The online space is the new goldmine. With content creators like Mr. Beast earning over $82 million annually through content creation, it’s a no-brainer that more people are increasingly gaining interest in this venture.
If you’ve been considering joining the ever-increasing list of over 200 million global creators, you must have come across Twitch. Founded in 2011, the platform prides itself on a steady flow of over 7.9 million monthly streamers.
By any standard, this is pretty impressive. However, its greatest selling point is the earning potential it gives creators through ads. So, how much does a Twitch streamer earn per ad? How do Twitch ads work? Which factors affect your earnings? And how can you estimate your pay?
Read on for detailed answers to these and several other related questions.
Twitch Advertising Basics
Before delving into the intricacies of estimating Twitch Ad earnings, let’s review the basics.
What are Twitch ads?
As the name aptly suggests, Twitch ads are paid advertisements that appear on live streams. They usually come before (pre-roll ads) or during (mid-roll ads) streams.
For streamers, they can be a lucrative revenue source. Generally, Twitch pays streamers 55% of all ad revenue their channel generates.
Advertising payment models
Initially, Twitch paid streamers a fixed amount per 1,000 views. Popularly known as CPM, cost per mile (using the Roman numeral M for 1,000), this model paid streamers $2 – $10 for every 1,000 ad views on their streams.
Later in early 2022, the platform introduced what it calls a “reliable ad revenue” model. This model came with the Ads Manager tool and the Ads Incentive program (AIP), both of which are exclusively available to Twitch Partners (we’ll explain more about Twitch Partner and Affiliate Programs later).
How does it work? Well, each month, the partners get offers on the hours they should stream and the ad density on their streams. For instance, you can negotiate a $200 incentive for four minutes of ads/hour and agree to stream 80 hours for the month.
Your role as creator is to meet the allocated streaming hours. The ad manager then places and manages the ads and Twitch processes your payment automatically at the end of the month.
According to Twitch, “this change represents a 50-150% ad pay rate increase for the vast majority of creators.” The platform also maintains that “this new model pays creators 55% of the revenue for each ad that runs on their stream.”
Does the upgrade also cover Twitch Affiliates? Yes, it does. While affiliates cannot access the incentive program, they still get 55% of the revenue ads generate on their streams. So, everybody is covered.
Factors Influencing Ad Earnings
If you’re a partner who has enrolled in the Ads Incentive Program, you’ll agree on the payment in advance. So, your earnings might not vary that much, as long as you meet the prerequisites.
However, for affiliates and other creators, your pay (55% of the ad revenue of your content) will vary, based on the following factors:
- Ad viewer count: How many people joining your stream view the paid ads? The more ad views you get, the higher your earnings.
- Stream length and engagement: The longer your stream is, the more ads it’ll have. If you can manage to keep your viewers engaged throughout this period, you can get more ad views without disrupting viewership.
- Number of subscribers: One of the benefits of Twitch subscriptions is enjoying ad-free viewership. As a result, the more subscribers you have in your streams, the less ad revenue you’ll generate.
- Location: While the new model gives every streamer 55% of the ad revenue their content generates, regardless of your location, Ad rates often vary depending on viewers’ locations. For instance, marketers often pay more for ads targeting viewers in the U.S., leading to higher revenue for streamers with predominantly US-based audiences.
Twitch Partner and Affiliate Program Earnings
While both Partners and Affiliates earn about 55% of the ad revenue from their streams, only Partners can join the Ads Incentive program. Similarly, the prerequisites for attaining both levels vary.
| Twitch Affiliates | Twitch Partners |
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Detailed Ad Revenue Calculation
With the new model, you can calculate your earnings using this formula:
Ad Revenue = 55% (Cost per View x Number of Views)
Suppose you got 1,000 views in an ad that pays $0.04 per view. In that case, your earnings will be 55% ($0.04 x 1000) = $22.
Additional Revenue Streams
Besides ads, you can also consider the following Twitch revenue streams:
- Subscriptions & emotes: Twitch Affiliates and Partners can unlock up to 20 and 50 emotes, respectively. Emotes are customizable emojis that you can gift to your subscribed viewers. Typically, subscriptions come in 3 tiers—$5.99, $9.99, and $24.99—and channel owners get 55%.
- Bits: When your viewers buy these virtual goods, you earn about 1 cent per Bit.
- Sponsorships: After amassing a significant following and engagement, brands can offer to sponsor your streams in exchange for mentions or product placements in your content.
Challenges and Considerations
Top-tier Twitch streamers earn about $100,000 – $200,000 per month. However, before reaching this level, you must put in the work and build your brand. When starting, this might seem intimidating.
However, with dedication and consistency, you’ll soon start seeing gradual improvements. A few tips you can use to expedite your growth include:
- Focus on creating content that resonates with your target audience
- Pick popular games with huge followings
- Always remind your viewers to follow your channels and enable notifications
- Promote your channel and upcoming streams on other social media platforms
Conclusion
Twitch can be a lucrative venture. All you need to do is to find your niche and meet your target audience’s needs. Content is key. Above all, consistency beats talent. The more frequently you stream, the faster you’ll amass a considerable following. All the best!