Why MrBeast Learned That Ads Are NOT The Way To Monetize For The Long Term

0:00All right. So here's why Mr. Beast learned that ads are not the way to monetize for the long term. So I wanted to share. Actually, this is a podcast podcast that I was watching. And he was talking about how he might get paid$3,$4,$5 million for a video, which is a lot of money. And he might get 100, 200, 300 million views or so. And what he's realizing is for the 200, 300, 400 million views, just for some context here, the Super Bowl gets about 115 million views or so. And his videos are getting 300, 400 million. Now, that's not apples to apples necessarily. We could talk about why that is in a second.

0:33But his justification is that he should be paid maybe$10 million per video or so. And he's realizing that brands aren't willing to pay that. And so if they're not willing to pay that, then he should start to think about his own brands, his own stuff, right? Which is kind of what we talked about before when we talked about him advertising his own brand Feastables in one of his videos, which is his yacht video, which is one of his all-time best performers. At the end of the day, if someone's advertising on your guys' videos, your website, social media, typically if you continually get people to advertise, they're making more money from your audience than you are.

1:10The better option is to make money by selling your own products and services versus taking the other approach of just selling ads. And again, if you don't want to build your own product and service, nothing wrong with ads, but you'll make way more money from the concept of, hey, let me go monetize a product and service versus selling other people's ads. And when people buy ads from me on a consistent basis, it's typically because they're making a profit. Yep. Look, business is a game on margins, right? It's all about margins at the end of the day. And so if someone's running ads on your stuff, they're probably making 3, 5, 10x, maybe 20x on their return.

1:48And they're making a killing on it. Obviously, they're investing because they think they're going to get a better return on their investment. And so when we have an enterprise like Microsoft advertise on this podcast, as an example, their lifetime value of a customer is way higher. Their customers are going to stay for years and years and years. They just don't really care. And maybe that's why they're one of the easiest advertisers to work with. Whereas when you work with, I don't know, we'll just use them as an example, right? Now, if you are, let's go back to Mr. Beast as an example. He's like, okay, well, if I'm not going to make a lot of money from ads, then I'm just going to sell Feastables.

2:21I'm going to sell new products because I have a mass market audience. I think he has over 400 million subscribers across his channels. Well, then I'm going to do that. And then I'm going to take all the profits from that and just reinvest it into making the best videos again, which is his number one mission, right? And you're seeing more and more creators do this now. We've talked about Logan Paul. We talked a lot about Mr. Beast. We've kind of done this to death a little bit, right? But I continue to think that this is where things are going. You lead with audience first, and then you figure out the business model afterwards.

2:49and ads are a great way to get started. That's how a lot of these creators got started in the beginning, but it's not necessarily a way to build for the long-term, especially if you want to have really big home runs. Yeah, and if you can't figure out how to release a product in the short run, an option is A, take ad revenue in the short run and eventually transition, or a better option is take someone else's product and services, white label them, see what's working well with your audience. Once you find the right products and services that resonate really well, then go create your own products and services so you don't have to white label someone else's and your margins increase.

3:26You know, there's that, we talked about this Linktree Creator Report. You can Google this, but Linktree Creator Report, it talked about how a lot of creators, a lot of them have multiple different ways of monetizing. So ads is one. Affiliate products was the one that Neil just talked about where you're promoting other people's products. And then selling their own physical products. And then selling courses as well. So people that are full-time creators, about 13 % of them actually make courses. And there's a handful of other things that you can sell a newsletter as well. You can sell sponsorships in your newsletter.

3:54You can sell a paid subscription to your newsletter as well. So there's a lot of different ways to do it. The key thing here is when you're starting out, focus on building a nice audience that loves you, that knows, likes, and trusts you in the beginning. Then you can think about the first monetization engine, and then you can start to compound for the long term. But we always like to say on this podcast, it takes about three years to build something for the long term. And that means for building an audience or building a business. Yep. So that's it for this episode. Make sure you rate review this podcast episode.

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