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If you are into YouTube looking out for ways to monetize your content there are 2 key metrics you must get familiar with: CPM and RPM.
Cost Per Mille (CPM) is the metric used to show how much advertisers are willing to pay for 1,000 ad views. Revenue Per Mille (RPM) is the metric used to show how much the youtuber makes after 1,000 views.
You are probably thinking that it makes no sense because they seem to address the same things. However, CPM represents advertiser spending, not what creators earn. There are multiple variables to consider that make the difference between what brands pay and the money youtubers make at the end of the day.
In this article we’ll address each one of them so you can get a clear picture and start your monetization journey on YouTube!
There are 2 key metrics you need to take into account to understand the way YouTube’s monetization system works and how it affects your total earnings.
The difference between CPM and RPM is that CPM stands for advertiser spending for 1,000 ad views and RPM stands for the creator's earnings for 1,000 views. Essentially, CPM is the cost to the advertiser, while RPM is the revenue to the publisher.
CPM is a metric focused on the amount advertisers are willing to pay to showcase their products or services on YouTube. There’s also the Playback based CPM that reflects how much advertisers are willing to pay for 1,000 video playbacks where at least one ad was displayed.
CPM considers every ad impression, including multiple ads in the same video. Playback based CPM is focused on views only in videos where ads were displayed.
How do advertisers get to buy ad spaces? YouTube holds its own Monetization System based on two pillars: YouTube Partner Program and Google AdSense.
To make money on YouTube you must join the YouTube Partner Program, it is a mandatory requirement if you want to monetize your content.
You can apply to the program on YouTube Studio. Your channel must meet the following milestones:
Lots of creators make money on YouTube through AdSense, a Google advertisement program that allows youtubers to make money based on the ads shown in their videos.
AdSense connects advertisers with creator’s content. The brands or advertisers buy ad placements through auctions using different bidding strategies.
RPM is a metric that shows how much the creator earns for 1,000 views, including different revenue sources available on the platform, besides Ad revenue and YouTube Premium Revenue.
YouTube offers a premium subscription for a monthly fee that allows viewers to enjoy content without being exposed to ads. When Premium members watch and interact with your content, YouTube pays you a share of the subscription revenue. Typically the amount ranges from $1 - $3 per 1,000 views with it varies a lot considering watch time and engagement rate.
Viewers have the possibility to pay a monthly fee to support their favourite creators and, in exchange, enjoy exclusive access to brand new content. Memberships range from $ 1.99 to $49.99 a month, the most common one being $4.99. YouTube gets a $30 cut on all channel memberships.
Two monetization features that allow viewers to support their favorite creators during live streams. Fans pay to highlight their messages during live streams. The higher the price, the longer their comment stands out. The average Super Chat donation ranges from $5 to $20 and YouTube takes a 30% cut from Super Chats and Super Stickers.
CPM stands for what advertisers pay for 1,000 ad impressions meaning that it shows how much your channel makes on average for 1,000 monetized views.
With an approximate CPM you can make from $1 to $9 on YouTube. Let’s break these numbers a little bit with some examples! One of your videos got 1,000 views. Typically 60% of your total views are also ad impressions, so let´s say you got 600 ad views. The average CPM brands are paying to showcase their products on your videos ranges from $2 to $15.
With 1,000 views and this CPM as reference, you can be making from $1.5 to $9 over 1,000 views. However, this is before YouTube's 45% cut!
Although this scenario is real, we know that with 1,000 views on YouTube you can make much more money! Does that mean that there is something wrong with the metrics we used? Not at all! This is a reminder of the multiple factors determining your final revenue as a youtuber.
It may take time to get to know all of them, but once you do, you’ll be able to elaborate the best strategy for your channel. If you want to learn more, you can always check out our article and find out more YouTube Monetization Metrics to Keep in Mind!
YouTube CPM is going to be determined by how much money advertisers are willing to pay for a specific ad space on different videos. The average CPM ranges between $2 to $25 every 1,000 ad impressions.
The type of content you are working with it's going to be crucial for understanding your CPM. If you are working in the lower paying niches like gaming or entertainment you can make $5 for 1,000 ad views. On the other hand, if you create quality content for a higher paying niche like finance or digital marketing you can make up to $25 per 1,000 views.
To estimate an approximate CPM you need to consider factors such as niche, content type, audience location, seasonality and the advertiser demand. Niche and content type are key to linking your videos to specific brands or products. Location is also a factor because depending on different countries, different possibilities of purchase. Ad demand and seasonality could increase your CPM if multiple brands are bidding for the same space at the same time.
You can access your CPM information in YouTube Analytics. Once you are logged in, go to YouTube Studio and select the “Analytics” option. Then you click on “Revenue” and you’ll be able to access your specific data.
