When you create a YouTube channel, the next thing you think about is monetizing it and earning high income from the channel.
Well, YouTube has a criterion to determine how much the content creator gets based on the ads displayed on their channel.
One metric you will encounter when running a YouTube channel is the CPM, which stands for Cost Per Mille. So, what is a good CPM on YouTube?
Different factors affect the CPM on YouTube. For instance, the cost an advertiser will pay depends on the niche of your content. Again, how your video ranks determine the CPM you get. Still, other factors like location affect the CPM. There is no specific CPM that you are entitled to as a content creator. However, you will reap big when you have a CPM starting from $5. Depending on various factors, many creators have their CPM ranging from $2 to $5.
What is CPM? We will discuss CPM in detail to understand why it matters when you are a YouTuber. Still, we will understand how to calculate CPM and the various factors that affect it. Lastly, we will compare CPM with RPM to understand their difference.
What Is CPM on YouTube?
Every YouTuber’s dream is to create a YouTube channel, get many subscribers, land high-paying ads, and generate huge income from their content. Unfortunately, that’s not the case. Many YouTubers get a hard time earning from the channel.
When discussing how much you can earn from YouTube, you must understand CPM and how it affects your earnings. CPM stands for Cost per mille. It refers to the amount an advertiser is willing and able to pay for every 1000 views their ad will get on YouTube.
So, when you get an advertiser willing to spend more per impression, you will earn more from their ads displayed on your channel. When calculating the CPM, YouTube will take a 45% share from it and leave 55% to the content creator.
When looking to earn from a YouTube channel, you must note the CPM rates for different niches. That way, you will likely earn more by creating content that aligns with a particular niche where advertisers will pay more. A good strategy would involve finding a niche with good CPM and creating trending topics around that niche.
You can easily calculate the CPM using this formula: (Total ad payout by advertiser / Total views) * 1000 = CPM. From this, you can quickly calculate the total revenue you will get before YouTube takes its share. Total revenue = (Total views / 1000) * CPM.
What Is a Good CPM on YouTube?
Getting a good CPM is not obvious. Different advertisers will pay different CPM depending on their niche. Thus, there is no specific measure of a good CPM. However, many YouTubers get an average CPM of 2$ to 5$. Hence, if you are getting anything above 5$ as your CPM, we consider that as a good CPM. Some niches attract high CPM of over 10$.
Different factors affect the CPM. They include the following.
The Niche
Each niche has different advertisers. Moreover, the competition and value in the niches differ. So, it’s no surprise that some niches attract higher CPM than others.
The Country
Your location determines the CPM you get. Some countries have advertisers paying more for their ads than other countries. When you are in a region where advertisers have a bigger ad budget, you will reap big.
SEO
How well a video ranks will increase its chances of attracting high CPM. Some advertisers give a criterion to be met before their ads are displayed on a given video. A trending video will likely have a higher CPM in its industry.
CPM vs. RPM
CPM is the cost an advertiser is willing to spend for every 1000 impressions their ads get. However, RPM (revenue per mille) represents the income the content creator will get after YouTube takes its share of the total revenue generated from running the ad.
The RPM represents 55% of the CPM. YouTube takes 44%.
Conclusion
CPM is the cost an advertiser will pay for running the ads and for every 1000 views the ads get. We’ve explained everything about CPM and seen what a good CPM is on YouTube.
