How Do YouTubers Make Money?
YouTube has undeniably popularized to one of the most visited sites on the Internet. In recent years, the popularity of certain YouTubers’ have skyrocketed, as these filmmakers are seen as more relatable and personable “celebrities,” albeit having comparable salaries to traditional celebrities: the highest paid YouTuber as of today is PewDiePie, who makes $12 million a year from his videos. So to what do these YouTube stars owe their success? The answer is simple: ads, ads, ads!
Now obviously a YouTuber must be making quality content for anyone to be watching their videos in the first place, but a YouTuber’s earnings isn’t primarily based off of how many subscribers they have, or how many views their videos get. Instead, they get paid from the share YouTube makes from showing ads on their videos. Many advertisers choose to use the cost-per-click (CPC) model that we’ve discussed in class. This means that the advertiser pays money based on the number of clicks their ad receives. Because YouTube is a video platform, it would make sense that advertisers also utilize the cost-per-view (CPV) model, where advertisers pays money based on views. A view is counted when someone watches an ad for longer than 30 seconds or for half of the length of the ad, whichever comes first. So YouTubers aren’t getting directly paid from the ads that are being shown alongside their videos, but more so by people’s engagement with the ad; YouTubers won’t get paid unless their viewers decide to click on an ad or choose to continue watching an ad.
An effective way to make sure the people watching a certain ad will be interested in it, is to target a specific demographic, one based on the video that the ad is being placed with. This is relatable to they style of keyword-based advertising. Someone watching a Michele Phan (the most popular and highest paid beauty-guru on YouTube) video will likely be a female in her teens or early to late 20s. Thus it would make more sense to put an ad for a makeup product with her videos rather than an ad for car insurance. Thus many YouTubers choose to target a specific audience, whether it be video-gamers or makeup enthusiasts; advertisers prefer channels with a defined demographic to maximize their profit. And as more than 50% of revenue received from ads goes to the video creator, it widely benefits YouTubers to create constant quality content for their specific target audiences.
Sources: http://www.forbes.com/pictures/gjdm45jih/1-pewdiepie-12-million/
http://videopower.org/how-many-views-to-make-money-on-youtube/