If you’re a YouTube creator who earns money from ad revenue, you’re probably creating high-quality content and strategically timing your posts to earn as many views as possible. You’d love to make more money from your efforts, but it’s not like you can just charge advertisers more.
Understanding how YouTube CPM works can help you make more ad revenue from your content and viewers. Learn what CPM is, how it impacts creators and how you can position yourself to earn more from YouTube ads.
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What is YouTube CPM?
YouTube cost per mille (CPM) refers to the price advertisers pay content creators for every 1,000 views an ad receives on the YouTube platform. For example, if the advertiser cost for an ad is $12 and the ad is viewed 3,000 times, its CPM is ($12 / 3,000) x 1,000, or $4.
YouTube advertisers purchase ad placements through the Google AdSense auction using either a CPM or cost per click (CPC) bidding strategy. CPM ads charge advertisers and pay creators based on ad impressions, while YouTube CPC ads charge advertisers and pay creators based on the number of times an ad is clicked.
How to calculate YouTube CPM
YouTube ad revenue analytics display a number of metrics, including impression-based CPM and playback-based CPM. Impression-based CPM measures the cost per 1,000 ad impressions, while playback-based CPM measures cost per 1,000 video views.
You can calculate CPM yourself using the following formula:
Impression-based CPM = (total ad costs / total monetizable ad views ) x 1,000
The formula for calculating playback-based CPM is similar, but instead of dividing advertiser costs by total ad views, you divide those costs by your total number of monetized playbacks—instances when a user views a video during which an ad plays:
Playback-based CPM = (total ad costs / total monetized playbacks ) x 1,000
Note that because CPM reports earnings before revenue share, CPM isn’t the amount YouTube content creators actually earn. YouTube pays creators 55% of an ad’s CPM.
How does YouTube CPM impact creators?
YouTube pays content creators 55% of an ad’s CPM, so CPM has a direct impact on creator earnings.
You can use this formula to calculate your earnings based on CPM:
Creator pay = [(total number of eligible ad views / 1,000) x CPM] x .55
Here’s an example:
If your YouTube video hosts an ad with a CPM of $7 and the video receives 100,000 eligible views, YouTube will bring in (100,000 / 1,000) x $7 = $700. YouTube takes 45% of ad revenue, which comes to $315, and you take home 55%, or $385.
Keep in mind that eligible views don’t include repeat views or video views with a watch time less than 30 seconds. Your total number of views may be greater than the number of views for which you’re compensated.
What factors influence YouTube CPM rates?
The average CPM in the US is around $0.38, but actual rates can vary widely. Here’s an overview of the factors affecting YouTube CPM:
- Industry: Content related to certain niches has a higher CPM than other content. Investing, makeup, health, and personal finance typically report particularly high CPM rates.
- Country: CPM rates also vary by country. The average CPM in the US is around $0.38.
- Available ad formats: Some ad types tend to have higher CPMs than others. CPM is frequently higher for non-skippable ads than for skippable ads, so you may see fluctuations in your CPM based on the types of ads available in YouTube’s ad inventory.
- Time of year: Advertisers purchase YouTube ads through a bidding process, so CPMs can be higher when there’s more competition for ad space (such as from mid-November through the end of the year).
How to increase your YouTube CPM
- Select a niche with a high CPM
- Target countries with strong CPM rates
- Leverage analytics
- Create advertiser-friendly content
YouTube creator earnings depend on both your CPM and the amount of video views, so the two main ways to boost your YouTube revenue are to earn more video views and to increase your CPM. Here are a few strategies that can help you boost your CPM rates:
1. Select a niche with a higher average CPM
The more advertisers are willing to pay to reach your viewers, the greater your potential CPM. The following industries have some of the highest YouTube CPM rates:
- Real estate
- Legal services
- Digital marketing
- Home repair
- Personal finance
Creating high-quality videos about these subjects can help you develop a following that represents the target audiences of advertisers in these industries. This makes your channel a good candidate for advertising campaigns with higher CPM rates.
2. Target countries with strong CPM rates
CPM varies by country. If you have an interest in or familiarity with a country that has a high CPM rate, creating content that targets a viewership there can boost your rates overall.
For example, you might record a video covering events, brands, celebrities, or other topics relevant to your targeted country and title your video in the country’s most commonly spoken language. If you have a large and engaged audience and want to target multiple countries, you can also upload videos in multiple languages, manually add translations, or use a translation tool to increase the accessibility of your content.
CPM rates across different countries vary widely and constantly change. Countries estimated to have consistently high CPM rates are Australia, New Zealand, Canada, Switzerland, and Singapore.
3. Leverage analytics
YouTube analytics contain information about your estimated monetized playbacks, ad revenue, and total estimated revenue. This includes both ad revenue and revenue from other sources like channel memberships, YouTube Premium, and Superchat. Metrics are available in the YouTube analytics under the Revenue tab.
Monitoring analytics for your YouTube channel can help you establish a baseline CPM, monitor fluctuations, and identify strategies that improve your results. For example, if you notice a significant increase in CPM after launching a new video series of DIY home-improvement techniques, you can experiment with creating more of this type of content.
4. Create advertiser-friendly content
YouTube considers certain types of video content ineligible for ads, including videos that depict dangerous or harmful acts, are demeaning or derogatory, or contain drug-related content. To maximize your CPM, create videos that abide by YouTube’s advertiser-friendly content guidelines.
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YouTube CPM FAQ
What is the average CPM on YouTube?
Average CPM varies by country. The average CPM in the US is around $0.38.
Why do YouTube CPM rates fluctuate?
The following factors can cause CPM rates to fluctuate:
- Changes in where your viewers are located
- Changes in advertiser demand based on time of year or other market factors
- Changes in available ad formats
Are there any downsides to relying solely on YouTube CPM for monetization?
Yes. YouTube takes 45% of ad revenue associated with your video views, and certain countries and industries tend to have lower average CPM rates. However, there are plenty of other ways to monetize your YouTube content, including affiliate marketing and fan funding.