October 23, 2012

How do Youtube Beauty Gurus Make Money?

Many future gurus are curious how established beauty vloggers have turned a hobby into a full time job. Here are the standard ways Youtubers make money from their videos:

1. Adsense:

Adsense is a program developed by Google. Advertisers bid to have their ads run near or on a video. Google keeps a portion of the proceeds and passes a portion onto the content creator. Ads either stream before a video and must be watched in full or run near or on top of a video and must be clicked on to receive compensation.

In the past Youtubers had to be accepted into the Partner Program to be eligible for monetization, but the website has begun offering this opportunity to most anyone who uploads a video. Gurus can track their earnings through the Adsense dashboard. Once the account has reached a total of $100, Google will payout the total by the end of the following month.

2. Gifted/Gratis product:

Now, some will argue that this isn't getting paid, but at the very minimum it is a fringe benefit. Once a guru builds up a strong reputation online and has a large and interactive audience, it is likely that she (or he) will be contacted by companies and public relations firms and sent cosmetic samples to try. The hope is that the Youtuber will mention the products in a video which creates buzz and brand exposure. Some groups will send a sample to use and a sample to giveaway to viewers. It is expected that a guru place a FTC claim in the description to notify the audience that the items were gifted.

3. Sponsored:

This takes the gifted scenario up a notch. The Youtuber is actually paid to review a product in a video. Since this is just another form of advertising, it is expected that the company will have some say over the video's content. Gurus definitely have to indicated the sponsorship. It doesn't always have to be a beauty product. It could be a "shout-out" and a link to another channel who is trying to build an audience.

4. Affiliate Programs: 

Affiliate programs allow a guru to link to an item in an online store as a recommendation. If someone purchases something through the link, then the Youtuber receives a portion of the sale called a commission. There are many programs like this across the web, but one of the most popular is Amazon.

5. Blog Advertising: 

Many gurus have a blog along with their YT channel. The two really go hand-in-hand. They can include Adsense ads on the blog which are automatically placed there by Google. Or, they can sell their own ad space at their own monthly rates which guarantees a set amount of income.

6. Company Representative: 

Some of the more well-known gurus have partnered with online companies to become the "face" of a brand. Haulerdeals is an example of a company using this form of marketing. Each guru discusses the company and the products it sells on her channel and is paid for it. An example of this type of arrangement is Haulerdeals.

7. Open Online Store:

Some gurus open a store to sell items they have hand selected or have made. They may sell through Etsy or through a stand-alone website. They let their audience know when new items are available and urge them to check them out. They are responsible for the shipping and handling of these items.

Below is a video by nikkiphillippi discussing how she makes money through her YouTube channel:


October 17, 2012

How to make $1000 a month as a Youtube Beauty Guru

We all would love to make an extra money each month. Youtube is a great way to bring in a bit more cash, but understanding how much is really possible is important. Here is a quick math problem that will give you an idea of what it really takes to earn that kind of income.

Here are the basic assumptions:

1. All income is through Google Adsense and comes from advertising placed on or near your videos.
2. The click-through rate is 5%. Basically, we expect to have 1 out of every 20 viewers "click" on an ad. Since Youtube has pre-roll ads, viewers need to watch the entire ad and not click out to receive income. These count in the 5% as well.
3. The cost-per-click is $.10 (10 cents). This is an average, but appears to be an accurate amount. As a whole, beauty related videos receive a bit higher cpc because companies pay higher rates to target particular search terms. It is not unusual to see bids per click in the $1 range for terms such as makeup, etc.

So, let's get started. We need to hit $1000.

How much do we make per 1,000 views?

At $.10 a click and a 5% click through rate, you receive $5 for every 1,000 views.

1,000 views x .05 = 50 clicks; 50 clicks x .10 per click = $5

How many views overall do we need to make $1,000?

$1,000 / $5 = 200; 200 x 1,000 = 200,000 total views per month

How many videos do we need to make per month? Let's assume you do 3 per week or a total of 12 per month.

200,000 views / 12 videos = 16,666 views per video per month

How many subscribers do you need to have that many views per video?
We assume that you have an active subscriber group but not every subscriber is going to watch every video. We expect 20% of your subscribers watch each video or 1 out of 5.

16,666 / .2 = 83,330 subscribers or 85,000 to round it out

In summary: You need to make 12 videos a month and have 85,000 subscribers (5% click-through at $.10 per click)

Kind of eye opening, hunh?

Additional thoughts: I actually think these numbers are a bit high. I think you might reach $1,000 per month with less subscribers, but you are still going to need quite a few. Videos are watched by non-subscribers which drive that number down.

No one can tell you exactly what they make from Adsense because it is against the TOS, but you can come up with projections and assumptions that are reasonable. I think these numbers are reasonable.

Youtubers who make a living online have other ways to earn an income outside of Adsense.

What do you think? Leave a comment below.

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