With more than two billion monthly active YouTube User, YouTube is an undeniably powerful advertising channel. So, if you are a YouTube creator, you have many options for making money from the platform.
For example, if advertisers pay to show ads on your videos, you can increase sales in the form of CPM.
In addition to increasing your sales, CPM is a strong indicator that your content is valuable and helps you identify companies that you may want to work with later.
Whether you’ve been a YouTube developer for years or just starting out, CPM is an important metric to ensure you are maximizing YouTube’s potential as a revenue generator.
Here we are going to examine what CPM is, how it is calculated, and what makes a “good CPM”.
What is CPM and how is it calculated?
CPM, or cost per 1,000 impressions, is the cost an advertiser has to pay on YouTube for every 1,000 impressions their ads receive on your video.
The CPM is based on how much an advertiser pays to display the ad. The ad price on YouTube depends on a number of factors, including the bid price, ad type, and consistency.
For example, let’s say an advertiser pays $ 9 for an ad and the ad was seen on your video 5,000 times. To calculate CPM, divide 9 by 5,000 = $ 0.0018, then multiply $ 0.0018 by $ 1,000.
So the CPA is $ 1.80. You get 55% of that $ 1.80 – since YouTube also pays a percentage of the CPA (45% to be precise). So if you make $ 1.80 CPA from an ad, you’ll only keep $ 0.99.
In addition, there is another type of CPM: playback-based CPM. Instead of calculating the cost an advertiser pays for 1,000 impressions, rendition-based CPM calculates the cost an advertiser pays for 1,000 videos Renditions where an ad is displayed.
There is free calculator Available online if you don’t want to calculate your CPM manually. Even if the CPMs of individual videos seem small (like the $ 0.99 above), this can translate into high monthly earnings if many companies view your videos as consistently rewarding platforms for their promotions.
Why is CPM important?
As a YouTube creator, CPM is an important metric for analyzing which of your videos are most valuable to advertisers. Advertising is that primary method of monetization This is important information on YouTube.
In order to turn YouTube into a full-time career, it is important that you understand what videos can be monetized so that you can come up with a more efficient and long-term strategy on these type of topics.
For example, you might be creating YouTube videos on beauty, health, and wellness – but in particular, you will find that Drugstore Makeup Tutorials get the highest CPMs. This could mean that you should create more content that is related to that topic.
Additionally, you may find a company that regularly advertises on your videos. When the brand aligns with your own values, you can reach out directly to other YouTube partnership opportunities such as B. Affiliate Marketing.
Average CPM on YouTube
CPM varies very It depends on how much an advertiser is paying to distribute an ad on your video.
For example, let’s say an advertiser pays $ 10 for an ad that plays on your 1,000-view video. In that case, you’d be making $ 10 CPM (10 / 1,000 x 1,000). Then of course you have to subtract 45% from that total so that you make around $ 5.
However, in most cases, the videos that companies are advertising will have more than 1,000 views, so your earnings will be closer to $ 7-10.
Jilliian Hope, Senior Manager, Brand Promotion at HubSpot, agrees, telling me that her team typically sees an average of $ 7-10 from previous campaigns.
However, the CPM varies by country. For example, A source reports The United States has an average CPM of 0.38, while Spain is 4.38, Switzerland is 3.87, and Mauritius is 7.05. This means that the amount of money you earn from YouTube depends in part on your geographic location.
Highest CPM on YouTube
The highest CPM varies by country, but here is a list of the five highest CPA rates by country as reported by a source::
- Maldives: $ 15.47
- Guadeloupe: $ 10.97
- Denmark: $ 10.61
- Poland: $ 9.23
- Pakistan: $ 7.54
In addition, certain niche topics ultimately have higher CPMs. Industries that a) perform well on YouTube and b) are incredibly profitable will perform better when it comes to CPM. These industries include:
As a brand, you should use CPM as a metric to figure out which topics seem most valuable to advertisers, as these topics are likely to be the greatest monetization opportunity.
Instead of looking for “quick tricks” to increase your CPM, play the long game by creating a comprehensive one YouTube strategy to increase sales, reach new target groups and increase brand awareness.