Think you have what it takes to get in front of the camera and upload some videos to YouTube? If you’re a casual creator then you shouldn’t expect to make much money, but when you approach it like a business you’d be shocked at how much you can take home.
A common question from those staring slack-jawed at the numerous articles (like this and this) that detail YouTubers earning millions is…
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How do you make money on YouTube?
These confused people are usually referring to the direct method known as CPV (cost-per-view) or CPC (cost-per-click), but there are definitely more ways than one to skin a chat. Get it? Vlogging? Come on. Anyway, we’ll explore both here.
Method 1 : Advertising Commissions
The most common way to make money on YouTube is through their partner program called AdSense. This program also goes hand in hand with Google Adwords. There are actually 2 preliminary questions you should first be asking in order to understand how this translates to money in your bank account.
First Question : What is Google Adwords?
Google Adwords is an auction program Google famously innovated that allows advertisers to bid on keywords related to their business and display their custom advertising alongside relevant and similar content either on search engine results pages or next to website content.
Second Question : What is Google Adsense?
Google Adsense is the partner program that allows content creators and publishers to earn money when they display the text, display (images), or video advertisements that businesses create or upload in Google Adwords.
So How Does That Translate To YouTube?
In the case of YouTube, publishers (video creators/YouTubers) can make money by signing up for AdSense and then opting in to allow ads next to the videos they’ve published on the platform. From their Google detects the video category or niche and displays the most relevant advertisement. Some of these advertisements are represented as short commercials that display prior to the publishers video and others are overlaid text or display ads that pop over the video.
As the viewer you have the option to close out of the video ad after 5 seconds or click the [x] on the overlay ads to unobstruct your viewing experience.
If the viewer sits through the entire video or decides to click through and visit the advertiser in the text or display ads then the video publisher gets paid a portion of what the advertiser paid to Google Adwords.
Method 2 : Everything Else
Before we move on to figuring out how to make millions off YouTube it’s important to consider that AdSense isn’t the only way to make money. In a lot of cases the videos that are uploaded serve as tutorials, reviews or viral content that appeal to mass audiences or specific niches. In those cases the publishers may simply be looking to sell you a product or service by linking to an external website. Basically the video acts as click bait to get you into their sales funnel.
It’s impossible to know how much money people are making in this way since it’s not trackable and can be easily fudged and that’s why these are all lumped into their own bucket. There’s definitely a lot of opportunity here, but for the purposes of this article we’ll focus on the advertising model since that’s probably what you wanted to know anyway.
How do you make millions of dollars on YouTube?
I’m guessing this is the real question you were trying to get at. I’m also going to give you the benefit of the doubt and assume that you’re smart enough to know it depends almost entirely on video views.
As I said above the AdSense model is built to pay for a click or view. Basically every time someone completes one of those actions you’ll get paid.
How much do I make per click/view?
This depends. Simply put every niche is different and the payout is largely based on the advertiser’s ROI (Return on Investment).
Like I said it’s an auction process so basically advertisers are bidding for your click or view. They bid higher and higher until their budget can no longer support it.
Let’s look at a couple examples to get an idea how different these can be.
When searching for “mommy makeover” on YouTube I came across this video with advertising enabled. You can see that they’re displaying a relevant insurance ad before the video that might entice a viewer to abandon their video and renew their insurance. Anyone thinking about getting a tummy tuck should also be thinking about how much insurance will pay so it makes complete sense to advertise on this term.
If you look at the Google Keyword Planner to see how much top advertisers are bidding on keywords with searches similar to “mommy makeover” you can see that they top out around $6.25.
So if Google is splitting roughly half of that amount for every click or view this video could potentially be making around $3-4 for every full view. You don’t need a massive amount of views for that kind of money to start adding up. Just 25 a day could equate to around $100.
Let’s do another…
How much do you make per click or per view?
Step 3: How
In particular, you’ll find that the top YouTube Channels have a lot in common:
How Much Money Do Top YouTubers Make?
When getting into any niche you want to ask yourself where the core base of your potential readership (or viewership in this case) comes from. Every niche has a unique relationship with today’s social channels and some of them are perfectly suited for making a lot of money with video based content.