- Many YouTube creators have experienced a decline in direct-ad-revenue rates from the platform in recent weeks, likely because of shifting ad budgets amid the coronavirus pandemic.
- YouTube creators are paid a certain rate for every 1,000 views, which varies depending on a variety of factors.
- Michael Groth, a YouTube creator with 1 million subscribers, told Business Insider that his channel typically earns between $9 and $12 for every 1,000 views, but so far this month he has been earning about $5, according to a screenshot viewed by Business Insider.
- We spoke with several creators on how their average rates have changed and how they are adapting their digital businesses.
- Visit Business Insider’s homepage for more stories.
The influencer business has changed dramatically during the coronavirus pandemic, and as advertisers pull campaigns and lower budgets, many YouTube creators have experienced a double-digit decline in ad-revenue rates on the platform.
Michael Groth, a YouTube creator with 1 million subscribers, told Business Insider that the average rate YouTube paid him began dropping sharply at the end of March.
Groth films Pokémon-related videos and scripted content for his YouTube channel MandJTV. He posts videos about twice a week and films them from the studio in his house.
YouTube creators are paid a certain rate for every 1,000 views, which is called the CPM rate. Creators keep about half of the CPM listed on their analytics page, Groth said.
Normally, Groth’s YouTube channel earns between $9 and $12 for every 1,000 views, he said. But by the end of March, his CPM rate dropped to $6, and so far this month he has been earning about $5, according to a screenshot viewed by Business Insider.
Ad revenue earned directly from the platform through Google-placed ads is a main source of revenue for many creators. These ads are filtered by Google, and the rate YouTube pays creators depends on a number of factors, from content to audience demographic.
“I thankfully am a large enough channel that this doesn’t financially break me, and I’m not worried about not being able to pay rent and stuff like that,” he said. “But it’s obviously not fun to see, and I worry about smaller creators.”
Groth isn’t the only creator who has seen a decline in his YouTube ad-revenue rate.
Hank Green — the cocreator of several popular YouTube channels like Crash Course (10.7 million subscribers), SciShow (6.2 million subscribers), and Vlogbrothers (3.3 million subscribers) — started a Twitter thread on April 15 asking YouTube creators to share their CPM rates from the past 28 days. The thread received dozens of responses, and Hank shared that over the past 28 days, his network’s average CPM rate was down by 28%, earning $4.75 per every 1,000 views.
Marko Zlatic, a personal-finance YouTube creator with 345,000 subscribers, told Business Insider that his CPM had declined by over 30% over the past three weeks. And Preston Arsement, who has 12 million subscribers on his main YouTube channel and runs nine others, recently told Business Insider that his CPM had dropped over 50% since the coronavirus pandemic began.
For some creators, a decline in rates has come with a surge in views. But even so, creators who spoke with Business Insider said they were generally earning less money.
Groth said the overall 50% drop in his CPM rate corresponded directly to a drop in total earnings of about half. His overall views have been consistent over the past few weeks, he said.
For some YouTube creators, direct ad revenue is their only consistent income stream
YouTube creators like Groth can earn money in a number of ways, including direct-to-consumer sales and brand sponsorships. But for many, direct YouTube revenue makes up a big chunk of their income.
Groth started his channel as a hobby in 2009 when he was 14 years old. He began focusing on YouTube full time three years ago, after he graduated from college, and he said the revenue he was earning directly from YouTube allowed him the freedom to do so.
His videos are never demonetized because his content is appropriate for all audiences and he doesn’t use copyrighted music, he said. Because of this, Groth has always relied on a steady stream of income directly from YouTube, he said. That revenue, which comes from Google’s AdSense program, has been his only consistent income stream, as both brand deals and merch sales come in waves for him throughout the year, depending on when he partners with brands or drops new clothing collections through the e-commerce platform Teespring.
“I’ve known for a while that YouTube AdSense can do crazy stuff like this,” Groth said. “I’ve made efforts to diversify over the years. My diversification has never surpassed my YouTube AdSense earnings because my AdSense earnings have been pretty healthy, but that may change now.”
For smaller YouTube creators, the drop could have a more significant impact on their careers.
The 17-year-old YouTuber known as Thomas Game Docs (150,000 subscribers) said the recent drop in revenue had caused him to start thinking about new ways to expand his business. He started his YouTube channel in 2018 and was hoping to focus on his channel full time this fall, he said. But with his recent changes in revenue, he’s uncertain if he’ll be able to do that without finding additional ways to make money.
Thomas films game-history videos for his channel, and his average CPM rate has dropped to about $3 in the past 28 days, he said. Looking at his channel’s history, his average rate was about $5 before the pandemic.
Views and engagement are spiking on YouTube, and creators are using this time to reach new audiences
Some YouTube creators are taking this time to reach more people and establish a larger audience, which they can capitalize on once rates return to normal.
YouTube has seen a 20 to 30% increase in views and engagement, according to the social-media-marketing platform MediaKix.
Austin Hargrave, who runs the YouTube channel Peanut Butter Gamer (2 million subscribers), said he’s been streaming more on Twitch and seen an increase of about 30% in views on both his YouTube channel and his streams.
Arsement said his viewership almost doubled last month, from 310 million views in February to 550 million views by the end of March. Even the channels he hadn’t uploaded new content to were seeing a spike in views, he said.
“I think diversifying the content and allowing it to be more evergreen so anybody in the household can find it entertaining is a solid strategy,” he said. “Not only do you appeal to more brands at that point but also more members of the household.”
Views on Zlatic’s personal-finance channel Whiteboard Finance have spiked, he said, specifically on videos about the market, stimulus packages, and the Federal Reserve.
For some creators, merchandise sales have made up for a loss in ad revenue
As influencer-marketing campaigns get put on hold and ad rates drop, some creators have begun focusing on different categories of content and long-term bets, like direct-to-consumer businesses.
Arsement said merchandise sales have made up for his loss in ad revenue, nearly tripling in March. He runs his merch business in-house and has a warehouse from which he ships T-shirts, hoodies, and other branded accessories that he sells online through the e-commerce platform Shopify.
As more people seek at-home-workout alternatives amid the coronavirus pandemic, fitness influencers on Instagram and YouTube have seen a spike in engagement and direct-to-consumer sales. These membership-based programs don’t require fancy equipment and are offered in the form of an app or virtual program.
“It’s a weird feeling when people ask us how the business is doing,” said Ryan Dunlop, the chief operating officer and cofounder of Love Sweat Fitness, which had seen a surge in DTC sales. “It’s a weird thing to say, ‘Actually it’s doing great.’ It’s awful what is going on, and I think our only intention was to try to find out ways we could help.”
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For more on the business of influencers, check out these Business Insider Prime posts:
- Inside the rise of Fanjoy, from selling music T-shirts to dominating influencer merchandise with YouTube star clients like David Dobrik and Jake Paul: Fanjoy is one of the top influencer-merchandise companies, creating products for digital stars like David Dobrik, Tana Mongeau, and Adelaine Morin.
TikTok star Addison Rae describes her rise to 33 million followers, from dancing competitively at 6 years old to catching Mariah Carey’s attention: Easterling spoke with Business Insider about her rapid success online and how she is building a larger business with merchandise and lucrative brand partnerships.
How a YouTube star making an estimated $14 million per year has adapted his business in recent weeks, as ad rates drop by over 50% but merch sales nearly triple: Preston Arsement is the CEO of the digital-media studio TBNR, which all started from filming gaming videos in his bedroom.
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