There are countless ways to make money online. And for many creators, that’s the problem: the options are overwhelming.
Unfortunately, making money online isn’t as easy as some “gurus” try to make it seem.
Most channels or methods are simply get-rich-quick schemes in disguise.
With so many options for creators to monetize their audience, it’s hard to know where to start.
In this guide, we’ll guide you through the options and help you answer the ultimate question:
What’s the best way to make a living off of your passion?
Here are the best options right now and the pros and cons of each to help you decide on the best monetization strategy for you.
Creators aren’t happy with the current landscape
In 2017, Social Media Examiner commissioned a study to survey online creators and how they monetize their audiences.
It studied over 4,300 different online creators who work in the blogging, video and podcast space.
And what they found was quite shocking.
Let me break it down for you by each monetization option. First up, advertising.
The survey first asked respondents about their top ways to earn money and monetize their content/audience.
The number one format for monetization for creators online is currently advertising.
While “selling your own products” and consulting services were a close second and third, advertising still dominates the landscape for online content creators.
And it makes sense, right? Advertising is generally thought of to be easy. Especially on platforms like YouTube.
You simply fire up a new video and check the right boxes. Soon enough, you’re passively generating thousands in ad revenue.
But not so fast.
According to Wired, the majority of content creators on YouTube are smaller, niche-based channels with just a few thousand active subscribers. On average, they are likely only making $100 a month in advertising revenue.
The article cites Thomas Wagner as an example, who has over 4,000 active subscribers watching every video he posts, and barely makes enough to break even.
And recently, YouTube announced that they would favor larger channels that bring in millions of views on each and every video, generating millions in advertising income each year.
In fact, to even collect a dime in advertising revenue, YouTube now requires channels to have 4,000 hours of annual viewing time and over 1,000 subscribers
While that's obviously bad news for creators, it makes sense for a simple reason: money.
YouTube isn’t concerned with small fish when a few big channels are bringing in billions of combined views daily and generating unimaginable amounts of ad revenue.
Simply put, advertising to monetize your content is a dying game for creators who don’t have millions of fans.
This was reflected in the Social Media Examiner report, which found that the majority of creators are not satisfied with the revenue they are making:
Most creators aren’t satisfied, and YouTube is changing it’s monetization strategy to squeeze them further.
As a result, the top area where creators will invest more time and effort into is selling products:
Of course, that doesn’t mean that selling your own products is the only option.
Sponsorships and brand deals
Advertising can be a great option to monetize content if you’re one of the very select few creators that advertisers favor: the already rich and famous.
As we reviewed, unless you are a top creator on platforms like YouTube, you won’t make enough income.
Platforms give more support to larger channels and creators that bring in more money.
So, what about sponsorships and brand deals?
Everybody wants a sponsorship online. To be the next influencer who gets free products and a contract to promote companies and their products.
And it makes sense: the average mention of a single brand on Instagram can net over $300.
Currently, the top influencers with huge audiences are raking in up to $75,000 per post.
That would be a dream come true for most creators online.
Though for most creators without millions of readers, sponsor payouts are meager and unpredictable, and like ad networks, they put your income into the hands of someone else who can cut that revenue off at will.
Sure, you can try your hand at micro-influencing. Meaning you have a smaller but more targeted and loyal audience.
And this could be a useful approach for some creators.
But the biggest drawback is that your bottom line is out of your control. If a sponsor leaves, you’re left with nothing until you find the next one.
Sponsorships can be great, but they are challenging to acquire, especially the sponsors who write big checks.
According to SME’s study, sponsorships are one of the least revenue-producing monetization options:
Sponsors are only willing to pay so much for a smaller niche audience. Unless you are Kim Kardashian, you can’t expect to generate millions a year from sponsors alone.
Affiliate marketing has grown in popularity with places like Amazon allowing bloggers to use affiliate product links where they make a portion of each sale.
It’s a simple way to make money online.
First, you generate traffic and an audience. Next, you place affiliate links within your content.
For example, if you write a recipe blog, you could put affiliate links to the tools or products you use in your recipes. Then, hopefully your audience buys those tools through your link, and you make an easy profit.
Affiliate marketing has a proven track record.
In 2017 alone, retailers in the United States spent almost $5.5 billion on affiliate marketing.
eMarketer data shows that affiliate marketing spending will only continue to skyrocket, too.
Currently, 81% of brands and 84% of online publishers use affiliate style marketing.
And creators are making a fortune. For example, a single affiliate marketer, Jason Stone, generated $7 million in sales in a single year with affiliate revenue.
One challenge of affiliate marketing, however, is that you need to consistently bring in new traffic, as you can only place so many affiliate links.
Once your active, non-unique following has purchased from your links, you can’t keep selling them dozens of the same cooking materials.
Affiliate marketing can certainly be a healthy part of a monetization mix, but we recommend diversifying beyond this channel.
The Social Media Examiner study shows one fundamental shift in the mindset of creators.
Online creators are moving towards increasing the selling of their own products, putting revenue control in their own hands.
And that’s great news. Why? The e-learning(online course) market is absolutely booming. In fact, it’s supposed to reach $325 billion by 2025.
Marketers like Neil Patel are starting to tout the efficacy of online courses as a content monetization platform:
People want to learn more and more online than ever before.
And you don’t need decades of experience or expertise to get started.
With online courses, you can harness your own knowledge and specialized experience to sell courses to engaged fans and bring in new traffic.
It’s one of the best ways to create your own steady income that depends on you, not some sponsor who might pull the rug out from under you or ad networks that can demonetize you with the flip of a switch.
Don’t believe me?
A few years ago, two 27-year-olds made over one million dollars by launching an online course.
And they didn’t have a huge following, either.
John Omar and Eliot Arntz, two college roommates, banded together to drop Wall Street jobs and pick up coding.
Omar already had experience coding and was running his own app-development agency. Pulling Eliot into the mix, they started to teach people on the weekend how to code easy, simple iOS applications.
Looking to expand their audience, they spent three months and only $1,000 developing their course.
Charging $99 for the course, in a single month they generated $40,000 in revenue.
How did they (and how can you) build hype for your online course and drive traffic that wants to participate?
By following Omar’s advice:
Turning to good old-fashioned email.
"We literally emailed every person we knew in tech — from Eliot's General Assembly students to people who came to an iOS meetup we hosted, telling them that we built a course that would take absolute beginners and turn them into junior developers in about three months of learning. That's when we exploded.”
They generated $700,000 in revenue. Now they average $100,000 each month totaling over $1 million yearly from courses alone.
And the great thing about online courses is that they can be used as a stepping stone to more revenue streams and a passive income…