Welcome back to my podcast Anyone Can Make Money On Youtube. I’m Kim and I believe today’s podcast is what you have all been waiting for:
How in the world did I make $90,000 on Youtube in my first year, am I crazy clever, did I just get lucky, or was it all a grind?
It’s apparent that most people and even current YouTubers do not understand how they make money on Youtube or further, the possible ways to leverage their platform before they are even accepted into the Youtube Partnership Program.
Thats correct my lovely friends, I was making money during the Fall of 2018 before I could even run ads.
Disclaimer: Obviously everyones experience on Youtube can be different based on their audience and content so please keep in mind this is an examination of my experience on Youtube and everyones will vary. In fact I have no idea on how I compare to other channels of my same size, maybe they make a lot more than me, Ive looked at Social Blade but it’s a range based on average CPM’s, because CPM varies from channel to channel based on content and niche its tough to gain a accurate picture for a channel, its more of a general idea. We will dig into CPM in a bit, just keep in mind there are a ton of variables that cause ad revenue.
Quick personal plug: if you are enjoying this podcast please leave some Review Stars, 5 stars are always nice and a kind review, this goes so far in helping this podcast be found by others who are interested in what I am sharing, so thank you I appreciate you taking your time.
Also my channel, social media handles and all the equipment I use on Youtube and this podcast, are linked in the description of this podcast and over on my website www.naturalkaos.com remember kaos is spelled K A O S.
In this episode there is so much to cover and I want to do a thorough job in explaining how to make money on Youtube so I have broken this episode into 3 chapters, this will help keep me organized and help you anticipate what I plan to share.
First we will talk about the different ways to monetize, second, we will cover the dreaded CPM concept which always seems to be a bit baffling, and Third we will go over my ad revenue from 2019. Further, if you want to see a video of me showing the financial breakdown and growth of my 2019 year, you can find that video linked below.
Let’s talk about ways to monetize on YouTube; and if you don’t know the word monetization, it simply means making money off of something you’ve created. Youtube is your creative platform how are you going to make money from it so you can continue creating value for others?
So many people have no idea how lucrative a Youtube channel can be, they either believe that Youtube is not a legitimate business or they realize people make money on Youtube but honestly have no idea how, or how much.
Frankly, Im not sure why Youtube creators don’t reveal the money they make, perhaps they think people won’t watch them if they find out they are being compensated by ad revenue or sponsorships, but even this is illogical because if you are giving value and its FREE to the user then why would the user be upset? I’m a user too, and when someone serves me with good content I’m not upset to watch the ad that I know allows them to create good content.
Instead all of us should be grateful our needs are being met for free and love these creator’s even more. It’s actually why I think Youtube is the perfect system.
These are the 8 ways to make money on Youtube:
1. Google Adsense which are the ads that run during videos and you need to qualify for this program.
2. Affiliate Links, Amazon being the most lucrative for me but basically every company has an affiliate system these days.
3. Sponsored Videos, this is When a brand pays a creator to make a video or to use a product showcasing it to their audience.
4. Merchandise or as my boys like to call it “Merch” this is where you sell product like t shirts and water bottles branded with your channels logo.
5. Selling your own product or service. Many YouTubers especially in the entrepreneurial space will have online courses they sell or e books, remember these are the things I tell you not to buy. Lots of these same types of channels will also offer their services, like coaching, or a certain expertise, again I don’t believe in paying for their services. I just like figuring everything out myself because the internet has your answer for free, plus you learn so much when you hunt.
6. When you are Live Streaming or do Premiers for new videos fans can give you money with Super Chat and Super Stickers.
7. Many creators do Patreon, its a site that collects money 1 time or on an ongoing basis and gives it to the creator. Many fans like supporting their favorite creator with $5/month as an example and this usually gives them access to a special forum or contact with the creator.
