If you’re trying to generate income through your YouTube channel, is it better to do sponsorships or affiliate links? What’s the difference?
Today I’m going to break it all down for you. First, I do want to say though, if you want to monetize your YouTube channel and become a full time YouTuber, you should not rely solely on the YouTube Partnership Program. That’s when YouTube places ads on your videos, and you get a cut of that ad revenue that they generate. Because YouTube can arbitrarily change their terms of service at any time, as we’ve recently seen, and your ad revenue could change overnight. So it’s really good to diversify your income streams through, let’s say, sponsorships or affiliates.
What Is The Difference Between Sponsorships and Affiliates?
So first, let’s talk about what the difference is between those two different income streams. In sponsorships, companies pay you a flat, pre-agreed upon rate to talk about their product or service in your video. And their goal by sponsoring you is because they want to reach your particular audience. Now, in affiliate marketing, you talk about a product or service on your channel for free. And then when people buy that product or service based on your recommendation, you get a commission, you get a cut of that sale.
Contract Or No Contract?
In a sponsorship deal, there’s usually a contract involved that lays out specific points about what each party is getting. How much are you being paid for this sponsorship? How long are you talking about that product in one of your videos? Does the sponsor get some sort of creative approval of the video before you post it? When are you going to post it? How are you getting paid? How fast are you getting paid? And how many revisions does the sponsor get if they do have some sort of creative control. All of these things are negotiated up front with a sponsor deal. And you might go back and forth with the sponsor on the terms of that contract.
In affiliate marketing, there are no contracts, and you probably have no contact at all with the maker of the product. What you need to do is enroll in their affiliate program. So you find a product you like and you want to talk about on your channel. I would just google you know, widget affiliate program. You’ll find their affiliate program and you apply. Now some of them have barriers to entry, they might want to look at your social media and see if you are approved for their program. Some of them they’ll just approve anyone, it really just depends on the company. Once you are approved in their affiliate program, you get a custom link from that product maker, and you put that link in your description box underneath your YouTube video. That link takes your audience directly to the actual website of that product where they can make purchases, but the website tracks that it came from your YouTube video. That’s how it tracks your commissions. Now, in your YouTube video, you don’t have to run your scripts by the product maker at all. You can say whatever you want about it and then you just post it on your own timeline and hope for some sales.
Pros And Cons
For sponsorships, the pros are revenue predictability, you know exactly how much you’re going to make for making this video before you even pick up the camera. And you can negotiate those rates. So you have a lot of control right up front before you post your YouTube video. The cons are that you might have to give up some of the creative process to your sponsor, they might have some certain language they want you to use, they might need to approve it before you post the video. So you’re definitely giving up a little bit of freedom. The other thing to know is that you need to have a significant number of subscribers before a company even wants to sponsor you. So your channel might not even really be eligible for sponsorships realistically.
For affiliate marketing, the pros are freedom and unlimited revenue. You don’t have to run your content by a sponsor when you do affiliate marketing, and you can make unlimited income over time. I make thousands of dollars a month with affiliate marketing for products that I actually like. The cons are that you’re kind of taking a gamble when you make a video with affiliate marketing. You’re making a video hoping people are gonna watch it and click that link below. So there’s a lot of speculation involved and it is a bit of a gamble with your time.
What Kind of Content?
For sponsorships, you want to be ready with a rate sheet. A rate sheet is a double sided sheet usually like a PDF that has a lot of information on it. The front page might have information about you, information about demographics of your audience on your YouTube channel, and then information about the reach that your channel has. On the flip side should be a menu of pricing for different things that you offer on your channel. So it could be a 10 second shout out or a 60 second commercial within one of your videos, or a whole designated video. Now, I would definitely recommend that you think long and hard before taking on a sponsorship deal. I didn’t get my first sponsorship until I had about 30,000 subscribers, and that’s very small in the world of sponsorship. So they weren’t really willing to pay me a lot of money and I understood that. But I took on the sponsorship deal anyway, because I liked the product, I liked the company and I just wanted to see what this world of sponsorships was about. But it was a lot of work and a lot of pressure working with the sponsor. So in the end, that particular deal, I would say, wasn’t quite worth my time because I felt like I gave up a lot of control and I had to have a lot of back and forth before I finished the video and the project and got paid. And for me, it wasn’t quite worth my time. But that is a personal decision you need to make. I would just recommend that you know your worth, don’t be afraid to walk away from any deal. Even if you’re excited that someone even wants to sponsor you, because your channel is growing and bigger deals are on the horizon.
For affiliate marketing, I would recommend that you be very sincere in your product demos or reviews. Even if you recommend a product, it’s okay to maybe discuss some of the shortcomings that you see with the product because that gives you great credibility, and it’ll give people more confidence in using your affiliate link to purchase that product. The other thing to look at is commission structures. Some companies pay a 4% commission and it may not be worth your time. So I would definitely look at all the terms before you agree to create a video as part of their affiliate program. Now if you want to know more about affiliate marketing, here on my website, JennJager.com, I have a whole course that I call the affiliate marketing playbook and it tells you everything you need to know about getting started with affiliate marketing, even what to do if you don’t like a product. So if you’re really interested in affiliate marketing, I would recommend you check that out.
So Which One Is Better?
So the big question, which one is better; sponsorships or affiliates? It kind of depends for each person, but in my opinion, I would say that at the size that my channel is now I’m not really attracting these like huge corporate sponsors that want to pay me a ton of money for sponsorships. So I’ve been really happy with using affiliate marketing for products that I actually really like and recommend to you guys. But I think maybe in the future if my channel does get bigger, I’ll be leaning more into sponsorships. I’ve still done a few sponsorship deals with brands that I actually genuinely like. I like the product, I like the team that I’m working with.
So sponsorships are still great. They’re a great income stream for your YouTube channel, but they have barriers to entry, so they might not be the right fit for everyone. You guys let me know in the comments. Do you prefer sponsorships or affiliates? I’m really interested to hear what everyone else thinks about these. Let me know in the comments!