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How to Make Money on YouTube

How to Make Money on YouTube

How to Make Money on YouTube

Introduction

YouTube, founded in 2005 by three former PayPal employees, has become the second-most popular website in the world. Only Google (who bought YouTube in 2006) ranks higher.

This is no surprise at all. Check out these 2018 YouTube statistics:

  • Nearly 2 billion active users monthly
  • Over 30 million active users daily
  • More than 5 billion videos from 50 million creators
  • 300 hours of video content uploaded every minute
  • 5 billion videos watched every day, with an average viewing session of 40 minutes

That makes YouTube one of the most attractive platforms for content creators looking to make some money. In fact, some of the top YouTubers make 6-figures from advertising alone!

And while becoming a professional YouTuber can be lucrative, it does take a lot of hard work and smart thinking. Even then, there's no guarantee of a pay-off.

Still, if you're willing to put in the effort, here are some key tips to help you make money on YouTube.

Make Money Directly Through YouTube

The most obvious way to make money on YouTube is to make money through YouTube.

This is how most content creators get started on earning revenue with their videos. While you probably aren't going to make a lot of money using these three ideas, they're some of the simplest means of doing so.

1. Become a Partner

Becoming a partner is your first (and most important) step to making money directly through YouTube. Without becoming a partner, you won't be able to use either of the next two ideas.

It's a little easier said than done, though. Your channel – and more specifically your videos – need to adhere to the YouTube Partner Program's policies, which are updated fairly often. You'll also need to live in one of the countries or regions where the Program is available. This is a pretty expansive list, so not likely to be an issue.

Where it becomes more challenging, however, is in the next two requirements. Not only do you need to have a minimum of 1,000 subscribers, but your videos must have a combined total of 4,000 public watch hours in the last year.

The fifth and final requirement for becoming a YouTube Partner is having a Google AdSense account.

2. Connect to Google AdSense

Obviously, you'll need to have a Google AdSense account before you apply for the YouTube Partner Program. If you don't already have one, you can get started here.

Once you've been approved as a YouTube Partner, you'll be asked to link your Google AdSense account. Advertisers on the platform use AdSense to buy advertising space on YouTube.

As a general rule, if the advertiser is paying $20 per 1,000 “impressions” (each time a viewer watches the full ad and/or clicks on it), you can expect to get paid $2.

Bear in mind that ads aren't displayed every time a video is watched, so views won't directly translate to income. And you'll only see your money once you've earned $100 – so the smaller your channel, the lower your earning potential.

3. Check Out YouTube Red

AdSense isn't the only way to make money through YouTube.

YouTube Red (recently changed to YouTube Premium) is the ads-free subscription version that allows viewers to watch videos uninterrupted. They'll also be able to download content to watch offline.

If you have more than 1,000 active subscribers (“active” being the operative word), you can choose to join YouTube Red. Theoretically, this allows you to put select videos behind the paywall – think “exclusive content.” However, as long as you've agreed to YouTube's updated terms and conditions, your other videos will still be available on the free version.

So how do you actually make money through YouTube Red?

Well, all you need to do is do a live stream once in a while, with Super Chat enabled. Viewers pay you to have their comments and messages highlighted in real time. You'll also get a percentage of the membership fees, based on views.

Earn Money Marketing on Your YouTube Videos

Earning money through YouTube relies heavily on having a large fanbase who are loyal and engaged as an audience.

However, there are more ways to make money on YouTube other than AdSense, YouTube Premium, and Super Chat. Of course, they still depend on having that same fanbase. But if you're still working toward meeting the requirements for becoming a YouTube Partner, you can try some of these ideas to make some extra cash in the meantime.

4. Use Product Placement and Video Sponsorship as an Influencer

Depending on your content, you could use product placement and video sponsorship to make money as an influencer.

This happens when a company (or companies) have the same basic target audience as you do. Instead of paying YouTube for advertising that (let's be honest) most of us skip through, they pay you directly for shout outs.

