– So you have 1000 subscribers and you have 4,000 hours watched, you've applied for and been accepted into the YouTube partner program, all you want to do now
is turn on monetization and start earning some sweet, sweet cash. But of course, that just leads
to the next obvious question. How much am I going to earn
from my YouTube videos? Well, around about this much. Now then, hey folks, I'm Rob, welcome back to vidIQ, educating you on your YouTube journey. And today's lesson is
everything you need to know about YouTube CPMs.
The term itself, CPM stands for lists, but all you need to know
from a YouTube perspective is that it shows you the
dollars you earn per 1000 views. You can of course find this
data on the analytics page of the YouTube studio, either for your channel as a whole or for individual Videos. But if only it was that simple, because you see what we've got to do now is stack layer upon layer of complexity onto this number to work out exactly how much you would make as a creator. All right then, where do we start? Let's go with revenue share. This number does not
reflect YouTube's cuts of the advertising. Yes, that's right folks. YouTube has a platform to
maintain and profits to earn. So what they're gonna
do is take a percentage of every single cent you
earn through ad revenue.
Whether you agree with this or not is a topic for the comment section but the standard agreement for revenue sharing is a 45/55 split. Meaning that for every
dollar you earn in ad revenue you keep 55 cents while YouTube
takes the other 45 cents. And this figure, as seen in YouTube analytics does not reflect that revenue share. Your real CPM would look more like this. And on top of this, if
you are part of an MCN, it doesn't factor in any
of their revenue share. Next up is estimated playbacks. Just because you have
monetize your channel does not mean that every single view has adverts placed against them.
In this example, just under
two thirds of a total views have been monetized. And so, because of this, you can't just say to yourself that you're going to earn
$10 for every thousand views. It's probably more like
$10 for every 1,317 views. But that doesn't even include YouTube's ad revenue share. Man this is getting complicated. Of course, the moment you monetize your natural instinct is
to just turn everything on from sponsored cards to
non-skippable mid-roll ads.
But what does that actually
mean in terms of CPM? Well, you can actually find that out by going to the ad type filter in advanced YouTube studio analytics. As you can see, there
can be a huge difference between CPMs. Typically video ads will
attract a lot higher CPM compared to display or bumper ads because well they're a lot
more noticeable and annoying. Now, obviously more adverts
per video means a higher CPM especially if your video is
longer than eight minutes as that allows you to insert mid-roll ads, but be aware of a tipping
point between tolerance and annoyance. Every advert you place on a video creates a barrier between your
content and your audience. I mean, let's face it. We're all YouTube viewers. And typically we want to see
as little ads as possible but at the same time we know that they nourish
the creator economy. Typically, if you just
tick all of the ad boxes, YouTube will do a very good automated job of placing the adverts
where they need to be.
But if you go manual,
really be considerate about where you're placing your adverts. All right, now we've talked about all of the ways your content can be monetized, but there are one or two exceptions that you need to be aware of if you're creating content on the fringes. Believe it or not, YouTube
content made for kids somewhat falls into this category. Thanks for YouTube getting in a lot of trouble a couple of years back when they collected data on children and they shouldn't have been doing that. They received a $170 million fine. Basically everything you
do as an adult on YouTube is documented and analyzed.
And with all of this data,
whenever you watch a video YouTube will specifically target you with almost personalized ads. Ads that are designed
to prey on your wants, your needs, your desires, even your fears. And to be clear, this isn't just YouTube that's doing it, it's the entire internet. I mean, not that I want to
scare you off the internet or anything, but you should really watch The Social Dilemma on Netflix if you can, it's fascinating stuff. Now having said all of this, when it comes to children, this is what YouTube definitely cannot do, personalized, targeted ads. And because of the very limited data YouTube can collect about kids, advertisers can't target their adverts as much as they would like, meaning the adverts are less valuable, ultimately reducing CPM. On the opposite end of the spectrum, we have self certification. When you first monetize content, you will likely need to
answer these questions about your videos. The reason for this is
because some forms of content may limit the types of ads
that appear on your videos. Some stuff like male
profanity will have no impact, whereas highly shocking
content most definitely will.
