Since its launch in 2005, the popularity and reach of YouTube, the global video-sharing platform, has skyrocketed, and it’s become the second-most-visited website globally (after sister company Google). YouTube’s online presence continues to grow year after year.
Roughly 1 billion hours of videos are watched collectively by YouTube users every day, according to the company. After Facebook, YouTube is the next most popular social media outlet of choice for businesses wishing to share video content.
Most don't realize that YouTube has valuable potential for business owners beyond its primary use as a free social platform. YouTube is an excellent way for sole proprietors to market their business and bring in additional income while educating or entertaining audiences through visual content and subscriber loyalty.
Read on to learn how YouTube can be an effective platform for income generation by using the built-in YouTube features and directing traffic to outside marketing and sales avenues.
How Much Can You Make on YouTube?
The beauty of YouTube is its reach and accessibility. Anyone can become a YouTube creator and start garnering views. However, earning substantial monthly income on YouTube from scratch is more complicated.
Two billion active monthly users watch over a billion hours of video and generate billions of views on YouTube every day. Around 500 hours of content is uploaded to YouTube every minute by people in over 100 countries speaking 80 different languages.
To say that the platform is popular would be a massive understatement: YouTube has become a part of most internet users' everyday lives. Over a quarter of the world's population and almost half of nearly 5 billion global online users are active on YouTube every month. But, of course, there are pros and cons to this fact.
As a benefit, YouTube is highly accessible for small business owners to market their offerings and interact with audiences. The downside is that, unless you diversify income sources and find your niche, you may get lost among the billions of videos uploaded each day.
YouTube creators who understand these principles have developed profitable channels and businesses. Those who upload low-quality, poorly planned videos without a marketing plan get lost in the sea of YouTube obscurity.
How YouTube Videos Earn Money
A picture is worth a thousand words, and a YouTube video can be worth millions of dollars. Video content is a priceless way to connect with potential customers and showcase your products. Viewers are twice as likely to buy something they saw in a YouTube video and four times more likely to look for information about brands, products, or services using YouTube versus other platforms, according to YouTube.
YouTube won't tell you what kind of videos you can create on its platform; however, the company does have community standards and an obligation to maintain the safety of their users.
If you join their YouTube Partner Program (YPP), you will be held to higher standards and need to meet policies and guidelines to remain in the program. YouTube regularly will review your channel and content to make sure it meets standards.
Which kinds of content appeal to your customers most? Which calls to action (CTAs) work best with your target audience? Which types of free resources can you use to draw them in for sales or channel memberships? What brands or causes do they care about that you might partner with?
Make sure you're asking the right questions before you film and upload your first video. Then, using a content strategy, figure out who your audience is and how they like to shop.
Ways To Make Money on YouTube
Here, we’ll cover several possible ways to generate income using YouTube as a platform, starting with the basics (ad revenue) and moving on to explain more advanced income-stream options (like premiering):
Ad revenue from YouTube videos is the most basic way to make money on the platform. AdSense, Google's ad revenue program, allows creators to show advertisements on their videos and receive a portion of the income YouTube receives from advertisers for creating and hosting the content. Here are some statistics:
- Google pays creators at a rate of 68%. This means for every $100 an advertiser pays, Google pays $68 to the video publisher (that's you).
- The actual rates an advertiser pays vary, usually between 10 cents to 30 cents per view, but the average is 18 cents per view, according to social media researcher Influencer Marketing Hub.
- The average YouTube channel can receive about $18 per 1,000 ad views across its channel, This amounts to roughly $3 to $5 per 1,000 video views.
- Although the company doesn’t directly disclose the information, media outlets and Influencer Marketing Hub report that Google keeps about 45% of what advertisers pay, so you may only earn between $1 and $2 per 1,000 views.
Any channel can implement this option, as there are no restrictions on subscriber or view count. Some advertisers on YouTube pay CPM (cost per thousand views). However, the viewer must watch the ad for at least 30 seconds (or half the advertisement for a brief video). Many use CPC (cost per click), only paying out once a viewer clicks on the ad.
AdSense only pays when your account reaches $100. This is because it can take thousands of views on a single video at a rate of a fraction of a cent for a single ad view before you receive any income from it.
YouTube Partner Program
You can earn ad revenue from a free YouTube creator account with basic functionality. However, after meeting certain milestones, your channel can join YPP and earn even more income from additional features. A YouTube channel needs these elements to qualify for the program on an ongoing basis:
- Has 1,000 subscribers
- Has 4,000 valid public watch hours over the last 12 months
- Is available in your country
- Follows all YouTube monetization policies
- Has a linked AdSense account
Once those channel goals are met, YouTube offers additional ways to make money as a YouTube Partner, including:
- Advertising revenue: Ad revenue gained from the display, overlay, and video ads on your videos.
