Have you ever watched a YouTube star’s video & thought, I could’ve done that? Me neither. From all the influencer platforms, YouTube strikes me as the most intimidating. But it can also be the most lucrative, with top YouTubers earning well into the 6 figures from advertising revenue alone. And this pie is only getting expanding: YouTube recently reported that the number of users earning over $100,000 on the platform has increased by more than 40 percent annually; currently, 75% more channels have exceeded a million subscribers versus last year.
Where eyeballs go, money follows. “People giving up TV & getting video content through mobile devices is a huge trend & brands are spending huge amounts to reach those audiences,” says Evan Asano, the CEO of MediaKix, an influencer marketing agency. “It’s very similar if not bigger market for influencers than Instagram.” Another reason brands love YouTube is that its numbers are harder to be fake. “You can buy views on YouTube, but it’s much more expensive than buying followers & likes on Instagram,” Asano says. “It’s pretty cost-restricted to drastically inflate a channel’s views on a consistent basis.”
So, how do YouTubers (or “creators,” in the platform’s parlance) make money? Most rely on 4 income streams: advertisers, sponsors, affiliate marketing & old-fashioned goods and services.
Until last few months, pretty much any random person could enable the youtube monetization setting on their YouTube account & get ads on their videos, allowing them to earn a few cents for every time a person viewed or clicked on their content. That all changed in January, however, when Google (YouTube’s owner) announced new standards to merit the ads. Now, to be accepted into the “YouTube Partner Program” & monetize your channel, you need a minimum of 1,000 subscribers & 4,000 hours of watch-time over the past 12 months; your videos will be more closely monitored for inappropriate content. Meanwhile, YouTube also promised that members of “Google Preferred” — a vaunted group of popular channels that make up YouTube’s top 5 percent & command higher ad dollars because of it — will be more carefully vetted.
There was a little backlash over these new benchmarks, but frankly, the vast majority of people who lost their monetization privileges weren’t earning much anyway. Most channels make somewhere between $1.50 and $3 per thousand views, depending on their content & audience, and Google won’t even cut a paycheck for under $100 (or around 50,000 views — a pretty tall order for the average 14-year-old posting tutorials for eyeliner). In other words, if you were looking for an easy side gig, YouTube was never an efficient choice.
Instead, YouTube success takes time & dedication. Kelli Segars, the co-founder of Fitness Blender, a YouTube channel with over 5 million subscribers, spent two years posting new workout videos every week before she & her husband could quit their day jobs in 2010 to focus on their brand full time. Still, without YouTube, Fitness Blender probably wouldn’t exist. “When we started to create free online workout videos, we found that most streaming platforms charged so much to host content that we were never going to be able to break into the industry, let alone offer free content to our (then nonexistent) audience,” says Segars.
Sponsorships and affiliate marketing
For other YouTube content creators, ad dollars only go so far, and a significant portion of revenue comes from sponsorships & “affiliate marketing” (when brands offer a commission on any sales or traffic that the creator’s content drives). Affiliates pretty seamlessly through YouTube; anyone can include links to featured products in their video’s caption, and when audience members click through and buy them, that YouTube channel gets a small kickback. Most of the YouTubers prefer Amazon’s affiliate program, “Amazon associates,” although there are plenty more to choose from.
But sponsorships are where the big bucks are made & where intermediaries like MediaKix and other agencies come in. This is the major leagues: Most brands aren’t interested in YouTube channels with fewer than 200,000 – 300,000 subscribers or average views of less than 10,000 – 20,000 per video, says Asano. The bar is also too much high because videos cost more to make, and require tricky negotiations —the sponsor will want to know where their product will be featured, for how long & so forth. “When we’re connecting top brands with top influencers on YouTube, you’re talking a minimum budget of $50,000 to $100,000, and it just goes up from there,” Asano explains. “Some of the biggest YouTube influencers get paid $100,000 to 200,000 for a single video. And then those videos get millions of views. That’s why there’s a lot of money in the space.”