Most will pay you according to a per-sale or commissions tier schedule. Here are some marketplaces to consider when looking for companies that may be interested in your channel:

Just be sure that you're willing to vouch for the company and their product if you choose to promote them in your video(s). Remember, your audience trusts you – and you'll earn more through commission when your endorsements come across as genuine.

Notify YouTube that your video contains an endorsement or product placement. All you need to do is tick the “paid promotion” box in your video manager's advanced settings tab.

5. Sell Merchandise You Can Sell Through Your Videos

Another way to make money on YouTube is to market yourself. If you have any merchandise that you're selling, and it's relevant to your audience, provide links to your e-commerce platform in your description section.

Here's a good example: Jenna Marbles. As one of the top YouTube creators, the comedian uses her YouTube channel to promote and sell shirts and posters with one of her dogs on them.

Of course, it takes money to make money by selling merchandise through your videos. You'll need to pay for an e-commerce platform, as well as the product materials (or find a manufacturer). But you can also sell downloadables, like art prints or ebooks.

Just make sure you have a secure payment system in place – such as PayPal.

6. Create a Course You Can Sell Through Your Videos

Another great way to make money is to create a course you can sell through your videos on YouTube.

The online education industry is likely to have grown to $325 billion in 2025, compared to $107 billion in 2015. The EdTech industry received $8.15 billion in investments, and generated nearly $200 billion in 2017 alone.

That makes it an incredibly lucrative market to break into.

But, again, you're going to need to spend some money to make money. If you're new to creating online courses, you should take a look at Teachable.

Next, check out these tips on How to Sell Online Courses Using YouTube to start earning.

7. Affiliate Links

Affiliate links work the same on YouTube as they do on any other platform, such as your blog. You join an affiliate program, add your referral link to your videos, and earn a percentage-based commission every time your viewers buy a product or service.

Seems simple, right?

Well, not exactly. There are a few best practices you ought to keep in mind at all times when planning on using affiliate links to make money on YouTube. Here they are in brief:

  • Obviously, you want to be providing valuable content of a high quality (how else are you going to attract viewers and entice them to use your referral links?)
  • Don't litter your videos and descriptions with affiliate links – make sure the ones you do add make sense in terms of the video's content
  • Be honest about the fact that they're affiliate links – otherwise you'll be breaking YouTube's rules (and Amazon's, if they're one of your affiliates), as well as breaking trust with your audience

If you're looking for some ideas, here is a list of the 10 Best Affiliate Programs for YouTubers.

Make Money Through Funding

Funding is one of the most direct ways to make money on YouTube.

Crowdfunding and Fanfunding platforms let viewers donate money to you, the creator. Some will opt for a monthly payment, while others will pay once in a while. Most often, you'll find viewers decide on a monthly donation.

While most of these will be in the region of a couple dollars each ($1 to $3 seems to be the most popular figure), you could attract patrons that will donate as much as $100 at a time.

8. Turn to Crowdfunding

Crowdfunding is the oldest funding platform type. Most of them only give an option for monthly “subscriptions” that can act as a sort of regular income for you as a YouTube Creator.

Platforms such as Kickstarter, the “king of crowdfunding,” use campaigns so that, when someone donates money, they get something in return. For example, you might offer exclusive (or “pre-release”) videos or merchandise, a monthly Skype call, or just about anything else.

As long as you have an attractive bonus to offer, sites like Kickstarter will help you to create hype around your campaign.

Reading Rainbow is running a Kickstarter campaign to help get the program into more schools and improve literacy. Thanks to the campaign features of the platform, Seth MacFarlane has jumped in with an offer to match the crowdsourced funds up to $1 million.

While you shouldn't expect quite the same type of hype (LeVar Burton, Reading Rainbow, and Seth MacFarlane already enjoyed celebrity status, after all), crowdfunding platforms can definitely help you make extra money off your YouTube channel.

9. Turn to Fanfunding

Fanfunding is highly similar to crowdfunding, but not quite the same. While you should certainly be offering something of value in exchange for the donations, you can't always expect the fanfunding platform to use a campaign model and help you build hype.

