schedule your video so that you can add all annotations/cards ahead of time and make sure they’re working correctly.
- Sponsorships: YouTube does allow for brand sponsorships including product placement and endorsements as long as you adhere to its policy. In a nutshell, YouTube does not want viewers and users to feel misled, so it wants creators to be upfront about any commercial relationship they may have with a brand.
You must notify YouTube of any paid product placement, endorsement, or commercial relationship in the advanced settings tab when uploading a video (Figure 8).
This is a great way to bypass Google/YouTube and negotiate your own terms with brands and sponsors for marketers who adhere to the policy. For example, YouTube’s policy allows for static title and end cards that can display a company logo or graphics as long as they are no longer than five seconds. Title cards that appear at the beginning must be co-branded with the YouTube creator’s information (Figure 9).
This option makes sense for how-to videos or even complementary brand deals like this example from the What’s Up Moms YouTube channel.
- Paid Content: One final option is requiring users to pay a fee to purchase or rent your videos. Publishers can apply this toward a single video or their entire channel and set their own pricing structures. This is a traditional model used by Netflix, iTunes, and Amazon in which users watch your videos with an ad-free experience.
You must have more than 1,000 YouTube channel subscribers to use the paid-content feature and it is only available in 16 countries. You can get the full details of this feature by visiting the YouTube paid-content support page.
Similar to other revenue sources, you have to determine if you have an audience that is willing to pay for your content first. One suggestion is to offer free teasers or lessons in an instructional series and then charge viewers for the remaining lessons. This is a similar model to that used by Lynda.com, one of the world’s largest online video training sites.
It’s perfectly acceptable for brands and marketers to experiment and try some or all of these revenue options. You’ll want to factor in cost, time, and resources before making any financial decisions.
Be sure that the revenue option makes sense for your brand and doesn’t dilute it in any way. It’s also important to keep the user experience in mind; think about how some of these options may affect that. Finding a good balance between providing useful content and making a profit might take some time, but it can definitely be achieved with the right strategy.