CPM in the world of YouTube?
To assess the efficiency of an advertising campaign, YouTube uses stats and formulae. CPM is a keystone of measurements and a foundation for further tests and conclusions.
CPM means an amount of money you can get for the promotional material that was placed on this website within your video. Let’s see the deeper essence of this concept and try to shed light on some discrepancies in its rates.
What is CPM?
While YouTube CPC means the amount of money that you get for every click on a certain ad, CPM is an abbreviation for Cost per Mille, where “mille” stands for a thousand views. Thus, you are paid each time when your ad reaches this mark. The more views the ad gets, the more money you earn. That’s why this metric is crucial for your YouTube channel monetization.
However, it’s not that simple: you won’t receive 100% of the promised revenue. YouTube takes a lion’s share of 45% (!) so that you get only $55 out of $100, for example. Note: That it’s not a reason to give up, but to try to provide as many views as possible.
Keep in mind that the platform will mark a view only if an advertising video has been watched for longer than 30 seconds. The views that are made from mobile gadgets are also meaningless. Besides, you can use YouTube’s special calculator to predict your potential income and see the real picture.
CPM and RPM
CPM is a numerical definition to reflect the income that you share with YouTube. This entails another parameter – RPM (Revenue per Mille) which is used to calculate your personal income considering the platform’s retention. So, the amount of CPM is in direct proportion to RPM. Both metrics are important to assess your future profit. However, CPM is of great meaning for advertisers and RMP is crucial for creators.
YouTube is not going to inform you about your possible RPM value, but one can handle this independently.
- Open “Settings” in your AdSense account to check “Payments.” Look at the numbers for the last month.
- Enter YouTube Analytics to see the number of views at the Monetized Playbacks (don’t look at the formal number of views because you should remember that not all of them are monetized).
- Use the following formula to make calculations:
Monthly income / Number of monetized views X 1,000.
For example, you earned $200 for the last month and managed to get 50,000 of views. So, 200/50,000 x 1,000 = $4. That means you’ve got $4 for every 1,000 views.
How to find out CPM for your channel
It’s a challenge to calculate CPM YouTube ad rates because of its instability. The rates jump up and down all the time during the year. Mostly, the following factors determine the cost:
- Audience type
Consecutively, the CPM rate depends on many factors, but it is still possible to calculate the value. The formula is similar to the RPM calculation model, but we use the number of people (audience) instead of the number of monetized views. The result is the price for every thousand impressions that an advertiser gets.
For example, an investment of $10,000 into an advertising campaign entailed 4,700,000 views. Thus, CPM is equal to ($10,000/4,700,000)x1000 = $2.13, which is the amount of money an advertiser should pay for a thousand of views. For example, the YouTube average CPM is $2.
How to increase CPM of your channel
Sometimes CPM rates crash and the situation becomes disappointing. That may happen because of the absence of due work with your audience. For example, if your followers are located in the Middle East, you can hardly expect high earnings for advertising swimming suits. In any case, there’s no need to discuss reasons for decreasing CPM rates, but it’s better to reveal how to enhance them.
Why you need monetized views
You may have a thousand subscribers, but still, don’t get a high income. Their number enhances awareness, popularity, and ranking, but not revenue. Monetization is required to engage the audience in viewing videos.
Note that to start monetizing your channel, you need to meet some requirements. For example, you should become a member of the Partner Program to monetize through Google AdSense. However, for this purpose, you have to have no less than 1,000 subscribers and have reached 4,000 hours of total watching time in the past twelve months.
How to increase the number of monetized views
The following hints are helpful for multiplying your monetized views.
- Create unique original content. Uploaded clips from other sources are meaningless. You can use other people’s videos for commentary purposes only.
- Attract followers by natural means (don’t buy them for bonuses/money or in exchange for your own subscription) to make your channel grow. This practice doesn’t work. No artificial inflations are allowed.
- Get traffic in legitimate ways by means of relevant keywords and tags, sharing your videos on social platforms, etc. Bots and other spam tactics are forbidden.
