How do people make money on YouTube in 2020, and is anything going to change next year?
With the way the world is right now, I’m willing to bet that YouTube will roll out some huge features in 2021. With Tik Tok hitting 800 million downloads since last year and Instagram’s smorgasbord of new features (Reels, Guides, and SEO in half a year), YouTube has its work cut out for them.
However, this social platform has a lot more to offer than its competitors, and it has a way of doing things that I personally don’t see changing. The way people make money on this platform, for instance, isn’t going to change.
There was a phenomenal increase in content consumption in 2020, likely due to the worldwide quarantine. According to a study reported by Forbes, “Average daily time spent consuming content is now six hours and 59 minutes, which includes phone, TV, and other forms of digital media.”
With more and more people consuming content, you have a better chance of finding your niche audience. As you’ll come to learn, your audience is going to be the catalyst that decides what your income can become, therefore giving you new streams of revenue for your personal brand.
How Do People Make Money On Youtube?
You don’t need to be famous on YouTube to make money. In fact, the most significant portion of video creators makes their money elsewhere.
Just like most business owners, our stream of revenue comes from a variety of sources. So it’s not a matter of becoming an influencer YouTuber to make some cash; it’s really just about using YouTube as that extra income source for your personal brand and your business.
In the blog, I’m going to walk you through the steps in a chronological way, starting with the easiest and most immediate way to make some extra money through your YouTube videos and ending with the most common (and most difficult) means of making money on this platform.
1. Affiliate Links
People don’t seem to talk about affiliate links these days, and maybe that’s because some brands consider it an old tactic. But that would be like telling your clients not to send you referrals for your products or services.
These were all the rage when people first started blogging because they made people excessive amounts of passive income. They still do, but people don’t use them as much anymore.
Affiliate marketing is when you take links from other companies to promote their product or service. In exchange for using their coded links, you’ll earn a small commission from any sales.
Amazon affiliate program, Amazon Associates, is the most significant and easiest place to obtain affiliate links. Once you sign up (and are approved) for the affiliate program, you can link anything from makeup products to your $5,000 camera lens. You’ll make, on average, about 5% commission for the total cost of the product.
Even if you have a YouTube channel that promotes low-cost affiliate links, an easy workaround is to include your entire YouTube setup (camera, lens, lighting, etc.) with affiliate links for anyone who is inspired by you to start their own channel. All you have to do is have the products and your links listed in your video descriptions.
Be sure to mention the products in your video!
2. Sponsored Posts
The next step on how people make money on YouTube is through sponsored posts. This is when another company will pay you cash to promote their product or service.
That’s why it’s ideal to get started with affiliate marketing first. If you produce engaging and professional videos that receive a decent number of views and you can provide proof of your success with affiliate marketing, a company would be foolish to pass up an opportunity to work with you.
Generally, how this works is that a company will reach out to you. However, there’s no shame in reaching out to your favorite companies to ask if they’re interested in a collaboration.
You’ll want to provide your demographics, statistics, and a list of services to the company for them to consider. This is usually put together in a Media Kit to make things simple.
If they seem interested, tell them your prices. You can also have this listed in your Media Kit, but it might be best to wait to pitch your sponsored video prices in a video conference call or over email. It leaves room for negotiations.
As for what to charge, the best place to get industry standard prices is through Social Bluebook. They’ll request access to your YouTube channel analytics and give you a realistic price you can charge per video.
87% of people admit they’ve made a purchase because an influencer prompted them to, according to Review 42, which means your YouTube channel needs to a personal brand. You need to show up in your videos to let me see, like, know, and trust you.
At least if you want to make money from your YouTube channel.
3. Fan Funding
This step might seem a bit off-putting if you’re just a small business owner or a CEO, but let me explain what I mean by fan-funding.
When you think of fan funding, your mind might immediately go to platforms like Patreon. Patreon is primarily a membership platform where the creator offers different tiers and pricing points for the audience. Each level will offer a service, product, or simply some behind the scenes “members only” content.
Most people will start at a $1-$5 tier, giving them access to the Patreon-only content and sometimes a Discord (a private chat community). From there, you can charge upwards of hundreds of dollars for your top-level tiers. It’s up to you what you provide in those tiers, but exclusive products, signed books, one-on-one feedback/consultations are popular choices.
What’s more popular in the business sector is crowdsourcing on platforms such as Kickstarter, Indiegogo, or Crowd Supply. This type of fan funding can be donation-only, or you can use it to earn capital for your business.