8. Channel Memberships are similar to Patreon, but this money is paid out from Youtube. Again like Patreon, channel memberships are a monthly fee that gives subscribers extra perks. These are perks that you as the creator make and deliver on.
I actually only utilized the first 2 ways to monetize my channel so far: Google Adsense and Affiliate links.
During this past year I have been approached to do sponsored content, and although I am not totally opposed to the idea, I have to be careful because my channel is about beauty and travel, so it has to be the right fit. Plus I care too much about my audience to do sponsored videos that I don’t believe in, thus I may do some sponsorships in the future but so far I have not done any.
My boys would love for me to create some “Merch” but I’ve not taken the time to set that up either. There are sites like TeeSpring that make it super easy. They of course take a good portion of the sale but as a focused busy creator it simplifies this situation, you never need to stock or ship anything. During 2020 I plan to create some cool merch, but I don’t perceive it being a huge revenue source, I'll let you know in a future series.
YOUR OWN PRODUCT
As you may remember I have created and sold my own products in the past with Freckle Baby. Selling my own stuff is not something I enjoy any longer but I understand why many Youtuber’s do it, and I think if you are selling digital downloads, like, E books, diet plans, self help organizers etc this could be a good revenue stream.
LIVE STREAMING & PREMIERS
Every video I upload I launch as a Premier. I think this helps drive it in the algorithm, it creates community because a bunch of friends are online with me at the same time and we can chat as we watch my latest video, and although I do have Super Chat enabled I have never received any money from people while we are online together, so I don’t know how viable this revenue stream is. I also noticed that Youtube takes half of what a fan sends, so if they send you a $2 sticker you actually only receive $1, thus this system doesn’t seem like a great way to make money. I think it may work better in the gaming genre but I am not 100% sure on who makes a lot from Super chat and Super Stickers. If you are huge like 10 million subscribers and you do a Premier and 100,000 fans are on with you, the Super chat and Super stickers may be more valuable because if a fan wants to connect with you them sending a $20 Sticker may be the only way you as a creator will see them. Again these are big boy YouTube issues, not small creator ones.
PATREON AND CHANNEL MEMBERSHIPS
I’m on the fence about how I feel and view Patreon and Channel Memberships. I actually do pay one Podcaster a monthly Patreon fee and that’s because I wanted to be in his discord channel all about growing your Youtube and so I think there was value for me initially with that group. I pay $5/mo for access to this group but lately, I rarely have time for it. I guess its nice knowing I could go there for support if I needed it. Plus he did have me on his Podcast the day I hit 20,000 subscribers thus I feel connected to him and most likely will continue to support him in 2020. His podcast, is Youtube Creators Hub and it really helped me in the beginning, perhaps Dusty Porter will hear this podcast, if so Hi Dusty thank you for all of your insight and for having me on your podcast.
I ran through these options with you because I wanted you to know what existed even if I am not personally taking advantage of every way to monetize. With that said, I believe outside of brand sponsorships, I have focused on the most lucrative ways to make money on Youtube, which in my opinion is Google Adsense and Affiliate links. Sponsorships can be the most lucrative way to make money on Youtube but if you are starting your channel no one is going to sponsor you because you do not have an audience.
If you are interested in more info on Super Chat, Merchandise, and Channel Memberships, YouTube has a site called creatoracademy.youtube.com/
Where they explain further. Keep in mind to enable these options you need to meet different criteria’s.
Ok lets dive into AdSense Revenue
WHAT IS CPM & HOW DOES IT RELATE & WHY DOES IT VARY
In order to understand Youtube and ad revenue we have to understand CPM. You may have heard this term everywhere but what does it mean and why does this rate have incredible fluctuations?
CPM stands for Clicks Per Mille, Mille being the Latin term for 1,000. And on Youtube its actually Views not clicks so CPM in general for YouTube is a bit confusing.
Basically, if you are accepted into the Youtube Partner Program, Google Ads start running on your videos. For every 1,000 views you will receive money. This money fluctuates based on time of year, type of video, and the audience that watches your channel.