You can use different filters to know your exact CPM at a certain time and date. By doing so, you can compare different periods or videos and see what kind of content is performing better in terms of ad revenue.
RPM stands for the actual amount creators earn per 1,000 video views, after YouTube takes its revenue cut, and considers other income streams in the platform.
For 1,000 views you can earn from $2 up to $15. But estimating your RPM is a little bit tricky as there are multiple factors determining your final revenue. Let’s break it down with some examples!
The first thing you need to know to calculate your RPM is that YouTube holds a share revenue model where creators get to keep 55% of the total earnings and the 45% left goes to YouTube to maintain the platform up to date.
Let’s keep up with the previous example to get an even clearer picture! You got 1,000 views, 600 ad impressions and the CPM ranges from $2 - $15.
With this CPM as reference, you can actually make $0.66 to $4.95 over 1,000 views. However, this is only considering ad revenue. RPM also includes other monetization ways that may increase or decrease the total amount of money you get monthly from 1,000 views.
But estimating your RPM monthly earnings is a little bit trickier than that! It’s not just applying the 45% cut, but also including the revenue you can make with other income streams like channel memberships, SuperChats and YouTube Premium share.
Your Total Views are the amount of ad revenue you get after the 45% cut plus the money you make from SuperChats, Channel Memberships and Premium Revenue.
Let’s continue with our previous example of 1,000 views, $15 CPM and a $4.95 revenue after Youtube’s cut. Added to that, $5 on SuperChats (after 30% cut), $3 on memberships (after Youtube’s cut) and $2 on YouTube Premium Revenue.
RPM can be higher or lower than CPM, depending on the creator’s monetization strategies. If you only count on ad revenue your total earnings can be so much lower than if you were to include different tools available on the platform to make money out of your content.
The average RPM on YouTube can be $2 for 1,000 views in the lower paying niches like gaming or entertainment. On the other hand, if you create quality content for a higher paying niche like finance or digital marketing you can make up to $25 per 1,000 views.
Similar to CPM, the type of content you are working with it's going to be an influencing factor for understanding your RPM. If you are working in the lower paying niches like gaming or entertainment you can make $2 for 1,000 views. On the other hand, if you create quality content for a higher paying niche like finance or digital marketing you can make up to $25 per 1,000 views.
However, a good RPM on YouTube contemplates different monetization methods creators have access to, like SuperChats, Memberships, and YouTube Premium Revenue, in order to increase their total RPM and their final earnings. The more ways you explore to increase your income, the higher your RPM is going to be.
You can access your RPM information in YouTube Analytics. Once you are logged in, go to YouTube Studio and select the “Analytics” option. Then you click on “Revenue” and you’ll be able to access your specific data.
You can use different filters to know your exact RPM at a certain time and date. By doing so, you can compare different periods or videos and see what kind of content is performing better in terms of ad revenue.
CPM and RPM are important metrics for YouTube creators and advertisers that relate to revenue generation on the platform. To maximize your earning potential as a youtuber you must get to know both of them as well as the many factors influencing their value and therefore your final monthly revenue.
Making money online is a very popular niche with an average CPM of $13.50, one of the highest on the platform. With 1,000 ad views, you can get $7.50 after YouTube's revenue cut. On the other hand, continent in the lifestyle niche deals with a much lower CPM ($3.50) making the total earnings from 1,000 ad views around $2.
The niche you are working in and the type of content you are creating is a key factor to understand what type of audience you have and the type of brands interested in your audience. To keep it simple: the higher the price of whatever the brand is advertising on the ad, the higher the amount they are willing to pay for that ad space. Why? Because if they get just a couple purchases done, they can get their money back.
Working in top niches like Digital Marketing or Finance guarantees a higher CPM because brands interested in that topic, are probably going to spend more money on ad budget.
Quick note: The estimated RPM value is only considering YouTube’s revenue share. Other monetization methods are not included in the estimation.
If you are a Finance expert youtuber you can have a $12.50 CPM and make $7.50 for 1,000 views.
If you are working in the Fashion and Beauty industry, your CPM is going to be lower, $3, making only $1.65 after 1,000 views.
Audience demand is a key determinant factor for your final revenue. However, always keep in mind that ad revenue it’s not the only thing you can pursue for making money on YouTube. There are plenty of monetization opportunities you can do to increase your RPM and final earnings.
Different countries hold different CPM and RPM averages. This is mainly because in places with better economies, the higher advertiser competition and the higher power of purchase.
Quick note: The estimated RPM value is only considering YouTube’s revenue share. Other monetization methods are not included in the estimation.
The US is one of the countries with the most daily users on YouTube. If your main audience is northamerican, you can achieve a $12 CPM making $6.60 after 1,000 views.
