What is YouTube CPM? [+ Why It Matters]

What is YouTube CPM? [+ Why It Matters]

More than two billion monthly active YouTube users, YouTube is undoubtedly a powerful channel for advertising, which means that if you are a creator of YouTube, there are many opportunities for you to make money from the platform. For example, if advertisers pay to display ads on their videos, it can increase revenue in the form of CPM. In addition to increasing your revenue, CPM is a strong indicator that your content is valuable and helps you identify companies that you might want to partner with in the future. Whether you’ve been a YouTube creator for years or are just starting out, CPM is an important metric to understand to make sure you’re maximizing YouTube’s potential as a revenue generator. Here, we will explore 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 that an advertiser must pay on YouTube for every 1,000 impressions their ads receive on their video. CPM varies based on how much an advertiser pays to display the ad. YouTube ad price depends on a variety of factors, including bid price, ad type, and consistency. So for example, let’s say an advertiser is paying $ 9 for an ad and the ad was viewed 5,000 times in their video. To calculate the CPM, you would divide 9 by 5000 = $ 0.0018 and then multiply $ 0.0018 by 1000. The CPA, then, is $ 1.80. You’ll receive 55% of that $ 1.80, as YouTube takes a percentage of the CPA as well (45%, to be exact). So if you get a CPA of $ 1.80 with an ad, you will only keep $ 0.99. In addition, there is another type of CPM: Replay-based CPM. Rather than calculating the cost an advertiser pays for 1,000 impressions, Play-based CPM calculates the cost an advertiser pays for 1,000 video reproductions where an ad is displayed. exist free calculators available online, if you don’t want to calculate your CPM manually. And while individual video CPMs may seem small (like the $ 0.99 earned, above), they can add up to a hefty monthly profit if many companies view their videos as consistently valuable platforms for their promotions.

Why is CPM important?

As a YouTube creator, CPM is an important metric in analyzing which of your videos are most valuable to advertisers. Since advertising is the primary monetization method on YouTube, this is vital information. To pursue a full-time career on YouTube, it is critical that you know which videos can be monetized so that you can create a more efficient, long-term strategy to target those types of topics. For example, perhaps you create YouTube videos on beauty, health and wellness, but find, in particular, that “Pharmacy Makeup Tutorials” receive the highest CPMs. This might suggest that you should create more content that aligns with that topic. Also, you may find a particular company that is constantly advertising in your videos. If the brand is aligned with your own values, you can reach out directly to discuss other YouTube partnership opportunities, such as affiliate marketing.

Average CPM on YouTube

CPM varies greatly depending on how much an advertiser pays to serve an ad on their video. For example, let’s say an advertiser pays $ 10 for an ad that plays on their video, which has 1,000 views. If that’s the case, you would earn $ 10 CPM (10 / 1,000 x 1,000). Of course, then, you will need to take 45% of that total, which will bring your profit to around $ 5. However, in most cases, the videos that companies choose to advertise will have more than 1,000. views, which will bring your earnings closer to $ 7- $ 10. Jilliian Hope, HubSpot’s senior manager of brand advertising, agrees and tells me that her team typically sees an average of $ 7 to $ 10 in previous campaigns. However, the CPM varies by country. For example, reports from a source The United States has an average of 0.38 CPM, while Spain is 4.38, Switzerland is 3.87 and Mauritius reaches 7.05. This means that the amount of money you make from YouTube depends, in part, on your geography.

Highest CPM on YouTube

The highest CPM varies by country, but here is a list of the top five highest CPA rates by country, as reported by a fountain: Maldives: $ 15.47 Guadeloupe: $ 10.97 Denmark: $ 10.61 Poland: $ 9.23 Pakistan: $ 7.54 Additionally, certain niche topics will eventually have higher CPMs. Industries that a) perform well on YouTube and b) are incredibly profitable will perform better in terms of CPM. These industries include: Makeup Retail Health Finance Technology As a brand, you should use CPM as a metric to help you identify which topics seem most valuable to advertisers, as those topics likely provide the greatest opportunity for monetization. However, instead of looking for “quick tricks” to increase your CPM, you will want to play long term by creating a YouTube strategy that helps you increase sales, reach new audiences and increase brand awareness.

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