Seven ways in which YouTubers make money

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Published: March 16, 2021 at 11:23 am

Last Updated on October 1, 2023 at 9:19 pm

Ask a random person, “how YouTubers make money,” and they are likely to say, “from ads”, and by this, they refer to Adsense insertions at the start and middle/bottom of the video. However, Adsense income is only one of many ways in which YouTubers earn money. In fact, with experience, one learns that there are better ways to make money on YouTube. A listing and discussion of YouTube monetization methods.

Adsense Revenue

The current eligibility is 1000 subscribers and 4000 public watch hours (The Freefincal Youtube Channel got Adsense approval before this rule kicked in). Many new YouTubers get discouraged by these limits. The problem is that Adsense Ad revenue heavily depends on how active you are in producing video content and quality.

Quality in social media only means how long the video is watched, how often they are chosen when recommended in the notification feed of a subscriber or the video feed of a non-subscriber, the engagement level (comments, likes, dislikes) etc. This is why content creators spend time creating catchy thumbnails and titles. Of course, the content also matters, but obviously, “five stocks to buy in 2021” will do better than “how to value a stock”.

Assuming you know how to create “quality” content, ad revenue depends on video production regularity. Rain or shine, you have to push out videos at least once a week (they may take hours of shooting, editing or outsourcing costs).

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A few videos might go viral (high ad revenue for a few days) or even provide consistent revenue. However, if you wish to scale the income, then the watch time of videos should increase, not just subscribers.

I know of channels with a few lakhs of subscribers but not even 2000 views per video. “Binging with Babish” clocks in a minimum of one million views per video, and this with about 8.7 million subs! So only about 10-12% of subs would watch the videos! (In my case, it is about 3-5%).

The point is, we should think beyond Adsense revenue while starting a YouTube channel. The effort per dollar earned is too much.

Other forms of advertisement revenue on YouTube

The main enemy for Adsense revenue is ad-blocking – primarily from desktops. There are other forms of advertising which circumvent this.

2. direct ads: get ad clips from advertisers or agencies and insert them within the ad. Only reasonably established channels can pull this off.

3. paid promotions: The YouTuber introduces a product as the “sponsor of the video” with a discounted (affiliate) link in the video description. There are media agencies that can get such deals. These can get funny or weird at times (Adam Ragusea introducing men’s briefs while cooking a sausage dish).

4. paid reviews of a product with affiliate links, aka “influencer campaigns”.

5. Good old affiliate marketing: Many YouTubers add Amazon buy links for the mike, light, camera they use etc., in every video description. The difference between 5 and 4 is, in 4, agencies contact the channel owner. In 5, the channel owner researches products that pay the highest commissions and are high-ticket (e.g., cruise trips) and review them independently.

6. All of the above means of promotion can also be done (or re-done) by posting on the channels community page or via “Youtube Shorts”. Listing this as a separate item as it not something people realise.

There is one key difference between Adsense revenue and the above methods (except 5). Adsense pay only if the ads are watched. I have explained how Adsense advertising works in this video.

The content creator can negotiate significant upfront payment for the other methods. For example, Rs. 5000 deal on a product promotion (this is on the lower end, celebrities can demand a lot more) would mean we can turn off Adsense ads on that video! (Some product manufacturers may even demand this). It is revenue before a single view is registered!

The problem with product-promotion or affiliate income is a conflict of interest. If your audience has no sense of community around you, it is fine, but once you have a brand established, it may put off many viewers – I am not referring to losers who post long hate comments.

I get daily emails for product promotion (particularly demat account opening!), but that is not my cup of tea. If you do not mind affiliate marketing (promoting other’s products), then take the plunge when your channel (or blog) is new.

Promoting our own products/skills

All the six methods of monetization discussed above involve advertising products manufactured by others. A less-discussed but extremely profitable method is to promote our own brand or own products/services – often indirectly.

For example, I don’t have to explicitly mention the robo advisory template in every third video posted. Just the mention of the site name or posting in the community tab results in traffic here to respective product pages and conversions.  Videos offer an excellent way to discuss the features of a product.

There are some caveats in this method, though. The content creator must focus on community building and not views or even subscribers! This works well for technical content, explanations, webinars etc.

Many digital marketers will significant web traffic to their sites, or channel views take the bold step of disabling Adsense. This helps them to promote their own services in a distraction-free way.

If you are interested in starting a YouTube channel or a growing one, we recommend providing engaging content. Adsense (or direct ads) can always be turned off or on at any time or per video. The main issue is with expectations. Many expect to make 1000s of dollars each month but only can pull this off and require consistent content creation: YouTube recommends creating about a month’s content in advance at any point in time.

At the start of the content creation journey, many people may not even think of their own products. So this need not be an immediate consideration for most. However, this income can quickly overtake ad income in the long run, requiring less regular content creation.

In the earn from skills course, we discuss how to lay the foundations for this and build a community that trusts you and buys from you. More than 550 members are part of our exclusive Facebook group working on their skills. We are on the verge of creating 1000 videos on YouTube. To celebrate the occasion, you can join the earn from skills course at a 40% discount (Rs. 3000 only instead of Rs. 5000) via this link.

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Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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