There are dozens of stats that capture the power of YouTube, but if you’re looking for one persuasive reason to join the channel, it’s this: YouTube is the second most visited website in the world, with 100 million paid subscribers consuming content.
This platform garners an astonishing amount of attention. YouTube remains a go-to channel for audiences across many demographics, which is why small businesses can benefit from investing in YouTube ads and monetizing content on their channels.
There are several ways to earn money on YouTube, including sponsorships, in-stream video ads, and channel memberships. In this guide, we’ll break down the different options to generate revenue on YouTube and help you approach advertising on this powerful social media channel.
How can you earn money on YouTube? Ads vs. monetization
There are two general approaches to marketing on YouTube. You could promote your business by engaging in paid advertising, or you could monetize your content, meaning you could earn revenue by creating and posting YouTube videos. Each approach has pros and cons, although many businesses do both.
Paid advertising on YouTube differs from running a traditional PPC or paid social media campaign. The platform has specific creative constraints, including some meant to protect viewers and advertisers from harmful content. You can find YouTube’s advertiser-friendly content guidelines here.
There are also many different types of ad formats to choose from, which can make it a bit complicated to maximize your return. According to one benchmark, “YouTube ads have an average cost-per-view of $0.010 – $0.030, and the views that you generate will count towards your overall YouTube viewer count. This means that the average cost of reaching 100,000 viewers is around $1,000 to $3,000.”
Monetizing your content can also take many forms. You could become an affiliate marketer or license your content to other channels. If you wish to monetize the content you post on your YouTube channel, the first step is to join YouTube’s Partner Program. To be eligible, you must meet one of two standards:
- Get 1,000 subscribers with 4,000 valid public watch hours in the last 12 months, or
- Get 1,000 subscribers with 10 million valid public Shorts views in the last 90 days.
Once you’ve cleared these benchmarks, you can link your YouTube channel to your Google AdSense account and submit your videos in consideration of monetization through AdSense.
[Read more: How One Couple’s Financial Journey Evolved Into a Hit YouTube Channel]
Ad types on YouTube
In the YouTube Studio app, YouTube offers the option to turn on advertisements for individual or multiple videos. These ads play in the middle of your video content and give people a chance to skip them after a few seconds.
There are a variety of different paid ad types to consider on YouTube. Here are a few of the basic formats to consider:
- Skippable in-stream ads play before, during, or after other videos. Viewers have the option to skip the ad after five seconds, and advertisers pay when viewers watch at least 30 seconds of the ad (or the entire ad if it’s shorter than 30 seconds).
- Non-skippable in-stream ads also play before, during, or after other videos, but viewers cannot skip them. They are typically shorter than skippable ads; advertisers pay based on the number of times an ad is shown.
- In-feed video ads appear as a thumbnail and text in YouTube search results, on the YouTube homepage, and in the "Up next" section. Advertisers pay when a viewer clicks the ad to watch the video.
- Bumper ads are short, non-skippable ads that last no more than six seconds, ideal for quick, impactful messages. Advertisers pay based on impressions.
- Masthead ads appear at the top of the YouTube homepage. They’re ideal for large-scale campaigns since they can appear on devices of all sizes (from phones to TVs).
- YouTube Shorts ads appear between YouTube Shorts videos and are designed for mobile viewers. These ads can be skipped by swiping.
YouTube’s full guide to advertising formats can help you set up your ad to meet the channels’ specs. Make sure you read these guidelines carefully to make sure your ad is designed properly to be viewed across devices.
YouTube is the second most visited website in the world, with 100 million paid subscribers consuming content.
How to get started with YouTube ads
YouTube uses Google Ads to target its videos to the right audience, so before you get started, make sure you have both a YouTube and a Google Ads account for your business.
Once you’re logged in, start by uploading your marketing video to your YouTube account with all the necessary information (title, description, tags, etc.). Then, go to your Google Ads account, click on “All Campaigns,” and choose the video campaign type. This option will lead you through a series of prompts to set up your campaign goal, set your budget, and place your ad according to the display options listed above.
[Read more: 6 Tips for a Killer Small Business YouTube Strategy]
Monetizing your YouTube channel
Focus on building your subscriber base to become eligible to join YouTube’s Partner Program and start monetizing your content. Building and engaging your audience is key to creating successful YouTube channels.
It can take trial and error to determine what content resonates with your audience. Top categories on YouTube include:
- Product reviews.
- Gaming.
- Cooking.
- How-to tutorials.
- News.
- Unboxing videos.
- Life hacks.
- Celebrity gossip.
One easy way to see what works is to post regularly and track your analytics. Promote your channel and create a regular cadence so your followers know when to tune in for new content. Ask viewers to like, comment, and subscribe; target your niche audience and review your YouTube statistics often.
It can take some time to build up your following, but once you’re ready, the YouTube Partner program gives you access to several monetization methods, including YouTube Shopping, Super Chat and Super Stickers, channel memberships, and more.
What are other ways to earn revenue on YouTube?
Monetization and ad revenue are the two main options for earning money, but there are other tools on YouTube to help you make the most of your content.
YouTube Premium is YouTube’s ad-free version, in which subscribers can pay to watch content without ads. Accept YouTube’s contract modules to make money every time a Premium subscriber watches your content. The amount varies, since revenue is paid from subscriber fees and depends on how many Premium users view your videos. Find out more on YouTube’s support page.
Affiliate marketing can also be a lucrative strategy on YouTube. Monetize YouTube with product reviews, unboxing videos, and “best of” content. You can mention the brand in your video and include an affiliate link to the product website. In some cases, affiliate partners may provide coupons or promo codes that you can share with your audience publicly or offer to members only.
Finally, you can also create membership options for your YouTube content and earn revenue from subscribers. You can charge $0.99 to $499.99 per subscriber to your YouTube channel, offer various membership levels, and provide up to five perks. Membership benefits include content and chats, but you can also create a custom emoji or badge.
Members-only perks consist of:
- Community posts: Share unique content with your subscribers to add value to your membership. Community posts can include text, polls, video, and images.
- Video: Create and promote members-only videos that provide insider tips or include outtakes or extra footage from public content.
- Livestreams: Connect with your community by going live on YouTube. Select “all paid users'' to speak directly to subscribers.
- Live chat: During public livestreams, you can communicate with paid subscribers via live chat. These chats are private, so only members can view them.
- Milestone chats: In a live chat, highlight one subscriber per month to recognize your loyal fans and the duration of their membership.
Finding the best combination of revenue-generating tactics for your brand on YouTube can take a little tinkering. Ask for feedback from your followers regularly and stay up-to-date on YouTube’s new releases; the platform is always offering new ways to make the most of your content.
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