- Publish respectable content and avoid placing videos that promote violence, drugs, and so on.
- Keep your channel active at all times. That means you should upload content regularly. Breaks that are over half a year can provoke demonetization and closure.
Also, here are some recommendations to improve your video’s quality:
- Introduce valuable information or entertainment.
- Think of meta tags (title and description) and make them relevant to the content.
- Try to avoid creating clips that are too long to ensure high audience retention.
- Make your videos bright with exotic locations, advanced visual effects, etc.
- “Decorate” clips with various frames. Use the diversity of angles.
- Use interesting and suitable soundtracks.
YouTube CPM rates
As to not harbor false hope about the cost of YouTube ads, study YouTube stats before creating and placing content on your channel. It will help understand the current situation correctly. Besides, it would have been nice to analyze your direct competitors to see their channels’ development.
CPM rates depending on the country
CPM is also dependable on the geographical location. To make more money, target video in one of the 14 countries with premium rates.
The list of the countries with the highest YouTube advertising CPM are rather stable, but some countries can trade places from year to year. So, here’re the leaders:
- New Zealand
However, in 2017–2018, Australia demonstrated the highest CPM and took first place.
Such countries as Moldova, Ukraine, Serbia and some others usually have the lowest CPM rates.
CPM rates depending on the type of video
We’ve already revealed the fact that YouTube advertising costs are tied to content quality. However, some external factors are not dependable on the creator’s efforts. For example, if comparing educational and entertaining content, the first boasts higher CPM rates. In this case, CPM is based on the niche.
Why is the type of video extremely meaningful? The main reason is that video advertising is closely linked to consumer demand. To clarify the nuances, let’s consider the example of the UK – one of the countries with the highest CPM rates ($3–$6 on average).
Plenty of British publishers use the Ad Exchange platform to sell media advertising. Its CPM rates are based on a set of factors (location, engagement, etc.) and reach the range of $3–$8. The publisher can choose the type of ad to display. And, the network offers in-stream video ads that can be skipped but saves the same revenue for an impression at the same time.
Pre Roll ads are widespread and rather common. This is a message that you have to watch before the content. In addition, they can be very irritating, because there’s no option to skip it immediately. However, presenting them in a witty and entertaining manner, you can reach CPM of $3–$8. The same is true for Mid Roll ads that are played in the middle of the clip.
Outstream video ads are displayed within the limited ad space between images and other pieces of content. They boast the CPM rate of $4–$8. Such ads are extremely viewable because they have no strict placement.
Native videos can bring $5 or more because they are not annoying and they’re created within the channel concept.
Is CPM the only way to monetize your channel?
There are more ways of getting money from your channel if ads are not attractive to you.
- Sell products
This method is effective if you’ve managed to build your brand. In this case, you can sell t-shirts, bags, cups and other merch. Besides, you can create and sell original educational courses, e-books and classes. It’s possible to promote products and increase sales when your goods are presented on Etsy and other similar platforms.
- Affiliate marketing
It’s also profitable to recommend goods – not directly – but through the affiliate links to get decent commissions after the customer has placed an order. For this purpose, you should add the associated website to your channel and then get an affiliate link. The next step implies pointing the audience to a URL on your own resource that will redirect them the affiliate’s website. The last thing is to insert affiliate links in the content. You can look for a proper program especially for YouTubers or explore the travel niche.
- Branded content
The main task is to produce the content your target customers will enjoy watching. They should get a value that will be increasing from one video to another. For example, you decided to create a series about home renovation. The first clip can deal with building, the second can show the best ways of decoration, then you can tell about gardening, and so one. This example is a bit schematic, but the idea is to involve your audience in watching videos.
Making the best of your YouTube channel in 2020
To grow a channel, remember to follow the platform rules and restrictions and check with YouTube advertising prices and statistics. Once all the necessary tools have been integrated and promotional means used, they will make your channel more efficient and successful, so that monetizing it in the most profitable way will be a piece of cake.