September 30, 2020
A few weeks ago, I wrote a post about starting your own YouTube channel. In it, I mentioned how you could make money by creating videos and even have a business on YouTube.
Plenty of news outlets are saying that YouTube is a new form of television for the millennial age, and I happen to agree. YouTube recently launched YouTube Red, its subscription service that includes original content, as well as YouTube TV, which allows you to stream or digitally record shows on dozens of networks.
There are also content creators who operate outside this subscription service and still make millions of dollars. EpicMealTime, a channel known for making ridiculously large and unhealthy meals, makes around $3.1 million every year just from their channel. Of course, they do have over 7 million subscribers and average about 100,000 views per video.
Sounds pretty great, right? But it’s definitely not realistic if you’ve recently started a channel and have a business to worry about.
For EpicMealTime, YouTube is their business. They may have other modes of income, but they probably revolve around interest generated by their channel.
If you’ve started a channel for your business, and you are interested in monetizing it without putting in the work to gain millions of subscribers, there are still ways to make money from the videos you create.
I’ll explain how to enable the monetization function on your YouTube channel, how to profit from that function, and some alternative ways of making money on YouTube (because we can’t all have viral videos).
Enable YouTube Monetization
If you haven’t started your channel yet, I’d suggest going back and reading this article to help walk you through it. This refresher is going to be solely about the monetization capabilities of your account and how to enable ads on your videos.
YouTube introduced monetization for individual videos in 2009. They did this by attaching ads to each video and sharing the revenue with the creator, who allowed the ad to show on their channel. This was encouraging for both content creators and companies who wished to advertise to the new market of YouTube-watchers. So monetization became popular.
If you remember the sidebar in your Creator Studio, underneath the “Channel” option is a tab that says “Status and Features.” The page should look something like this:
In the first row of options, you can see the box marked “Monetization.” Mine is currently disabled, because I haven’t set the country location on this new account. If you click that link, or go down to the “Advanced” button in the sidebar, you’ll be able to set the location, set up ads, and play with the settings for optimal monetization.
After you’ve set that up, you can return to the “Status and Features” page and the Monetization box will say you’re eligible.
When you click the box, it will bring you to a page that kindly lists all the steps you need to take to become a YouTube “Partner.”
The only way you can take part in the monetization aspect of YouTube is by becoming a Partner. YouTube wants to make sure they know who they’re going to be paying, so they have to verify that you’re legit.
Since YouTube was bought out by Google, your money will be made through AdSense. If you don’t already have an AdSense account (which you definitely should), then you must sign up for one before pursuing YouTube monetization.
You’ll also notice that you need over 10,000 views to become a Partner. Your first 10,000 views can be the hardest to achieve if you don’t have an established audience or the funds to advertise your channel. It is possible, but you’ll need to be patient and diligent.
There are other ways to make money on YouTube (which I’ll cover later in this article), but without those 10,000 views, you won’t be making much anyway.
How Your Money is Made
Once you’ve connected your AdSense account to YouTube and met the requirements for monetization, you can start placing ads before and around your videos.
YouTube uses an algorithm based on your video’s content, the metadata you include, and the categories you choose. If you are optimizing your videos to the correct audience, the ads they show should match up with your audience’s interests. If your video is about fitness, they aren’t going to get ads for the next burger monstrosity at McDonald’s.
You can block ad categories on your AdSense account as well, so you can tailor the ads to your audience and what you think will bring you the most revenue.
There are a few different types of ads you can enable on your video. There are sidebar ads, which appear next to your video. There are the banner ads, which appear as a pop-up in the video box. There are skippable video ads, which play before your video and can be skipped. There are unskippable video ads, which users cannot skip before watching your video.
Depending on the type of ad, you can make more or less money. The more obtrusive ads make more money per view and per click, but they are also more likely to drive away customers, which you don’t want if you are still trying to build customer loyalty.
To Partner or Not To Partner
Most of the content creators who make millions of dollars from their videos are YouTube Partners. Here’s the catch, though:
- They make multiple videos per week.
- Each video gets thousands of views.
YouTube’s revenue split is steep. It’s a 45/55 split, meaning they take 45 percent of the revenue made from every ad sale or view made from your video and you get the remaining 55 percent. That’s not super lucrative.
There’s also the catch that YouTube gets to decide whether or not your videos can even make money. First, they must approve you as a Partner. To be approved, the minimum number of views on your channel must be over 10,000 and your videos must not violate any of their rules.
Even once you are a Partner, YouTube may decide to not give you ad revenue if your videos include any of the following:
- Sexually suggestive content, including partial nudity and sexual humor
- Violence, including display of serious injury and events related to violent extremism
- Inappropriate language, including harassment, profanity, and vulgarity
- Promotion of drugs and regulated substances, including selling, use, and abuse of such items
- Controversial or sensitive subjects and events, including subjects related to war, political conflicts, natural disasters, and tragedies, even if graphic imagery is not shown
You must also own all of the copyrighted material included in your video. So you can’t use a song you don’t own (purchasing it on iTunes doesn’t count) nor can you use video footage that belongs to someone else. There are fair use exceptions, but they don’t always count when money is involved. Make sure you review YouTube’s guidelines before using anything that isn’t yours.