At the moment, there are two major fanfunding platforms relevant to our discussion on making money via YouTube.

YouTube's Fan Funding

YouTube's Fan Funding is the first, and perhaps the most obvious. Introduced in 2014, the initiative is also known as the Tip Jar. While crowdfunding platforms give the option of both one-time and monthly donations, Tip Jar only allows for single payments.

Fortunately, this can kind of work in your favor. You'll get to see what type of content is generating more income, and be better able to plan more lucrative videos.

Another major benefit: while Kickstarter takes 5% commission off every donation (and Amazon payments an extra 3% to 5% on top of that), YouTube's Tip Jar only asks 5% plus 21 cents.

You also have some flexibility in customizing your channel support page. Though, for the most part, creators seem to favor content with the fairly uniform use of pop-up overlays. Donations are typically framed as $1, $5, or “other” pledges.

Here are the requirements you'll need to meet in order to be eligible:

  • Your YouTube account needs to be in good standing (check this article by Tubular Insights on what that means)
  • You need to meet the general criteria for the YouTube Partner Program, and ideally already be a partner
  • Have your YouTube account via the phone
  • Your network needs to be enabled for YouTube Fan Funding (if applicable)
  • You have a Google AdSense account that's been approved and linked to your YouTube account

Ready to get started? Derral Eves has a great video on How to Enable Fan Funding on Your YouTube Channel – Tip Jar.

Patreon

Patreon was originally expected to take quite a knock when YouTube's Fan Funding was first announced, especially as they charge higher commission rates (5% plus around 4% in processing fees). But thanks to their adoption of campaign language similar to traditional crowdfunding platforms, they still remain as one of the most popular platforms.

Another reason that Patreon has maintained its position is its economic scale. While YouTube's Tip Jar deducts commissions on every individual donation, Patreon processes just one payment every month from participating patrons. Additionally, the credit card fee is then split between all of the creators.

Let's use an example to illustrate why this is an advantage:

Assume you post a video once a week. One of your viewers (“Joe Public”) opts to donate $5 per video via Tip Jar, or $20 a month on average. You now have to pay credit card fees on each of those payments.

Another of your viewers (“Jane Doe”) opts to donate $20 to you every month, as well as to another YouTuber, via Patreon. Patreon deducts the full $40 from Jane's bank account once a month and pays you and the other creator your $20 each, minus their commission and credit card fees.

But instead of paying those credit card fees in full four times a month like with Joe Public's donations via YouTube Fan Funding, you only pay for half of the full credit card fee for Jane's donation. The other creator pays the other half, so you both end up saving.

The important thing to remember with Patreon is that you shouldn't think of it just as a way to make money. Experts advise on approaching the platform's use as a way to engage with the fans you love the most.

When YouTube's Fan Funding was first launched, Tim Schmoyer published the following video on Patreon vs. YouTube's Tip Jar: Why I'm Using Patreon.

Here's another video (by Satsu2Cents) on How to Use Patreon – Clearing Up Some Confusion if you're looking for more info on the subject.

Conclusion

As you've seen throughout this article, there are plenty of ways to make money on YouTube. The best part: you can make serious money – as long as you apply yourself well and think outside the box.

However, like all legitimate ways to make money, you aren't going to get rich quick with YouTube. There is a lot of groundwork that you need to cover before you can even start generating an income on (or through) the platform.

So – like with Patreon – you shouldn't merely think of YouTube as a way to make money, but rather a way to engage with your audience and leverage that asset through the network to create revenue streams.

Which is exactly what this article is designed to teach you.

The important thing is not to be compelled by the prospect of making money. That's rarely the motivation behind the most successful YouTubers' journeys.

Instead, they're focusing on creating high-quality content for its own sake.

Ironically, that's exactly what enables them to earn their YouTube-based income. And that's exactly what will help you do the same.

If you're feeling all fired-up and ready to get started with your YouTube channel, check out YouTube Creators for tips and advise on doing so. After all, who better to teach you than the platform itself?

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