How to Calculate and Increase Your YouTube CPM

How to Calculate (and Increase) Your YouTube CPM

With over 2.5 billion monthly active users, YouTube is ranked as the most popular video-sharing platform in the world. Due to its ability to connect with viewers, YouTube marketing has become one of the most widely-used and effective strategies for many brands. As the platform is gaining more momentum, it is projected to have over 2.8 billion users by 2025, attracting more content creators to reach more people, make an impact, and profit from their effort in video content creation. 

Although there is a number of ways to earn from YouTube, the most substantial portion of this earning comes from YouTube advertising. And, if you want to use this opportunity and get the most out of it, the most important measure for you to track will be YouTube CPM. To amplify your YouTube channel’s capacity to generate revenue, you need to understand what YouTube CPM is, how to calculate yours, and the strategies you need to increase it. And in this article, we will provide you with a breakdown of all these essential details.

With over 2.5 billion monthly active users, YouTube is ranked as the most popular video-sharing platform in the world.
Source: Statista

What YouTube CPM is and Why You Should Care?

CPM stands for Cost Per Mile, where Mile is Latin for thousand. It is also known as CPT or Cost Per Thousand. CPM is commonly used in media advertising. It is essentially the cost of advertising that the advertiser needs to pay for every 1,000 people (or impressions) who are exposed to the ad. 

When a YouTube channel becomes monetizable, the content creator can place ads before or during the video or on the page itself. After that, the YouTuber can start earning a portion of the CPM paid by the advertiser for each ad. Since YouTube handles the communications and negotiations with the advertisers as an intermediary, it keeps a percentage of that CPM. Note here that you will not get paid unless your viewers watch the entire ad, or at least for 30 seconds if the ad is long.

If you want to build a career on YouTube, you will need to understand how to attract ads with high CPM. These ads are commonly placed on high-value content. Therefore, using CPM metrics analysis, you can identify how your content is valued and which areas you can improve upon. For example, if your niche is baking, and you find “baking cookies” videos are receiving the highest CPM, you can create more content relevant to that. Moreover, if YouTube keeps placing a particular advertiser’s ads on your videos as your niches best complement each other, you can reach out to them personally and discuss a more mutually profitable partnership. 

As you already understand, CPM rates greatly fluctuate in different videos. Currently, the average YouTube CPM is $1.5 to $2.5. However, as a professional YouTuber, your goal should be to earn higher than the average CPM to make the platform one of your primary earning sources. Some successful YouTubers have revealed that CPM rates can go as high as $300!

How to Calculate YouTube CPM?

You can calculate YouTube CPM through a straightforward formula. All you need to do is divide the total advertising campaign cost by the total number of views and then multiply the result by 1000. Here, the total advertising cost is how much an advertiser is paying YouTube to run their ads. The total number of views or impressions is the number of people YouTube shows the ad to. The formula is as follows.

How to Calculate YouTube CPM?

(Total advertising cost / Total number of impressions or views) x 1000 = CPM

For example, if you identify that an advertiser is paying $1000 as the total cost, and YouTube shows the ad to 100,000 viewers, then the CPM calculation will be as below.

($1000 / 100,000) x 1000 = $10 CPM

6 Ways to Increase Your YouTube CPM

The number of YouTube channels aiming to be monetized is increasing rapidly every year. As a result, YouTube has lots of advertisement spaces to sell. However, the number of advertisers is not growing at the same rate. This supply and demand gap intensifies the battle among channels to grab the most ad revenue by getting high CPM ads. This gap is also the reason for having less CPM than before.

The best way to maximize your YouTube revenue is to optimize all the variables that are relevant to the monetization of your channel and improve your YouTube CPM rate through that. Below, we have discussed six strategies to apply when you want to boost your YouTube CPM.   

1. Choose the Category Carefully

Based on the category you pick when publishing a video, YouTube pairs the video with relevant ads. Therefore, if you are not careful and attentive in choosing the right category, it may end up in a low CPM category/niche or even geographic region. Also, if the content is not relevant to the category chosen, it will not be identified as high-value content, which again will leave you with low CPM ads. 

For example, you created and published content featuring a video game. However, let’s say you unintentionally chose the “Autos & Vehicle” category. Your CPM on that content will be significantly low because of two reasons. First, YouTube will place ads relevant to the automobile industry on your video, which is not what your content is about. As a result, the content will not be of high value. Second, the target market of your gaming video is gamers, which are not commonly the target audience of automobile ads. Consequently, the ads will not reach the intended audience, be skipped, and you will not be able to earn much.

