If you’re reading this, you already know your ABCs – huzzah! – so why not learn YouTube’s? Here we’ll cover the differences between some commonly confused YT jargon: CPM, eCPM, and RPM. What are they, and how are they calculated? What impact do they have on earnings, and what can you do about it?
CPM: The Advertiser’s Yardstick
Let’s start with the root of it all: CPM, which stands for “cost per mille.” In layman’s terms, CPM is the cost for an advertiser to serve an ad 1,000 times (mille is Latin for “thousand”). Every time an ad is served an impression has occurred, regardless of whether a user actually views that ad or clicks on an ad link. CPM rates vary on YouTube, but the average is approximately $7.60. Creators aren’t typically concerned with this stat, but stay with us – it’s the basis for the lingo that follows.
eCPM/RPM: The Creator’s Take
Revenue per Mille (RPM), which YouTube refers to as eCPM, or “effective cost per mille,” is the average earnings from every 1,000 monetized views a creator’s video generates. In other words, if an advertiser pays YouTube a gross value on a CPM basis, the creator’s share is the net earnings, or eCPM/RPM. So if a creator’s eCPM is $5.50 in a given month, she earned $5.50 for every thousand monetized views on her videos. Make sense? Let’s keep going…
How is my eCPM calculated?
It all comes down to the advertisers running their content alongside yours. The range in eCPM on YouTube boils down to quality of content and market seasonality. For example, holiday season in winter months typically results in higher ad demand and thus higher eCPMs.
Calculate your eCPM yourself. Let’s say you want to know your eCPM for a 28-day period. Your stats show you’ve earned $175 from ads run on videos that received 50,000 views during that time. To figure out your eCPM, take your earnings ($200) and divide by your monetized views (50,000). Because of that nifty little “m” for mille, don’t forget to multiply the result by 1,000. In this example, your eCPM would be $4.00.
(earnings / monetized views) x 1,000 = eCPM (in $)
($200 / 50,000) x 1,000 = $4.00
Assessing your eCPM
You’re a math whiz! But how do you know what’s high and what’s low here? Your eCPM will seem low if the percentage of your videos that are monetized is also low. And remember that not all of your videos’ views are monetized. The YouTube Analytics Monetized Playbacks compare metric is a great tool for accurately estimating your eCPM. Now that you’ve mastered the building blocks of the YouTube ABCs, go out and maximize those numbers with some stellar content! For more YouTube tips and news from Bent Pixels, be sure to keep up with our blog!
by Maggie Altergott