It’s no secret that content creators can make money on YouTube, but there is a lot of misinformation regarding how much money can be made and how it all works.
The YouTube monetization model is fairly complicated, and there are no easy routes to understanding it. The fastest path to getting all of the facts is to complete the YouTube Certification program. However, below you’ll find some basic information and links to some resources that can help to lay the foundation for your understanding of YouTube monetization.
YouTube charges advertisers a rate, called CPM, to display their ads on a video. CPM stands for cost-per-thousand impressions (where 'M' represents the Roman numeral for one thousand), meaning advertisers pay for each set of a thousand views of their ad, not views of your video. This is the most widely misunderstood element of monetizing on YouTube. CPM does not guarantee how many ads will display on your video, nor how many advertisers choose to advertise on your video.
CPMs vary greatly, but generally fall between $0.30 and $2.00.
Videos that are violent or otherwise in opposition to YouTube’s community guidelines do not generate ad revenue.
The view count displayed under a YouTube video does not factor into ad revenue. Ad revenue is based on a video’s ‘monetized playbacks’ which are often much fewer than the total view count.
Before the video owner sees any money, YouTube takes 45% of all ad revenue as its service fee for video hosting, ad sales, and infrastructure.
Key Takeaway: YouTube takes 45% of all ad revenue, and “most partners earn anywhere between $0.30 and $2.50 CPM…”
Key Takeaway: The three main components of the YouTube ecosystem are viewer, creator, and advertiser; there are many different kinds of ads on YouTube, and there are different costs associated with each.
Key Takeaway: “…YouTube isn’t some kind of cash cow waiting to be milked. Sure there are a handful of YouTubers making bookoo bucks, but they are the exception not the rule.”