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How to Make Money on YouTube

Want to earn fame and fortune online? You may be wondering how to make money on YouTube. The video sharing platform has made its share of celebrities, some of whom have been able to capitalize on all those views. Let’s take a closer look at how YouTube works and how you can earn money on YouTube. 

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Getting Started on YouTube

Let’s start with the basics. If you want to start making money on YouTube you’ll have to become a YouTube user if you’re not already. As a YouTube/Google user you’re eligible to set up a free Google AdSense account. That’s where you can sign up and enter your PayPal account details or your bank account details. You’ll need to enter personal details such as your mailing address to get your account up and running. This is an important step because it lets you get paid for your YouTube videos.

To monetize and get access to analytics you’ll need to become a YouTube partner. That can also give you access to YouTube resources like their production studio space, and to grants to help you cover your costs and grow your audience. Check out the criteria for YouTube partnership here. Once you’re a partner you can monetize through ad dollars, paid subscriptions and merchandise. Certain kinds of videos, including those that violate copyright, are not eligible for monetization.

Once you have a YouTube Channel (or multiple channels), a YouTube partnership and an AdSense account, you’ll need to enable monetization on your videos. You can either do this when you upload videos or go back and enable monetization on videos you posted previously.

What does it mean to “enable monetization”? It means that you’re allowing ads to show on your videos and if those ads reach your viewers you will get money. You can enable monetization on multiple videos at once, but you must make sure that the videos you want to monetize are set to “public.” Any videos set to “private” can’t be monetized on YouTube.

OK, so you’re ready to enable monetization on your publicly available YouTube video. When you go to upload a video, click on the “Monetization” tab and select “Monetize my video.” Simple enough, right? You’ll have the option of selecting from a few different advertising formats and placements. Click “Save Changes.” And you’re done!

To go back and enable monetization on videos you’ve already posted, go to your Video Manager in your YouTube account. You can click the dollar sign ($) next to the video you want to monetize, or click “Edit.” Go to the Monetization tab and click “Monetize my video.” Select your desired ad format and save your changes.

Related Article: 6 Easy and Lucrative Side Jobs

How to Make Money on YouTube: Advertising

How to Make Money on YouTube

Advertising dollars on YouTube are paid out in two different ways. The two different models are Cost-Per-Click (CPC) and Cost-Per-View (CPV). So, money you make from YouTube ads on your videos isn’t directly based on the number of subscribers your channel has or views your videos have. To earn you money, a viewer has to either click on an ad or view it for several seconds. These can be the video ads that play before the video the viewer wants to see, or they can be banner ads on the page with the video. You get paid more for clicks than for views, but both forms of monetization will show up in your AdSense account.

You can also use Google AdWords to analyze the performance of your videos and learn lessons that will help you earn more money on future videos. In Google AdWords you’ll be able to track how much money you’re making, how many ad clicks your videos get, which of your videos get played the most and more analytics data points.

There are also analytics available right on YouTube. In your YouTube channel menu you can click on Analytics to see how your videos are performing. You can learn about the demographics of your viewers, for example.

If you don’t already have a following for your YouTube channel or you want to grow your following, you can take steps to help users find your videos. By adding keywords in the tags for your videos, you’ll make your videos more find-able when users search for videos. You can do this in the Advanced section of your YouTube channel settings. Select relevant keywords (it’s a good idea to avoid stuffing this section with keywords that aren’t actually relevant to your videos just to chase views).

Once you have a YouTube Channel, monetization is turned on and you’re using keywords, Google AdWords and Google AdSense, it’s a good idea to be consistent with video posting. In general, shorter videos perform better, and users who post regularly will retain more viewers.

How much do you make from YouTube ads?

The answer to the question of how much you make for YouTube ads depends on who you are. Advertising revenue is generally expressed as a number of dollars or cents for every thousand views or clicks. This is sometimes referred to as the RPM (Revenue per “Mil” or thousand).

The RPM you earn will depend on how valuable the clicks and views on your videos are to advertisers. You could have an RPM of $10 or 25 cents, or anything in between. And there’s another important fact to know: YouTube takes 45% of the money YouTubers earn on AdSense. What’s left might not add up to much.

RPM on YouTube ads has been trending downward. That’s led to plenty of articles decrying the decline of YouTube advertising spending and warning that it’s getting harder to earn a living on YouTube. There’s so much competition for views and ad dollars that users have to hustle more than ever.

