At Fullscreen, we often hear questions from creators about CPMs. What is CPM? How do CPMs factor into YouTube earnings? As a creator, do you have any control over CPMs?
CPMs are widely misunderstood, and the term is often misused. So this week we’ll cover the basics. Over the next couple weeks, we’ll share with you how CPMs change over time and things you can try to boost them.
What is CPM?
CPM is actually a stat meant for advertisers, not creators. CPM stands for “cost per mille” (mille means “thousand” in Latin, so just think “cost per thousand”). CPM is the amount an advertiser pays to have its ads served against videos 1,000 times. Each time an ad on a video runs completely, it’s called an impression.
But the relevant stat for creators is actually RPM (revenue per thousand)—the average amount you earn for every 1,000 monetized views your videos generate. Confusingly, YouTube typically refers to RPM as eCPM (effective CPM), so we’ll use “eCPM” from here on out.
In short: if your YouTube earnings report shows an eCPM of $4.40 for a given period of time, then you earned $4.40 per thousand monetized views during that period, on average. (Important to note: that’s $4.40 before YouTube takes its cut of ad earnings.)
What determines your eCPM?
The eCPM you see in your YouTube earnings report is determined by the advertisers who run ads against your videos. eCPM can vary for a variety of reasons:
- Seasonality: If advertisers’ demand for ads is strong, your eCPM will be higher. For example, you’re likely to see higher earnings in December (when advertisers are spending heavily on holiday campaigns) and lower earnings in January (when advertisers have less demand for ads).
- Ad type: The eCPM in your report is typically an average across all the different ad units that YouTube offers. Some advertisers may choose to pay per thousand views, while other advertisers choose to pay only when a viewer takes a specific action on their ad (like clicking on it).
All these factors affect your earnings. We’ll talk about them in more depth next week.
How can you calculate your eCPM?
To calculate your eCPM over a specific period of time, you’ll need to know your views and your revenue for that period.
If your videos received 20,000 views over the past 14 days, and you earned $70 from ads during that time. To calculate your anticipated eCPM, divide your earnings by your monetized views, then multiply by 1,000. In this case, your eCPM would be $3.50:
$70 ÷ 20,000 × 1,000 = $3.50
Keep in mind that not all views are monetized—especially views generated on mobile devices. If a low percentage of your views are monetized, your eCPM will seem low. If you have access to YouTube’s analytics, look at your Monetized Playbacks (rather than your Views) to get a more accurate eCPM estimate.
Next week, we’ll look at why season and demand can cause fluctuations that impact eCPMs. Let us know what questions you have!
Follow Howard on Twitter @IceflowStudios