If your video manages to pass all of YouTube’s restrictions, but gets only 1,000 views, you’re looking at pennies — maybe even a fraction of a penny — in ad revenue.
So unless you’re willing to jump through hoops to get paid only 55 percent of a less-than-ideal revenue, I suggest choosing a different way to make money from YouTube.
There’s a Better Way
If you don’t actually want to go into the YouTube content creation business and make videos as your job, but you still want to utilize YouTube to drive more traffic to your site, there are a number of ways to achieve that goal.
Affiliate Offers
You can utilize the affiliate business model through YouTube in a number of ways. You can use your channel to review products and offer affiliate codes at the end, or you can become a spokesperson for a particular brand and have them sponsor your videos (aka “This video is brought to you by …”).
To have your videos sponsored, you’ll need to have a good target market and viewership. Sponsors will want to know that your audience takes action and that your videos will generate leads for them.
Before seeking out sponsors, make sure you have these demographics nailed down:
- Gender: What is the distribution of male versus female?
- Age: How old is your audience?
- Geographic location: Where are your viewers watching your videos?
- Watch time: How long does your audience stick around?
Knowing what niche your videos fit into and who your sponsors are targeting will help you get the most out of your sponsorships. The more they sell, the more they’ll want to pay you to make videos.
Be aware, though, you’ll have to look pretty impressive on YouTube before a brand decides to sponsor you.
One of the most important things to have is a decent backlog of content. Viewers (and sponsors) will want options when they come to your channel. One good video isn’t going to make them subscribe. You want to have a consistent stream of quality content that viewers can look to when deciding whether or not they like your channel. For attracting sponsors, think of it as a portfolio of your work. It helps them decide whether or not your channel is a good fit for their brand.
If you have a big enough following (read: several thousand subscribers), sponsors may come to you first. If not, you’re gonna have to look for them. Websites like FameBit, Grapevine, and Grin are good for finding sponsorships when you’re just starting out.
E-commerce
If you have your own products to sell, you can use your channel to direct audiences to your website.
This opportunity doesn’t mean you should use your channel solely for advertising your business. If you want to get more views, you’ll have to make videos that people want to watch and make videos that will generate interest for your product.
The best example of this is Blendtec’s “Will It Blend?” show. Their channel was made to promote their blender, but they’ve posted only three commercials. The other 150+ videos are wacky product tests where they answer the question “Will It Blend?” by placing unusual objects in the Blendtec blender.
It’s a hilarious and entertaining show, and it’s gotten them over 900,000 subscribers and countless blender sales.
If you can entertain and sell your products in one video, you will make money.
Lead Generation
The simplest way to make money with your YouTube channel is to use your videos to generate leads. You should be doing this regardless of your Partner status or sponsorship, as lead generation doesn’t just get you subscribers, it gets you information.
If you direct your viewers to your email list, you can not only market to them over and over again in a more intimate and targeted capacity, you can also use the information you get from them to create look-alike audiences on Facebook and zero in on exactly who your brand appeals to.
Should I Create the Content?
If you are heavily involved in your business, then you might be compelled to be just as heavily involved in your YouTube channel. And while creating content and starring in videos could be fun, it might not be the best decision for your business.
When you create all of the videos on your channel yourself, you are not only making it harder to scale your business (you’ll need to dedicate more time to the channel), you’re also making it harder to sell. Should the time come when you’re ready to let this business go, you may have trouble finding a buyer who wants to pick up where you left off on YouTube and start making videos themselves.
While running your channel alone may be a good place to start, as it is more cost-effective, when your channel (and business) begins to grow, you’ll need to delegate. If you hire a contractor to make videos for you, selling the business won’t be a problem, because you won’t be as invested.
The same goes for if you star in a lot of your YouTube videos. When you become the face people associate with a business, you become a personality brand, which is even harder to sell.
So when you’re creating videos for your business, always keep in mind the future of the channel and how much you want to be attached to the brand.
It Doesn’t Happen Overnight
YouTube is a great way to make extra income for your business, but it certainly isn’t easy. To make a noticeable amount of money, you’ll need to attract thousands of viewers to each video who will watch the ads, click the ads, or buy whatever you’re selling.
Long story short, don’t expect to be making money by your fifth video (unless it goes ultra-viral). But you should set up your channel for success early so that when you do start getting views, you can monetize them immediately.
Start thinking about whether or not you want to be a YouTube Partner, look at other ways to make money like affiliate offers and lead generation, and always make sure you are doing what works best for your business.
Know that you’ll need to build trust for your channel by creating consistent, quality content that entertains, informs, and delights.
Just like you do for any business.