Another complicating factor is the rise of ad-blockers. Viewers who use ad-blockers never have ads served to them, which means YouTube and the videos’ creators can’t monetize. Ad-blockers cut into YouTube revenue.

YouTube Red charges customers a monthly $9.99 subscription fee to give them access to ad-less content. If your channel has a lot of YouTube Red subscribers, you stand to earn more than you would from getting the same number of views from ad-supported YouTube.

How do you boost the amount you make from YouTube ads? There are several ways. The more popular your videos are and the more your audience engages with ads, the more you’ll get paid for the ads on your videos. You can also increase your profit by decreasing the amount you spend to make your videos. If you can cut down what you spend on editing and other production costs, you’ll keep more of your ad revenue as profit.

YouTubers reportedly earn about $2,000 for every million views. Then, YouTube takes its cut and the YouTuber must pay taxes on that income. It’s easy to see why relying on YouTube advertising dollars as your sole source of support is a risky proposition. Plus, not all videos have ads on them. Less than half of video views have pre-load video ads play on them. Yes, there are YouTube millionaires just like there are app millionaires, but it can be a tough road.

You may find it helpful to join a YouTube content network. Being a member of a network can give you access to help with production costs and advertising and sponsorship deals, but networks take a further cut of users’ earnings. There are also programs like Patreon that let your followers donate to your channel.

Related Article: The Economics of Mobile Apps

How to Make Money on YouTube: Sponsorships

Another way to make money on YouTube is through sponsorships. Technically a form of advertising, sponsorships work differently from the ads that play before your YouTube video plays. With a sponsorship, a brand can send you a particular product and pay you to discuss that product in a YouTube video. This is a common practice in the worlds of fashion and beauty.

The higher your profile, the more money you stand to make from sponsorships. A brand probably won’t want to send you its product for a sponsored video if you have around 50 followers. However, recording sponsored videos comes with risks, too. In general, it’s considered best practice to disclose which products you’ve been paid to review or promote. If you make it clear that a particular video is sponsored by a brand your viewers will be more likely to retain their trust in you than if you keep a sponsorship a secret from the viewing public.

Some viewers don’t want the vloggers they follow to do any sponsored posts or videos. Most, however, tend to accept that an (accurately disclosed) sponsored video from time to time helps vloggers earn a living and doesn’t erode the vlogger’s integrity as long as the product review is honest.

Marketing Your Videos

Marketing is key to making money on YouTube. Some people can get lucky and have a simple home video they made with no intention to make money suddenly go viral. But if you want to be a little more purposeful about your plan to make money on YouTube videos, it’s important to market those videos.

Creating great content and adding relevant keywords will both help with marketing. People will be more likely to flock to videos that are a) high-quality and b) easily found via user searches. But that’s not all the marketing you can do.

For starters, you can share your videos on social media and ask your friends to do the same. If you have money to spend, you could even use traditional advertising methods by buying ad space.

It’s also a good idea to engage with the users who comment on your videos – within reason. There’s no need to get in fights in the comments, but it’s important to make your viewers feel that you appreciate them and are keeping an eye on your channel.

Word to the Wise

How to Make Money on YouTube

A person who wants to make money on YouTube videos may be tempted to turn to some less reputable means of increasing views and gaining visibility. For example, there are programs that continually refresh the page, artificially driving up the number of views a particular video has. Some users may also be tempted to create false accounts to create more comments, likes and subscribers.

Why the temptation to employ tactics like these? Getting a coveted spot on the most viewed or recommended pages on YouTube can help you make more money by increasing your ad revenue and raising your profile, which can help you get sponsorship deals and partnerships.

However, YouTube started as a community of users who by and large were not seeking monetary gain. The video sharing platform has retained some of that ethos. As we mentioned above, users can turn on a vlogger they suspect of being inauthentic. Any tricks a person plays to get users can lead to a viewer backlash.

Bottom Line

If you spend a lot of time on YouTube you can probably bring to mind at least a few people who have turned their videos into a lucrative income stream. That doesn’t mean you should quit your day job tomorrow. Building up a devoted YouTube following can take time, and only once you have impressive viewership can you cash in in a serious way. If you want to make money on YouTube, think of it like starting a business on the side. Develop a business plan and a strategy, work hard and you may strike it rich.

Photo credit: ©iStock.com/4kodiak, ©iStock.com/TARIK KIZILKAYA, ©iStock.com/Jason Doiy

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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