How Do People Make Money on YouTube?

By Happy Last updated Feb 3, 2023

It used to be easy to make money on YouTube by uploading great content, getting millions of views, and getting a cut of the money from ads.

Now, people who make content have more ways than ever to make money from it. This can be done through advertising, corporate sponsorship from a big brand, fan funding, or sales of merchandise.

Table of Contents

Google Ads

Joining the YouTube Partner program is the first step to making money on YouTube. Through the partnership, content creators can use special tools like Google Adsense to make money from their videos.

To be eligible, content creators need at least 1,000 subscribers and 4,000 hours of watch time over the past 12 months.

YouTube makes money from videos through pre-roll, display, and other types of advertising. Advertisers pay based on the number of clicks and views. YouTube gives the person who made the video 55% of this money and keeps the other 45% for itself.

Advertising rules must be followed by people who make content. Ads won’t be put on content that has bad language, adult content, violence, or other things like that. This can include talking about news events that are hard to talk about.

Brand Sponsorship

Brand sponsorship, which is also called “influencer marketing” in the world of digital marketing, is a good way to make money with advertising.

A company will pay a person who makes content to talk about a brand or product in a video. For example, Lancôme noticed Michelle Phan early in her YouTube career because of her popular make-up tutorials.

As of 2019, there were more than 700 agencies that help brands connect with social media influencers on sites like YouTube, Facebook, Instagram, Snapchat, and Twitter. Google bought Famebit, which is related to YouTube. It is now called YouTube BrandConnect instead of Famebit.

Fan Funding

Channel memberships are also a popular way to make money off of a channel. Monthly payments are made by fans and followers in exchange for extra content like badges, emojis, special videos, live chats, and other content.

If a YouTube partner has more than 1,000 subscribers, they can use this feature to make money.

Third-party services like Patreon also help video creators make money from their fans by letting them join for a monthly fee. The best people who make videos can earn up to $40,000 per month from their fans.

Merchandise Sales

When this feature is turned on in their accounts, YouTube partners can also sell up to 12 items of merchandise to their audience. Jeffree Starr has made a lot of money from his fans by selling them lipstick, highlighters, and eye shadow palettes.

YouTube Best Practices

Creators should stick to YouTube’s best practices to increase their chances of getting a big following. One of the most basic best practices is to make content that is rich and interesting.

People go to YouTube either to have fun or to find a solution to a problem they are having. By making good content, the video is more likely to be watched and shared.

Optimizing videos for YouTube searches is another way for people who make videos to get more people to watch them.

This means using the Google keyword planner to find words that a lot of people search for and putting those words in the YouTube video page’s description and tags.

Another popular way to get more people to watch a YouTube video is to promote it on social media and through paid media advertising.

Revenue Generation Challenges

Even if all of these best practices are followed, it can still be hard for YouTube video creators to make money.

As of the first quarter of 2020, the cost per thousand (CPM) rate that advertisers paid was only $3.53. Because creators only get paid for monetized views and not for all views, their CPM can be much lower.

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Conclusion

Even with these problems, people who can get a large and loyal following on YouTube can make a lot of money. Forbes says that the best-paid YouTube video creators make close to $20 million a year, so it’s easy to see why so many people want to tap into this source of income that seems to have no end.