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What is YouTube RPM?

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What is YouTube RPM?

YouTube provides many ways for you to track the success of your YouTube channel.

After all, your success is their success, so it is in their best interests to make sure you have everything you need. Among the things YouTube provides you with—indeed, probably the most important thing that YouTube provides you with in this regard—is a raft of metrics for keeping track of how your channel is doing in a range of different areas.

You can track things like what regions of the world are viewing your videos, what demographics those viewers fit into. You can even track what devices they are viewing your videos on. But, most importantly for this post, you can check how your channel is doing in terms of revenue.

The most common metric, and typically the best gauge of how well you are doing financially, is the CPM.

CPM stands for cost per mille and is a metric of how much money you are making per thousand views. It is an industry-standard metric from the larger advertising world and, as such, it is not quite perfect for determining how your channel is doing.

YouTube is an increasingly complex platform with a growing number of ways for you to generate revenue from your channel, whereas CPM is very advertising-focussed.

In fact if you want to know more about CPM I deep dive into what is CPM in my blog.

But now its time to understand the new comer, Enter RPM.

What is YouTube RPM?

RPM—revenue per mille—is a new metric that YouTube has introduced in an effort to give you a much more comprehensive snapshot of how your channel is performing financially. It represents the amount of revenue your channel has generated per thousand streams, but the revenue counted comes from multiple sources, not just advertisements.

Those revenue sources are;

  • Ads
  • Channel Memberships
  • YouTube Premium
  • Super Chat
  • Super Stickers
  • YouTube BrandConnect

There are generally a lot of questions regarding RPM, so we’re going to attempt to answer them all here.

What is the Difference Between CPM and RPM?

The differences between CPM and RPM can be whittled down to three main aspects:

  1. CPM only factors in ad views when totalling up revenue
  2. CPM does not factor in views on videos that aren’t monetised
  3. CPM does not factor in YouTube’s share of your revenue

Overall, RPM is intended to be a much more creator-focused metric than CPM, which is very much intended for advertiser use by its nature. It may take a little adjustment, but RPM should be considerably more useful for YouTubers going forward.

What is YouTube CPM?

Why is my RPM so Much Lower Than my CPM?

It is important to remember that CPM and RPM are units of measurement and, like any unit of measurement, there are two variables to factor in. For CPM and RPM, those variables are views and revenue, and that makes it a very fluid metric since both variables can change.

CPM only factors in the views from monetised videos, which for most channels means fewer views, since many channels will invariably have some not-monetised content on their channel. CPM also only factors in revenue from ads, which for some channels, means less revenue, as there are other sources of revenue available to you, such as memberships and super chat.

The exact numbers will depend on your channel, but it is entirely possible that you could see your RPM being much lower than your CPM. If your channel does not make use of non-ad-based revenue streams and has a good amount of not-monetised content, the CPM will be higher because your RPM will be factoring in additional views without any additional revenue.

On the other hand, if you make a lot of revenue from things like memberships and super chat and have hardly any views on not-monetised videos, your RPM will be higher than your CPM because the views are roughly the same, but a lot of additional revenue is being factored in.

Finally, RPM factors in YouTube’s cut of your revenue, which is a pretty hefty 45%. This aspect alone will probably be enough to make your RPM lower than your CPM in most cases. The important thing to remember is that RPM is a different way of looking at the existing metrics of your channel.

It does not change your earnings in any way; it just presents a more representative snapshot of what they are.

How Do YouTubers Receive Their Money? 3

Is RPM Important?

We believe it is very important because of the clear direction that YouTube is going. YouTubers have long since accepted that YouTube’s built-in monetisation is not a reliable—or even a good—way to make money from your channel. As a result, they have cast their nets wide and found membership platforms, brand deals, affiliate marketing, and more. The key thing here being that none of these things are through YouTube, meaning YouTube are not getting a share of those profits.

As much as some YouTubers believe that YouTube hates them, the truth is YouTube is a business, and everything they do is an attempt to ensure they make money. Being primarily advertisement-based has posed its problems for YouTube, as every adpocalypse has shown. Demonetising thousands of channels doesn’t just hurt the YouTubers; it takes money out of YouTube’s pocket as well.

The solution is pretty obvious, of course. YouTubers have found ways to monetise their content away from the YouTube platform, and in ways that are not beholden to advertisers. It makes total sense that YouTube would look to incorporate those methods into their own platform, where they can take a cut of the profits.

Memberships, YouTube Premium views, Super Chat, Super Stickers—these are all ways in which a YouTuber—and YouTube themselves—can earn revenue in ways that do not involve advertisers. It is essentially a direct transaction between the viewer and the YouTuber (facilitated by YouTube for a small fee, of course) and as such, there are no external forces involved that might want that revenue removed.