2. Focus on Metadata

To increase your CPM rate, you will need to attract more and more viewers to your content. The more audience you have, the higher your CPM rate will be. And this is where optimizing the metadata of your videos can be significantly rewarding. The metadata of a video includes the title, tags, and description.

Your goal is to make your metadata relevant to your video content, while keeping your target audience in mind. Optimize the metadata elements by making them attractive, appealing to exactly what your target audience is looking for, and highlighting the USPs of your content. Once appropriately optimized, your metadata will help YouTube to index your video better. Therefore, your video will appear more in YouTube search results and recommendations, boosting your views exponentially. And all these will lead to high CPM rates.

Focus on Metadata

3. Increase the Video Length

The more ads YouTube can place on your content, the higher CPM you can earn. A video needs to be at least 8 minutes long to show ads in the middle. Therefore, by creating longer videos, you can earn more CPM. However, there are two aspects that you need to be cautious about. 

First, adding too many mid-roll ads can make your viewers reject your content, as such action may cause them to question your integrity. And second, unless they are highly engaging, long videos struggle to retain the viewers till the end.

This brings us to our next topic of discussion – watch time. Your channel’s watch time is the total amount of time people spend watching your content. The higher the watch time or viewership, the more valuable your channel is. Your content and channel will be ranked based on your subscriber base and viewership. If your total subscriber base is 1M+, you will have a decent CPM-paying group of advertisers. However, if you have 10M+ subscribers with very high watch time, you will get a different set of advertisers, who are paying the highest figures of CPM, bidding for you. 

4. Include Intriguing Thumbnails

Your video’s thumbnail visually represents what it is about and why it may be interesting to a target audience. Many creators use just a snapshot from the video as a thumbnail. However, you can customize your thumbnail to include interesting photos, intriguing texts, and other attractive elements to pique the viewers’ curiosity. This way, you will get more views and, consequently, higher CPM. Just remember to keep it clean, precise, aesthetically pleasing, and tasteful.

However, many content creators abuse this strategy and use thumbnails as click baits. You need to remember that the thumbnail is a part of your metadata, and you need to optimize it by keeping the elements as an honest representation of your content. Otherwise, viewers may click on your videos, but they will not watch them long enough to be counted as a view. Moreover, your channel may be reported to YouTube for misleading thumbnails. In both cases, your channel and content will substantially lose their value. As a result, you will earn very low CPM, or worse, get demonetized and earn nothing at all.

 Include Intriguing Thumbnails

5. Come up with Catchy Titles

The title of your video should be developed with the utmost care, as this is what intrigues your viewers to click on it. To attract more viewers and increase the CPM rates, come up with a catchy title that piques the target audience’s curiosity. Just like thumbnails, maintain integrity when coming up with an appropriate title that best represents the content of the video.

Search Engine Optimization or SEO is also used in YouTube’s search engine. To be ranked higher in the search result and get more views, find out what are the most common keywords in your niche and include them in your title and description. Also, while making your title catchy, keep it short and direct. For example, if the most popular keyword in your niche is “mindfulness,” you can create a video on mindfulness practices and keep the title “10 Most Effective Mindfulness Practices for Stress Relief.”

6. Create Authentic and High-Quality Content

The channel with the highest quality content will ultimately get the highest CPM rates. To make your videos high-value, you have to deliver the best quality content on topics that are in demand. While producing such videos, keep your target audience in mind and create authentic content. 

Advertisers are not interested in sponsoring unoriginal, bluntly copied content, as such videos are of extremely low value and harmful to YouTube’s ecosystem as well as the brands’ image. Moreover, when the audience detects rehashed content, they immediately reject it. And as information spreads faster than wildfire today, figuring out such deception does not take much time. Therefore, it is important to maintain authenticity, integrity, and quality when making YouTube videos to earn higher CPM as well as your viewers’ trust and respect.

Create Authentic and High-Quality Content

Should You Explore Alternatives to CPM?

While CPM is the most popular income source on YouTube, it is not the only one. In fact, once you reach a certain level of popularity as a content creator, it is recommended that you look for other earning opportunities on the platform. This is because they can offer you higher revenue streams and complement or even enhance your CPM earnings. 

For example, if your channel has a substantial fan base, you can start selling merchandise. You can also offer affiliate and influencer marketing services. Furthermore, you can start offering paid classes on something you have expertise in. For instance, if your channel is about cooking and you have a sizable follower base, you can start offering paid cooking classes. So, once you get the hang of managing your CPM earnings and growing your channel, look for other alternatives to maximize your earnings from YouTube. 

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