YouTube Advertising: Partner Revenue Terms & How Advertisers are Charged

We constantly get asked questions on this subject, so it’s time to clear some things up about ads on YouTube and how creators can earn money from monetizing their content. I hope.

I say I hope because all of the information I’ve gathered is scattered across different support forums and articles, and either YouTube has remained intentionally vague about ways to earn from ads , or it truly believes there is no reason to clarify the payment methods because the terms are clear enough within partner contracts. Yet saying there is some confusion among partners would be an understatement. There seems to be a reality that exists among advertisers and some misconceptions or myths that creators believe about how they get paid on YouTube.

YouTube Ads: New Pause on Click Feature

First let me preface this article with a change that occurred on YouTube lately that really spawned this entire discussion. For about as long as I can remember, YouTube videos on desktop and mobile have always paused on click. When you click on the video, it pauses. It’s sort of ingrained in my personal habit to open a video and click, mostly because I used to open dozens of interesting videos and pause them all while they all buffered.

Despite the fact that clicking pre-roll used to take you to the advertised site and buffering videos no longer exist in the same way (without an add-on) I can’t help myself but follow old habits. The interesting switch is that YouTube has changed both TrueView and non-skippable pre-rolls to pause on click, just like the video, instead of taking you to the advertised site. Now there is a small interactive card that links to the advertised site that you have to intentionally click. See below for an example of this:

I love this change. Mostly because my old habits can resume uninterrupted, but also because it helps advertisers. On one hand they lose out on the random traffic that would follow their links, but on the other hand that traffic should now have much higher conversion rates as they are now following the link on purpose. Also, if there is any truth to the myth that pre-roll ads pay more/advertisers get charged more on clicks, the likelihood of accidental clicks should go way down, saving advertisers more money and allowing them to put more faith in the truth behind their metrics.

How Advertisers are Charged on YouTube

So all that being said, here’s where it gets interesting. There are very simply two ways that advertisers get charged on YouTube (cost-per-view or cost-per-click) and I really found no disagreement from anyone:

However, creators themselves have a vastly different opinion on how they get paid. I’m not sure if that’s because their contracts are vague, or perhaps their Adsense or network is equally as vague. But the point is, most YouTube partners I surveyed either didn’t know, or firmly believed that when a pre-roll ad of any type was clicked, they received some sort of increased earnings. One thought they got a “bonus”. Another thought it would make a TrueView ad count as being completed. Yet another thought that TrueView ads paid a percentage of the full amount based on the length of the ad watched.

Of all the partners I spoke with, none seemed to have a firm grasp on what my research shows as the reality of the situation. The reality is that partners should get paid in the same manner that advertisers are being charged. Which means there is no magical click bonus to be had of any sort for pre-rolls of any type. What makes this even harder for me to grasp is that not only did I believe there was a bonus based on my experiences as a small-time YouTube partner, but of the people I talked with no less than 3 do this for a living and one has nearly 3 million subscribers! Here is the feedback I received when I asked whether partners believed they received more revenue when the viewer actually clicked on an ad:

  • Anonymous MCN Rep: “No, clicking does nada – and we should not encourage “fake” clicking. (TrueView ads) The advertiser is billed (and thus talent gets $) only if the ad is not skipped – but again, nothing to do with clicking”
  • Anonymous Partner #1: “I believe you get paid more on the clicks and I think you get a better portion of the revenue if people actually watch the ad.”
  • Anonymous Partner #2: “I honestly do not know. If you find out please let me know.”
  • Anonymous Partner #3: “You get paid more if they are clicked on. TrueView ads get paid more the longer they are watched I think.”
  • Anonymous Partner #4: “You get paid on a click, or you get paid after viewing 20% of the ad.”
  • Anonymous Partner #5: “Haha! I wish I knew!”

Despite all my research and no clear facts that support pre-rolls of any type paying more on click, I still believe. Old habits die hard. Unfortunately there is no concrete data to support that anywhere, just rumors and myths on message and chat boards. Maybe I missed some point when it all changed or maybe my perception never matched reality. But the lesson here for creators and marketers is that YouTube really wants you to focus on making engaging content and not worry about how you make money, it’ll just magically happen.

Let us know your thoughts in the comments below.