As Hubspot points out, Kickstarter “has helped 15 million people pledge $3.7 billion to successfully fund more than 143,000 projects. Funding is all or nothing, so you must meet the goal you set within the allotted time, or everyone gets their money back.
It’s also important to remember that each platform takes a fee (typically starting at 3%), so price accordingly.
YouTube ads are instantly what you think of when you consider how people make money on YouTube.
As of 2017, YouTube imposed restrictions on who is and isn’t eligible to have ads on their channel. Some of their requirements include:
- At least 1,000 subscribers
- 4,000 minutes average watch time within the last 365 days
- Your channel and videos comply with all of YouTube’s policies and guidelines.
YouTube will notify you via email when your YouTube channel is eligible for monetization. You will also need to create a Google Adsense account to start earning. On average, YouTube Creators make around $4 per 1,000 views. Some channels can make up to $15 per 1,000 views, but the prices vary depending on your niche and your industry.
As you can tell, it’s going to take a lot of time and video content creation just to become eligible for YouTube monetization. And even then, a video with 10,000 views will garner you only about $40 on average. You need to start earning in the hundreds of thousands before YouTube ads can be your primary or sole income source.
The good news is, YouTube now offers multiple ways for you to earn money on their platforms. From exclusive channel memberships to YouTube Premium revenue, you have plenty of options to choose from.
Extra Ways To Build a Profit with a YouTube Channel
The goal for building your YouTube channel shouldn’t stop and end and how much money you can make. If you’re here, chances are you’re looking for a way to boost your personal brand so that you can have the career of your dreams.
Simply having a YouTube presence will open doorways for you. If paid speaking gigs are on your career bucket list, a YouTube channel demonstrates how you present yourself to an audience. And while your subscriber and view count can be an extra incentive for events looking for professional speakers, the content within the video is all that matters.
YouTube content is also likely to pique investor interest. In fact, “82% of investors want a company that has a strong brand.” If you’re a founder, having personal brand video content works to display your expertise in your industry— something investors are dying to see before your pitch meeting.
RELATED: 10 YOUTUBE TIPS FOR PERSONAL BRANDS
When you’re just starting on YouTube, however, the most profitable way you will make money with these videos is through your own products and services.
As a personal branding strategist, I make video content to share my expertise with those actively seeking it. With a little keyword research and search engine optimization (SEO), I can get my videos seen by people outside of my current audience.
My videos have around 127,000 views. So, an average of 2k views per video. Google says the average CTR (click-through rate) for YouTube videos is between 2-10%.
Even if we played it safe and said 4% of my viewers clicked on my website services (because I mention them in a video), 80 extra people came to my website every time I post a video. Even if I just covert 1 of those people into a client, that’s one new potential client per week if I’m consistent.
How Do People Make Money On Youtube – With a Personal Brand
Ultimately, when you consider how people make money on YouTube, it all boils down to the same thing:
They have a personal brand.
Yes, you can start a Youtube business brand and use your employees to record scripted videos— but that’s not where the money is.
A personal brand YouTube channel is the reason why we have so many multi-million-dollar “YouTubers.” It’s their unscripted, vulnerable, and ultimately relatable video content that earned them millions of subscribers. And those millions of subscribers make it possible for these people to create any type of business.
And many of the business ventures see a profit simply because of their fan base.
Again, you don’t have to have millions of subscribers to earn income from YouTube. You can have a couple of hundred subscribers and still sell your service or product, land well-paying conference gigs, and garner investor interest.
Here’s the takeaway if you’re ready to start making money with your videos:
1. Know what you’re an expert in
This might be easy for you if you have a designated title, such as a CPA. But the work of a CPA isn’t linear, and I’m willing to bet there’s one topic every CPA can claim they know best. That one thing will be their ultimate niche and the basis of their first series of video content.
Not sure where your area of expertise lies? Ask your friends, your family, or even your current audience.
2. Know your audience
If your audience isn’t interested in learning about How To Start a Business from their CPA, then don’t make videos around those topics. Even if you know and even like talking about this topic, chances are, your audience wants to know about your financial expertise when it comes to building their business.
3. Work your way up
Start from step #1 (affiliate ads) and work your way up my list. Ideally, you want to make money from each of these steps. This will only be possible if you create your video posting schedule and stick to it.
What it takes to make all of these things happen is your personal brand.
And okay, you’re videos probably need to look and sound professional.