You may have heard stories of Youtubers getting a Million views on a video but only making $100 this is because of many factors, but I will try my best to break this a part.
First just because your video receives a Million views does not mean that the ad or ads that were placed on that video were watched. Also, a million views coming from Pakistan are different than a million views coming from Australia, these countries have different buying power therefore advertiser pay more for Australian views than they do for Pakistan views.
To understand this further I am opening up my Youtube Analytics to give you insight into how CPM works on Youtube. I am looking at the lifetime of my channel, under Views which is 5,100,000 which are all the views across my channel, meaning this is the view count that all my videos together have created. Then under Estimated Monetized Playbacks it says 4,182,253 . This is the number of ads that people actually watched and this number is created by ads that are placed on my videos, keep in mind some videos have more ads in them than others based on how long the video is, so some videos may have 3 ads and others might have only 1, and then of the viewers who watch my videos some may choose to skip the ad.
If you are one of those people who skips ads, I don’t blame you, in fact I've done it myself, but please keep in mind if you value that creator they do not receive anything when you skip an ad.
So basically across my over 5 million views I probably have 12 million ads and only 4 million were watched. Which is roughly 30% which I believe is accurate for Youtube, no one is going to have 100% of their ads watched.
Now let’s look at my channels average CPM. This is an average of all of my videos together. That’s correct no two videos have the same CPM, some videos in my catalog have a CPM of $6.50 others are $15.13 and actually because of prepping for this podcast and digging deep into my analytics I found a video that has a CPM of $32.76 my highest CPM by far. My channels current average is $9.83, I am rounding this to $10 to help us in the math section.
Alright here we go we are doing math, not my strongest subject and you are listening to this so I hope you have a good imagination. Also I am rounding to help us all.
Let’s take my 4 million monetized playbacks and divide it by 1,000.
This equals 4,000
4,000 multiplied by my average CPM of $10 equals $40,000
Youtube takes 45%, I as the creator keep 55% so after Youtube takes their cut I receive $22,000 of the $40,000 my channel made in ad revenue.
I know what you are thinking, wait you only made $22,000 from Youtube ads, I thought you made $90,000? You are right I did make $90,000 this year from my YouTube channel but Youtube ad revenue only equated for 24% of this figure.
Also, keep in mind for a young channel like mine with not many subscribers, clearing $22,000 is a huge accomplishment.
I found an article entitled, Why ‘Success’ on YouTube Still Means a Life of Poverty
The article said that, 96.5 percent of all of those trying to become YouTubers won’t make enough money off of advertising to crack the U.S. poverty line, according to an analysis by Mathias Bärtl, a professor at Offenburg University of Applied Sciences.
Breaking into the top 3 percent of most-viewed channels could bring in advertising revenue of about $16,800 a year, Bärtl said. That’s a bit more than the U.S. federal poverty line of $12,140.
This article actually made me feel accomplished, because my channel was in the top 3% of revenue earning Youtube channels across all of Youtube, not just first year channels.
The online consensus seems to be that YouTubers earn between .35 to $5 per 1000 views. This is true because on my channel my CPM average is $10, and I really get half of this meaning on average I earn $5 per 1,000 views. I am on the highest end of the CPM range because of my audience, their age and where they reside.
This means that, 62% of my audience comes from the wealthiest countries in the world. Advertisers pay more to be in front of countries who have buying power. If your channel is getting all of its views from India, Brazil, Liberia, and Kazakhstan your CPM will be extremely low because advertisers don’t want to spend money advertising to those countries since they know the ROI is extremely low.
The age of my audience is also a key factor. 70% of the people who watch my channel are between the ages of 25 and 54, this person is an online shopper and can afford to buy things when ads pop up.
If my beauty channel was full of 15 year old teenagers, advertisers would not be interested in spending money because they know that the 15 year old does not have buying power, whereas the 37 year old who lives in the US or the UK watching my channel does.