The external forces are, of course, advertisers. In an increasingly volatile and reactionary world, advertisers are increasingly picky about the kinds of content they will allow their ads to be shown on. For example, content that includes political commentary, any kind of violence, weapons, things of a sexual nature—all of these things are essentially monetisation suicide because advertisers don’t want their brand associated with that kind of content. Despite this, there are many channels that make the kinds of content that are deemed not suitable for monetisation that are, nonetheless, very popular.

YouTube wants those channels to be able to generate revenue, but they can’t tell advertisers to take it or leave because, frankly, they will probably leave it. So they are introducing other ways for the channels to monetise so that YouTube can still earn revenue from them. And it is entirely reasonable to believe that they will continue adding ways for YouTubers to monetise their channels through the platform itself as new viable ways emerge.

The more alternative monetisation methods to advertising that become available, the more important RPM will be as a metric. It is unlikely that advertising will stop being the primary source of revenue for YouTube as a whole any time soon, but the more you take advantages of non-advertising-based revenue sources, the more RPM will matter to you.

Do YouTubers Pay Tax? 3

How to Increase YouTube RPM?

To bring your RPM up, you need to adjust the ratio of revenue-to-views. Make sure that as many eligible videos as possible have monetisation turned on, and enable all types of eligible advertisements on those videos.

Next up, make use of the other monetisation methods on offer where you can. Granted, things like super chat and super stickers are not the kind of thing that every channel can make use of, but if you can, use them. The more money your channel is generating for the same views, the higher your RPM will be.

Another thing that will significantly affect your RPM is watch time, and it is a thing that most YouTube experts will tell you is one of the most important aspects to focus on. More watch time does not only mean more opportunity to show ads—though that is undoubtedly a big part of it—it also says very good things about your channel to the YouTube algorithm.

Channel’s that get a lot of watch time are given higher priority in the YouTube recommendation algorithm, which means there will be a greater chance that your content will be recommended to new people. Granted, adding new viewers is a slower way to improve your RPM, but remember the ultimate goal; revenue. Low RPM is not necessarily a bad thing.

A YouTuber with an RPM of $5 and 200,000 views per month is making around $1,000, whereas a YouTuber with an RPM of $2 and 1,000,000 views per month will be making around twice as much. Manipulating your RPM without improving your overall revenue is a pointless endeavour.

Do YouTubers Pay Tax? 5

My YouTube RPM is Going Down, Should I Worry?

The answer to this question is “it depends”. RPM provides a good snapshot of how your channel is doing, but it is still only a single datapoint. Without taking other factors into account, you cannot make an accurate judgement on the state of your channel. As the example above illustrates, it is entirely possible for a YouTuber to have less than half of the RPM of another YouTuber, and yet still make more than twice as much revenue.

If your RPM is dropping, but your revenue is staying the same—or even increasing—that is indicative of a surge in viewers. This could happen because of a video going viral, or a mention on a much larger YouTube channel. In this case, there’s nothing to worry about. If your RPM settles at this new lower level, you might want to look into ways to more effectively monetise your new views, but there is nothing to be concerned about from the RPM dropping.

On the other hand, if your RPM starts to go up, but your revenue isn’t increasing, that could be a sign that you are losing viewers, but not viewers that generate much in the way of revenue.

Is There Any Revenue RPM Doesn’t Factor?

First of all, it’s important to remember that any YouTube metric can only tell you what is going on through the platform itself. If you are earning money through a service like Patreon, Amazon Affiliates, or even if you are booking live shows or speaking gigs directly off of the back of your YouTube channel, this should all be counted as part of your revenue, but YouTube cannot factor these variables in.

YouTube also cannot factor in brand deals and sponsorships unless they are through YouTube’s BrandConnect service. Finally, RPM does not include revenue made from merchandise sales through the merch shelf service that YouTube provides. Given the direction that YouTube seems to be heading in this area, it would be reasonable to expect that this revenue will someday be incorporated into RPM, but that is not the case yet.

Final Thoughts

When judging any aspect of your channel, it is essential not to get too hung up on any single metric. RPM provides an excellent snapshot of your channel’s financial health, but it is essentially meaningless on its own due to the fact that changes in the number of views you are getting or revenue you are earning overall will change the RPM without it being inherently obvious why.

As a lone metric with no other input, your RPM is a good measure of how efficiently your revenue is being generated. The higher it is, the more value you are getting per view (or, more accurately, thousand views). Without knowing how many views you are getting, or how much revenue you are making, that is about as much as RPM can tell you.

However, in conjunction with the revenue and views metrics, RPM is a powerful datapoint that can tell you a lot about your channel.

Ultimately, the foundation of your approach should be to make the best possible content you can, with additional strategies being considered improvements upon that solid base. You could make use of every strategy known to YouTube and still fail if you don’t have good content, so start there, and your RPM should stay healthy.

By Alan Spicer - YouTube Certified Expert

UK Based - YouTube Certified Expert Alan Spicer is a YouTube and Social Media consultant with over 15 years of knowledge within web design, community building, content creation and YouTube channel building.

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