How does YouTube work?
Understanding YouTube can be a bit overwhelming. That’s mainly when you are just starting out as a YouTuber. So, before diving into what YouTube CPM is and how to increase the CPM, let’s understand how YouTube works.
YouTube is a platform where you publish your content as a YouTuber. Likewise, advertisers make use of YouTube for advertising their product/service. Different ads show up while you’re watching a video on YouTube. These ads are usually embedded within videos at the start. Depending on the size of video these ads may also appear in the middle of the video.
Advertisers need to pay a certain amount of money for advertising their content on YouTube videos. As a YouTuber , you do not need to worry about how and which ads to show on your video. YouTube does it for you. In doing so, YouTube also takes a fair share of earnings.
What is CPM?
CPM is an acronym for Cost per Mille where “Mille” is a latin word for thousand. So, CPM is a Cost per Thousand view. It is the cost an advertiser pays per 1000 views of their ads. An advertiser pays this cost directly to YouTube from which it takes its fair share and provides the remaining to the content creator.
It is estimated that YouTube takes 32% of the CPM and provides creators with the remaining 68% of the CPM. So, for instance, if the CPM is 10$ for 1000 views, Youtube takes 3.2$ as its share and provides you the remaining 6.8$. However, that’s not the case always.
The CPM that the content creator gets depends on several factors and is highly varying. YouTube pays anything from 1$-10$ and that’s a lot of variation. Given below is a list of factors that affect CPM.
Factors Affecting CPM
It is important to know that YouTube pays its creators differently depending on the location. If you’re a creator from the US creating content for viewers only from the US, you’re likely to be paid from 5$-8$ USD per 1000 views. That’s because of consumer behaviour. Other countries like Italy, France, Canada, Australia, Brazil are some top tier countries.
You might find it strange but it’s true. Based on consumer behaviour, Desktop and Mobile views are paid differently. Likewise, iOS and Android views are also paid differently. Studies on consumer behaviour suggest that the IOS users are likely to purchase more than a typical android user.
Type of Content
The type of video you create for your channel also determines your earning. Depending on your content and its competitiveness in the market, YouTube pays the content creators differently. The use of right keywords and high CPC competition can increase your CPM.
Time of the Year
Depending on the time of the year the advertisers spend differently on advertisements. This causes fluctuation in your YouTube earnings too. For example, during the end of the year which is the time of holidays, advertisers spend a lot on advertising. Likewise , during January the advertisers are busy making advertisement plans for the whole year and are likely to spend a lot less comparatively.
Lastly, it is also equally important to understand that the advertisers have to bid to show their ads on your content. So, if your content is ideal for advertisers, the CPM is relatively high as only the highest bidder gets to showcase their ads.
How to Calculate CPM?
A simple formula to calculate the CPM looks something like this:
CPM = (Cost of advertisement / total number of impressions) x 1000
By now, you must have understood that CPM is not what you earn from YouTube. In fact, RPM which is an acronym for Revenue Per Mille is what calculates your earning. It is the amount you get paid after YouTube takes it’s cut. To calculate RPM use the formula:
RPM= (current revenue / total number of video views) * 1000
With this formula, you can calculate the RPM and get a rough idea of how much you can actually expect to earn. However, as said earlier there are other factors that can impact your earnings.
How to Increase CPM?
Though Youtube is stricter now than ever, you can try these techniques to increase your earnings from YouTube. These techniques have been tried and tested and found to be very useful.
Play More Ads
YouTube acts as a mediator between you and advertisers and finds the right ads for you. It also gives you a certain level of control over the ads as a content creator. There are different kinds of ads like: In-stream ads, In-display ads, and In-slate ads. To increase your ads revenue, increase the number of ads shown in your video by adding one ad at the beginning two in the middle and one at last in a 10 minute long video.
Unlike popular belief that increasing ads are harmful to the channel, YouTube ads are a bit different. It is so because the YouTube algorithm works a bit differently. The more you add ads to your video, the algorithm recommends your video more often. Just like us, YouTube also gets its fair share showing ads. No wonder, it recommends the video more often.
Find Sponsors and Advertisers
Sometimes you may not be earning as much as you think you should. This is the case with many YouTubers. These channels are YouTube channels whose earnings do not co relate with the popularity. In such conditions, you can reach out to the advertisers or sponsors on your own.
If you choose to advertise contents directly on your channel, you can make a good revenue out of it and wouldn’t even have to share with YouTube. For that, identify the niche of your content and use the right keywords. This can attract the right audience and in turn attract the right advertisers for you.
Add Affiliate Links
Affiliate links can be the links for any product sold online. As a YouTuber, you can advertise a product and embed their affiliate links in your video description. If anyone makes a purchase through this link, you will receive a certain commission for each sale.
This is a simple and stable way for earning passive income. The best part is, you can get an affiliate link for any product by simply signing up for an affiliate program. Identify your niche and it will help you advertise the best products and make your viewers happy.
Work on Your Content
This is the ultimate strategy for increasing your YouTube earnings. The simple act of working on your content can increase your earning drastically. By working on your content, we mean working on SEO of your content. Out of endless possibilities, here’s a list of things you could do to increase your earnings.
- Target strong Keywords
- User engagement and watchtime
- Create content frequently
- Create long contents upto 10 mins long
- Effective use of meta tags
We hope this article has simplified your understanding about YouTube CPM. It also suggests ideas on increasing your CPM(or earnings from YouTube). Once you understand the working mechanism of YouTube, you can use special SEO techniques to increase your earnings and find some alternatives for earning more.