This reminds me of something else I wanted to share. Last February I thought maybe I could make my channel grow quicker if I ran google ads to promote some videos, not necessarily a bad idea, but I didn’t know anything about google ads so I outsourced this to a Google Ads Specialist who I found on UpWork. We set a budget and he went to work getting me more views.
After 2 weeks I noticed I was getting a lot of comments from Indian men. I contacted my Google Ads Specialist and said why am I getting so much traffic from India. He responded that he was targeting my ads towards India since they have a huge population who watches videos. I then explained to him that this actually defeats the purpose of growing a lucrative channel. India is not my target audience. Yes they will watch my videos but India has a CPM of $1.27 I do not want to build an audience there because viewership from India will not yield profitable results. After this experience I stopped Google Ads. I share this with you just in case someone offers to get you a ton of views and traffic to your channel, pay attention to where those views are coming from if you want a higher CPM.
Since we are talking about CPM’s, a perfect parallel is this podcast, I add sponsors to this podcast, this way you get value from my content and they get advertising and I get compensated for sharing. Everyone benefits, and you were not charged anything for this exchange. The CPM or cost per 1,000 listens seems to be higher on podcasts, than on Youtube apparently in the $30-$45 range. I will let you know in the future how this adds up as this podcast gets going and I get more sponsors.
Here is my AdSense break down for January 2019 to December 2019
Starting at the beginning of 2019.
In January I earned $484
In February I earned $468 I would have earned more than January but remember February only has 28 days whereas January has 31, so my per day average for February was $17, whereas January’s per day average was $15.
In March I earned $676, the daily average was $22
In April I earned $721, the daily average was $24
In May my ad earnings double to $1580, which is a daily average of $51.
You guys when I hit $51 per day I thought I had made it, I was so excited! I uploaded 14 videos that month and I had 15,700 subscribers. Remember when I hit my first 1,000 subscribers in December? 5 months later with continued focus, video making, uploading and engaging with everyone who left me comments I had grown by a factor of 15.
Something weird also happened in the spring of 2019. For any of you who are into beauty on YouTube you may remember when Tati Westbrook and James Charles started fighting? I don’t really pay attention to all of the Tea that happens between creators on on YouTube, but their fight actually made me money. It wasn’t me making a commentary video on them, in fact I didn’t do anything. In January of 2019 I released a video reviewing Tati Westbrooks vitamins, Halo Beauty. I took them for 30 days, did before and afters and gave my thoughts, a pretty basic vitamin review video. I chose these vitamins over others to review because first I really liked Tati on YouTube but more than that she is very searchable so making a video reviewing her vitamins could be a very sought after video. On January 7 my Tati Westbrook Halo video launched. In its first 30 days it only received 3400 views so for my still very small channel it was very searchable but it wasn’t catching a ton of interest. Then around April & May Tati and James started talking publicly about their friendship, on May 10 my Halo video had 56,000 views so it was growing because of search and tags. But because of their online tangle all of a sudden my video shot up over night, between May 10 and May 20 my video went from 56K views to over 230K views. Because of their fight that month my 4 month old video was given new life, I gained 700 new subscribers from this video alone in May and made $350. For the year of 2019 this video made $510 and $350 of that was made in May.
I took a side tangent to explain this phenomena because if you set out to make videos on YouTube with the goal of making money, always think about its search factor. It may not do very well when you launch it but it may start to track in the future when something or someone starts trending and your video relates.
In June I made $1521, with a daily average of $51
In July I made $1514, with a daily average of $48
I started to get a bit nervous because in May I made $1580 and now in the Summer I am regressing, I assume others are traveling like me and are not watching as much Youtube. I also realize that although I’m still posting videos 3xs per week, my videos during the summer are mostly me traveling with my kids, because we spent a month in Europe in 2019. It’s apparent to me on my channel that people don’t watch my travel videos nearly as much as they watch my skincare videos and this effects ad revenue. But traveling and documenting our experiences is a passion for me and I always make my travel videos on topics that are searchable.
