YouTube has more than two billion people using it every month, which means it’s a great place for creators to make money. To do that, you need to understand something called YouTube CPM, which stands for Cost per 1,000 Impressions. CPM is like a special number that tells you how much advertisers pay to show their ads to people who watch your videos.
Imagine this: CPM is a common advertising metric. It reveals how much an advertiser invests to reach 1,000 viewers.
Maximizing your YouTube CPM means more income and highlights your video’s value. In this article, we’ll simplify CPM, explain its calculation, and discuss what qualifies as a “good CPM,” all without using complex terms.
What exactly is CPM?
CPM, or the cost per 1,000 impressions, is essentially what advertisers pay on YouTube for every 1,000 times people see their ads on your video.
The CPM rate can vary. It all boils down to how much an advertiser is willing to spend on getting their ad out there. When it comes to advertising on YouTube, several factors come into play, such as the bidding price, the type of ad, and how frequently it’s displayed.
How does it work?
To figure out CPM, you need to follow a simple formula. First, take the amount the advertiser paid for an ad and divide it by the number of views the video has. Then, multiply this result by 1,000.
Let’s break it down with an example: imagine an advertiser paid $9 for an ad that was seen 5,000 times on your video. To calculate CPM, you’d do this: $9 divided by 5,000 equals $0.0018. Then, you multiply $0.0018 by 1,000, giving you a CPM of $1.80.
Here’s the catch: YouTube takes a 45% cut from your CPM, which means you’ll receive only 55% of that $1.80. So, if you earn a $1.80 CPM from an ad, your actual earnings will be $0.99.
Now, there’s another type of CPM called playback-based CPM. Instead of calculating the cost an advertiser pays for 1,000 impressions, this method calculates the cost for 1,000 video playbacks where an ad is displayed.
Don’t worry if you’re not a math whiz; you can find free online calculators to do this for you. Even if the CPM for each video appears low (e.g., $0.99), it adds up. With consistent business interest, monthly income grows substantially.
How important is CPM?
If you’re a YouTube creator, CPM is a vital metric. It helps identify your most valuable videos to advertisers.
Advertising is the main revenue source on YouTube. Understanding CPM is essential to maximize your earnings.
If you’re looking to make YouTube your full-time job, it’s essential to know which videos you can make money from. This knowledge helps you create a smart, long-term plan to focus on those types of content.
One of the best ways to increase your CPM is to make your channel a great place for advertisers to put their ads. YouTube’s research shows that when ads reach people multiple times a week, it’s a big win for advertisers.
When advertisers regularly choose your videos, it not only helps them but also boosts your CPM, leading to more income for you.
Additionally, if you notice a specific brand consistently advertising on your videos and it matches your values, you could consider reaching out to them. This might open up other money-making opportunities on YouTube, like affiliate marketing or brand partnerships.
The Average CPM on YouTube
CPM can vary widely based on what an advertiser pays for their ad to appear in your video.
Let’s illustrate this: If an advertiser invests $10 for an ad displayed on your video with 1,000 views, you’d have a $10 CPM (10/1,000 x 1,000). However, after deducting 45%, your actual earnings would be approximately $5.
Typically, videos chosen for advertising have more than 1,000 views, which can bring your earnings closer to the range of $7 to $10.
Remember, while CPM is important, it’s just one metric for assessing and enhancing your YouTube performance. YouTube analytics also offer other insights like revenue per mile (RPM), revealing your earnings per 1,000 video views across various revenue sources.
YouTube’s highest CPM
The top CPM varies by country, and here are the five countries with the highest YouTube CPM rates for 2022-2023:
1. Norway: $43.15
2. Germany: $38.85
3. Moldova: $29.50
4. Algeria: $24.50
5. South Korea: $17.00
Higher CPM rates are also influenced by your video’s content. Some categories tend to yield higher CPMs, such as makeup, retail, health, finance, and technology.
However, CPM isn’t solely determined by video topics. Many creators notice fluctuations in their CPM throughout the year. For instance, during the holiday season in November and December, increased seasonal shopping can temporarily boost YouTube earnings in specific niches.
Starting Out
For creators, CPM serves as a metric to pinpoint valuable topics for advertisers, offering better monetization opportunities.
Instead of seeking quick CPM boosts, focus on a long-term YouTube strategy that enhances sales, expands your audience, and boosts brand recognition.