So obviously many brands
are not going to want to advertise their products and services on content that contains the things listed in that self certification. Because of that you may receive lower CPM. Now, of course, there maybe
the temptation to just lie on this form, but that is the last and worst thing you should be doing. That's because YouTube
doesn't take your word for it, at least to begin with. YouTube's automated systems
will review your content. But as you correctly
self-certify more of your videos, your rating accuracy will increase, meaning your content is
less likely to be mislabeled with limited ads in the future.
Now, to someone who just wants
to make money on YouTube, these checks could be seen as nothing more than an obstacle to financial gain, but these checks and balances
are here for everybody. They protect the viewer, the advertiser, and indeed you the creator because in the past bad actors have taken advantage and manipulated parts of YouTube which have resulted in
these checks and balances. And also remember what you're doing here. You're entering into a business
relationship with YouTube. Do you really want to try
and lie and deceive them? It's just not going to be a healthy and long running business
relationship, is it? YouTube has a ton of
information about add policies on their support pages. By the way, I've linked them
all below in the description just underneath the like button. So, those are the basic
complexities of CPM. But to be honest, we've only just started, that's because not all
CPM is treated equal, some channels get this,
whereas others get this. Let's try and answer why.
Well, let's start with
geographic location. The average American has
more disposable income than the average Indian. This leads to different products and services being advertised likely of a higher value leading to more expensive
ads and higher CPMs. People in the US age between 35 and 55 generally earn the most
and spend the most money, which again may lead
to higher CPMs for ads targeted towards that age group. Spending on health care
between the age of 1 and 64 is dwarfed by the 65 and over. 35 to 55 year olds spend the
most money on food at home. Now, I could continue
to scour the internet to find random facts about
who has the most money and spends it on what, but here's the thing. YouTube essentially knows the value of every single user on the platform and advertisers know
exactly how much to spend on each of those viewers.
YouTube knows that somebody in college who watches gaming content has
a lot less disposable income than a 40 year old who
enjoys travel vlogs. All which brings us back to this, a sample of some of the typical
CPMs for different niches, which as you can see,
from country to country vary greatly. By all means, pause the
video and take a closer look if you want to now. But the general trends suggest that health, business, investing, auto reviews, real estate, insurance,
and online marketing are the places to be when it comes to earning potential from ad revenue alone on YouTube. Now on top of the geographic location and the demographics of the viewer, as well as channel niche, you also have to consider seasonality.
Just as an example, CPMs for tech channels go through the roof as
we approach Christmas because it's the gift buying season and people are making purchasing decisions when they're watching tech content. However, the moment we
leave the holiday season CPMs tank and those channels
for a couple of months, but on the other hand, we're now into the new
year's resolution season. So food and fitness channels
see their CPMs rise.
Also from an advertiser's perspective, you have to look at this from
an inventory point of view. There are countless gaming channels, so advertisers can pick
and choose who they want and they don't necessarily have to spend that much doing it because there's so much availability follows advertisers. Whereas if you're the
only channel on YouTube that reviews bed mattresses, then you only need a
couple of hundred views to get unbelievable CPMs.
In short, if your passion in life is to earn lots and lots of
money beyond anything else, then you'll be able to make content on those topics that earn the high CPM. But for majority of us,
it's simply not the case. Ultimately for most creators you want to share your passion for a topic that's going to build
an audience around them. And because of that, you don't really have that
much control over your CPMs. And even then the amount you earn from YouTube ad revenue can change at the flick of a YouTube switch. As a first milestone, ad
revenue and CPM is nice but ultimately in the long-term to turn your YouTube
channel into a business, ad revenue, CPM is a
small icing on the cake. For most creators, your aim should be to wean
yourself off of ad revenue as soon as possible because essentially YouTube
has all the control.
There are many other sources of income that will bring you in so much more money and better yet, you'll have more control
over those sources of income. Ad revenue and CPMs are nice because essentially they're automatic. You don't have to do
anything, it's convenient. But with a little bit of
business acumen and some efforts, you can easily 10X, your YouTube income. And also to the left of CPM
in the YouTube analytics there is something called RPM which is to be honest,
a more valuable figure. And if you want to learn more about that check out the video over here. But of course no vidIQ
video would be complete without the code word, show me 55% of the money.