Australia's strong economy attracts high advertiser demand. With 1,000 views and a $10 CPM you can be making $5.50.
The higher your CPM and RPM, the higher your earnings. Here are 10 key factors to consider while creating your channel to increase your revenue.
Building an engaged audience it’s not just about the numbers. The key is to attract viewers that genuinely connect with your content. When people like your content, they are more likely to interact with the ads displayed on it, getting your CPM higher.
Another good way to attract a higher CPM is making sure you have an audience living in the best paying countries. People from The US, The UK, Canada and Australia have high purchasing power and brands pick on that. Advertisers are willing to pay more because the odds are that these people are more likely to actually make a purchase. The more profit the brands can make, the more they are willing to pay.
The niche you work in is also going to affect your earnings. There are lots of niches with higher CPM’s because of the brands pushing to advertise specifically on one video because it really goes along with what they are trying to sell.
Make sure your content is ad friendly. There is a set of YouTube Guidelines for your content aimed to make YouTube a safer community. Videos with violence, inappropriate words, misleading content, controversial topics or spam are not allowed. If you violate any of them, they're probably going to be brands not wanting your ad space, and YouTube itself can demonetize your channel, lowering your CPM as a result.
Work on 8 minutes or longer videos so you increase your ad capacity. For longer videos there's the possibility to include mid-roll ads elevating the amount of brands that can advertise in only one of your videos.
You need to work on an Ad Placement Strategy, this is figuring out the best place to place your ad breaks. Look at your video statistics and find the moments with higher viewer’s retention. By doing this, and avoiding the automatic placing function, you increase your chances of viewers staying in your video until the ad is shown.
Go to your analytics and find the individual videos with higher CPM & RPM and figure out why your earnings were better. Make more similar content to attract more viewers and advertisers willing to pay higher rates. Take note of your best earners and make more content like that!
Add up live hours so viewers can support your content with Super Chats and Stickers during your live sessions.
Don’t be shy and encourage your viewers to join your channel as members. If you create good content that they enjoy, chances are they are going to be more than willing to support you and your work. Besides, it empowers the community feeling making your engagement higher, which also contributes to a better CPM.
Search what people are searching for and make videos about it. You can try Google Trends to decide which type of content is going to have higher search interest. This way you can create content based on your viewers interests, contributing to a higher engagement and CPM.
Find ways to keep your viewers interested in your content. Become a master of hooks. How? You can ask a question your viewers are likely to want to know the answer and then talk in a way that keeps them listening.
Rakeem Addison is a youtuber that shares content about the best practices to succeed on different digital platforms. He is the owner of the channel Video Marketing Masterminds where he talks about how to grow a highly profitable YouTube channel.
Rakeem shares his experiences all over his videos. With a huge part of his audience interested in becoming well paid youtubers he made videos about CPM and RPM, the key metrics to consider while making money on the platform.
He took his own channel as a case study and started in July with a RPM of $2. 47. Less than a month later he managed to have a $5.93 RPM. More than 43% more in 30 days. Here's how he did it so you can do it too!
Be aware of the views and interactions your videos are receiving and this is going to give a clear picture of what to do. Find your Top Earning Content and keep it in mind to create similar videos that have proven to work.
Rakeem found out that his longer videos were working better so he went on to step number two.
In those videos that are working better and are longer than 8 minutes, don’t hesitate to include more ad breaks. Make sure all ad locations are available for your content and don’t be afraid to overwhelm your audience as YouTube has the final word when it comes to ads and its algorithm makes sure you don’t mess up your viewers retention. Adding more ads just multiplies your opportunities to access revenue.
On his longer videos, he placed ads every 2 minutes to increase his monetization opportunities.
Find out what two important things: what your audience is looking for and what brands in your niche are trying to sell. Then use that words, ideas or information and put it into your titles and description increasing your discoverability.
He researched his niche, found the products people were talking about and made a video addressing that topic.
Make a calendar and keep up with the posting plan. If you commit to a certain day and time, you are going to be able to increase your views per upload as people are getting used to you posting new videos at the same time. Because of the YouTube algorithm’s recommendation system, this is also going to improve your views in older videos, improving your overall CPM and revenue potential.
In July Rakeem was posting 2 videos a week. Later on in August he decided to upload once a week at the same time every Monday.
Cost Per Mille and Revenue Per Mille are your main allies in the Youtube Monetization Journey. CPM stands for what brands pay for advertising and RPM stands for what you earn as a creator.
The higher these metrics, the higher your earnings will be. Get to know them, experience with them and your content and don’t be afraid to try multiple revenue opportunities until you find the best monetization strategy for you and your channel.
The higher your CPM and RPM, the less amount of views you need to have in order to make a good amount of money.
