I heard they make money through user clicks, I don’t remember giving any money to anyone. Is clicking ads like mining bitcoins?
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The companies in the advertisements make money, when people purchase their products or services. So, in order to increase sales, they advertise, and they are willing to pay for that.
For example, let’s say I sell widgets. I’m currently selling about 100 widgets per month, but I would like to sell more (and therefore make more money). So, I make up a video ad, and I pay a fee for that ad to be shown on YouTube 10,000 times. Only a small percentage of those people who saw my ads actually bought my widgets, but the advertising worked, and I’m now up to selling 175 widgets per month–the advertising cost paid off.
Now, YouTube took some of the money I gave them and shared it with people who uploaded videos that aired my ads. (If YouTube didn’t pay those people, then they wouldn’t have made and uploaded the videos, and then YouTube wouldn’t make any money at all.) But, the way YouTube pays it out is based on how many times somebody watched the ad–user clicks. So, the more popular the videos are, the more people that watch them, the more people that see the ads, and the more money the video creator makes. Because the more times people watch an ad, the more money YouTube gets paid by a company like mine to air the ad.
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