- Channel memberships: Subscribers can make monthly recurring payments in exchange for special perks or rewards.
- Merch shelf: The YPP merchandise “shelf” allows your fans to buy official branded channel merchandise that you can showcase.
- YouTube Premium revenue: Get part of a YouTube Premium subscriber’s subscription fee when they watch your content.
Used with discernment, channel and video sponsorships are effective ways to increase viewerships, sales, and credibility as a small business on YouTube. In addition, brand partnerships, sponsored videos, or product placements are great ways to expand your income on YouTube.
Companies can offer sponsorships on a per-sale basis or in commission tiers. Search for the best affiliate marketing sites (beyond the Amazon affiliate marketing program) to look for top-paying beginner sponsoring opportunities.
Promoting Your Merchandise, Products, or Services
Many YouTube channels develop related merchandise or products for sale after growing a large fan base. On the other hand, some creators already have art, products, or services that they market on YouTube.
However, you will need somewhere to direct people to in order to purchase your items, like a business website with shopping features (like Shopify) or a marketplace (like Etsy). So be sure to add your store's link to every video description and use the CTAs at the end of your videos with ending screens or "cards" buttons.
One-Time Crowdfunding and Ongoing Fundraising
There are two primary kinds of crowd-sourced funding options available for business owners with YouTube channels: recurring and one-off, project-based crowdfunding.
One-off crowdfunding involves seeking financial support for a single project or product from donors via the internet. Many highly successful businesses got their start from crowdfunding support. Some of the best-known crowdfunding sites, like Kickstarter and Indiegogo, are great for financing creative and innovative projects.
Make sure you set an attainable funding goal if your crowdfunding because some of these sites will only pay out once you meet your fundraising goal.
Direct Traffic To Grow Your Blog
Hosting an active blog almost always outearns keeping an active YouTube channel. Blogs as a marketing platform allow you to connect with your audience on a deeper level through educational and inspirational written content, email lists (and marketing), resources, and partner with larger ad companies. Combine with your YouTube channel, and you'll have a winning combination that appeals to both visually and word-based audiences.
Use a YouTube channel to direct traffic to your other earning web spaces, too. YouTube can also help expand your social media accounts (Pinterest, Instagram, Facebook, and more) as well as offer more chances for sponsorships, visibility, and income outlets.
Amazon Associates Program
Amazon Associates is the world’s largest e-commerce marketplace’s affiliate marketing program. It is often used by YouTubers to bring in a bit more income per video. Links of Amazon products used to produce the video (such as lighting, sound, or camera equipment) or recommended products are linked below with the description. You receive a percentage of the total a customer spends with Amazon within a 24-hour window after they arrived there via your affiliate links.
Livestreaming and Premiering Features
Livestreaming and premiering are two popular video content categories on YouTube. For example, gemcutters host events where people can watch them grind precious stones, artists paint in real time, and famous gamers play with fans around the globe.
While the mobile livestreaming function is only available to YouTube channels with more than 1,000 subscribers, it is also an option for businesses that want to use a webcam setup. If your livestream is less than 12 hours long, YouTube will automatically archive it after it ends, and you can decide whether to make it visible or not.
Sell While Educating Through Tutorials
You don't necessarily have to sit in front of your camera to make successful YouTube videos. Many creators—especially artists—show a shot-from-above or hands-only process of their work in how-to videos. Tutorials and how-to videos are extremely popular on this app, and with the proper marketing, can reach millions of views, depending on the topic.
Your business can also show behind-the-scenes videos of how your products are made and then point viewers to those finished products for sale within the video or in the description links below.
Set Yourself up for YouTube Success
- Choose your niche: The more specific, the better! Define your niche by brainstorming what makes your business different from the rest and who will be specifically interested in your content. Knowing the details of who your target audience is will help you define your YouTube channel’s identity and creator strategy.
- Interact with your audience: Observe who watches your videos, where in the world they are, how engaged they are, and how long they watch them. Post consistently, and make sure to share and engage after you post. Use social media to promote and tease your videos! Take advantage of Instagram stores or reels, TikTok, Twitter, Facebook, etc.
- Produce quality videos: Within your budget, buy the best equipment you can afford to shoot and edit your videos. For tips, check out the recommended equipment sections in the descriptions of videos from creators whose setups you admire. You can also use YouTube to learn how to edit your videos. Get a YouTube Content ID to protect your videos and make sure others aren’t using your content and profiting off it without permission.