Recently in class we’ve been learning about how marketing has changed over the past couple of decades, with the latest documentary expanding on the topic of the modern day’s emphasis on views and likes. In the documentary, two YouTubers are interviewed, showing how creating videos and posting them on a video-sharing platform can become a person’s full-time job with the help of sponsorships and brand-deals. This made me wonder, exactly how much money does a YouTuber make, and what can they do to make more money?
One way YouTubers make money is through the ads that often appear before their video starts and sometimes appear half-way through their video. YouTube charges advertisers approximately 18 cents per view when a viewer watches the entirety of an ad. Because of ad-removing apps and the ability to skip by an advertisement after five seconds, only around 15 percent of viewers actually watch the whole advertisement. YouTube takes 32 percent of the ad revenue, leaving the YouTuber with 68 percent. So how much money is the YouTuber given? Let’s take the YouTube video “Double King” by Felix Colgrave as an example. This video has 14 million views, and because only around 15 percent of those viewers watch the ad in its entirety, there are around 2.1 million paid views. Because each of these paid views is worth 18 cents, a total of $378,000 is charged to the advertiser. Since the YouTuber makes 68% of what the advertiser is paying, Felix Colgrave receives about $257,000 from advertisements on “Double King” alone. As a general rule of thumb, YouTubers receive $18 per a thousand views.
In addition to advertisements played before videos, YouTubers make money through branded integration, which is when a brand is mentioned or featured in a video. On average, YouTubers charge $10,000 per 100,000 views to promote a product. YouTubers can promote the product in a couple different ways, such as by directly telling the viewer that the video is sponsored by a particular company, featuring a product within their video (such as unboxing videos), or by creating an entire video starring the product.
Another common way YouTubers promote products is through affiliate marketing, which means attaching links in the content on in the video description to companies’ websites or places to buy a certain product. Affiliate marketing also includes promotional codes (“use code James for 10% off”).
Sometimes, YouTubers can become brand ambassadors, which is when a YouTuber and a brand agree to become public long-term partners. The YouTuber might be obligated to meet a certain quota of sponsored posts or attend events as a brand representative.
Crowdfunding using Patreon, selling original merchandise, and writing books or starting podcasts are other popular options for YouTubers to promote their channel and make more money.
With so many channels and videos available to watch on YouTube, it has become a highly competitive platform that isn’t always profitable. Although not everyone can earn as much as PewDiePie, who makes a whopping $12 million per year, many people do manage to make YouTube a full-time career thanks to advertisements, sponsorships, and brand-deals.
I thought that this was a very interesting topic to see analyzed. I appreciate that you took the time to calculate how much money a given video makes. I also think that it's interesting to look into how advertising is changing on the platform, with more videos becoming demonetized. When an advertisement is shown on a contraversial video, the response to it is less positive, lowering the value of the advertisement and putting the brand's reputation in jeopardy. After brands didn't want to be associated with certain people on the website, Youtube changed the algorithm so that content that was deemed not advertiser friendly would no longer earn money, preventing advertisers from leaving the site, since the value of the advertisements stayed high. This is partially what sparked an increase of Youtubers using Patreon or getting sponsored independently from Youtube, expanding this marketplace.
ReplyDeleteThis topic is especially interesting to me because I have always wondered how YouTubers are paid. In the past couple of years, there has been an ongoing argument about the demonetization of some YouTube channels. Youtube has been cutting ad revenue from some YouTubers who they see as in their words, not "ad-friendly." This has sparked major controversy in websites community, leaving some well known creators channels ultimately non-profitable. On the other hand, Youtube's advertising can be seen as a genius marketing strategy. The website will filter advertisements to suit certain videos. A video teaching someone how to play guitar could be promoted before the video even starts by a company promoting their guitar lessons.
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