Ok, so I’m getting nervous that maybe $1500 a month on Youtube in AdSense is the best I can ever hope for. This is not necessarily bad, because $1500 per month equates to $18,000 per year, which is great because with AdSense alone, I’m in the top 3% of channels earning on YouTube and I’m above the US poverty line, these are all good things. Then August happens and I make $1610 which is $52 per day. Finally, its picking up again and we are back from traveling so now I can get to work making more skin care videos. The profitable ones:)
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What happens next still blows my mind. In September I earned $2600 from AdSense which is $84 per day. I honestly couldn’t believe it. Is this what everyone talks about? Have the advertisers come to spend money? Mind you I ended September with 32,000 Subscribers so I am still a small YouTuber. October completes at $2922 with a daily average of $94, I remember this because I was so close to breaking $3000 so my goal was to get over that hump in November.
Again, I hope this is not coming off like I think $1500 or $2900 is not a lot of money. It is and I am grateful for this amazing business model I’ve been able to now call my job. I get to be creative on topics I love, I am my own boss and I actually make money that benefits my family and allows me to put more money into my content creation. I work crazy hours for this, in fact, my husband thinks I work about 90 hours per week, so I hope my grind does pay off because I would like to be able to eventually hire some aspects of my work out so the burden isn’t so insane and that I don’t burn out.
Its November, do any of you have an idea on what I made? Im just over 40,000 subscribers, if you have an idea leave it in the comment, I would love to know if you think I cleared $3000.
I know the suspense its killing you… and to answer my own question, yes I did cross the $3000 mark, in fact I could never have anticipated my November with Adsense. I made $4,560 which is $147 per day. It was so rewarding to see the crazy handwork pay off like this, I felt so blessed. I also had my largest subscriber gain in November, 10,000 new friends found me and decided to subscribe.
December wrapped up the year with $4,050 which is $130 per day. I actually thought there might be a slip in December because when people are busy they can’t watch as much YouTube as they normally would. And people are most likely skipping more ads because they are in a hurry. But in the end, I had an incredible first year with Google AdSense totaling at $22,707. This is a monthly average of $1892 or a weekly sum of $473. I do think my time and effort are worth more than this but remember AdSense is just one aspect of my income pie.
I mentioned earlier that the time of year effects ad revenue, watching my first year these time frames are more apparent. The year is broken into quarters and because Christmas and holiday shopping 4th quarter: October, November and December, is the most lucrative time of year. Advertisers pay more for ads and bid higher to be seen.
Consequently, like all of us, they cut back in the First quarter on spending. So January February and March will be the lowest ad revenue months, then April, May, June, will be better, followed by July, August, September and then finally October, November and December will have much larger pay outs. The most drastic jumps in money I witness were between April to May, August to September, and October to November.
Now that I am in 2020 I will be able to compare year 1 to my future year 2 and see what ad and growth patterns I notice. I currently have 57,000 subscribers during the first week in January 2020 and I can already tell you I am averaging $148 per day, much better than the previous January of $15 per day. So even though the ad buy is lower for January I’m much bigger this year so I anticipate 2020 being a very good year, fingers crossed. I will just continue doing what I find works, making quality content 12-15 times per month, watching for new controversial and interesting skincare to share, and of course taking all of my subscribers on my world trips, In fact I leave for Korea at the end of January, this will be an incredible series of videos because I know my subscribers love Korean beauty products and procedures and I will be taking them with me to get these procedures done. So I am insanely excited for this trip and the only way I can afford it is because of my YouTube channel.
Phew this was a lot of numbers, we are going to conclude for this week and pick up next time with how I made the other $67,000 with Affiliate Marketing. Please leave a kind review, I promise you will make my day and I will see you in the next episode Affiliate Money.
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