How to calculate YouTube CPM rates & factors for improvement

YouTube CPM rates are a crucial metric for content creators and advertisers alike, serving as a key indicator of how effectively their videos are monetized. In this guide by Mid-Man, we will explore the essential methods for calculating YouTube CPM rates and uncover strategies to enhance them.

TABLE OF CONTENTS

1. What are YouTube CPM rates?

Study YouTube statistics before creating and placing content on your channel to avoid unrealistic expectations about the cost of YouTube ads. This will help you accurately understand the current landscape. Additionally, analyzing your direct competitors’ channels can provide valuable insights into their development and strategies.

1.1. What is CPM?

CPM stands for cost per mille, meaning the cost an advertiser pays for every 1,000 impressions or “views” their ad receives on YouTube. It can also be referred to as CPT, which stands for cost per thousand. YouTube shares 55% of this ad revenue with content creators.

Video creators should pay attention to CPM because it indicates which topics advertisers value the most, guiding them on what content to create. Typically, countries like Ukraine and Serbia have some of the lowest YouTube CPM rates.

1.2. CPM rates vary according to the nation

CPM varies by geographical location. To increase revenue, aim to target your videos with high YouTube CPM rates by country. The list of countries with the highest YouTube advertising CPM is generally stable, but some can shift positions over time. The leaders include:

Germany
Australia
Canada
United Arab Emirates
Algeria
New Zealand

Conversely, countries such as Ukraine, Serbia, and a few others usually have the lowest CPM rates.

1.3. CPM rates vary according to the kind of video

We’ve already noted that YouTube advertising costs are influenced by content quality. However, some external factors are beyond the creator’s control. For instance, due to its niche, educational content generally commands higher CPM rates than entertaining content.

The type of video significantly impacts CPM because video advertising is closely linked to consumer demand. Consider the UK, a country with some of the highest CPM rates ($3–$6 on average).

Many British publishers use the Ad Exchange platform to sell media advertising, where CPM rates range from $3–$8 based on factors like location and engagement. Publishers can choose the type of ad to display, including in-stream video ads, which can be skipped but still generate revenue for impressions.

Pre-roll ads, which play before the content and cannot be skipped immediately, are common. Despite being potentially irritating, if presented engagingly, they can achieve CPMs of $3–$8. Similarly, mid-roll ads, which play in the middle of a video, can reach the same CPM range.

Outstream video ads, shown in ad spaces between images and other content, have a CPM rate of $4–$8 due to their high visibility and flexible placement. Native videos, integrated seamlessly into the channel’s content, can generate CPMs of $5 or more because they are less intrusive and align well with the channel’s theme.

2. How is YouTube CPM calculated?

Everyone wants to know how much they’ll earn from their YouTube videos, and understanding CPM calculations is straightforward. You can calculate your potential revenue using this formula:

(Total views / 1,000) x CPM = Total revenue

For instance, if your video gets 50,000 views and the CPM is $10, the total revenue would be $500. After YouTube deducts their 45% fee, you’ll receive $275. However, you are responsible for paying taxes on your earnings.

3. What advertisers pay for 1,000 ad views

CPM, or “cost per 1,000 impressions” is the amount advertisers pay each time their ad is shown 1,000 times. According to eMarketer, YouTube’s CPM ranged from $13.03 to $15.34 per 1,000 views between Q4 2022 and Q4 2023.

4. Who’s YouTube CPM is the highest?

Certain niches on YouTube are more lucrative than others due to higher view counts and advertiser competition. Some of the most profitable YouTube CPM rates by niche include:

Niches	Average CPM
How to make money online	$13.52
Social media marketing	$12.41
Finance and investing	$12.25
Educational videos	$9.89
Photography and filmmaking	$7.31
Cars	$4.23
Lifestyle	$3.47
Fashion	$3.13
Entertainment	$2.74
Cooking	$2.50

Additionally, countries with the highest YouTube monetization rates are:

Countries	Average CPM
Norway	$43.15
Germany	$38.85
Moldova	$29.50
Algeria	$24.50
Sweden	$18.18
South Korea	$17.00
Finland	$14.90
The United Kingdom	$13.75
Canada	$13.50
United States	$13.00

If you’re looking for direction, consider focusing on these topics as a starting point.

5. 4 factors to consider to improve YouTube CPM rates

Improving YouTube CPM (Cost Per Mille) rates is crucial for content creators aiming to maximize their ad revenue. Here are four essential factors to consider when working to boost your YouTube CPM rates:

5.1. Safe content

To attract high-paying advertisers and ensure your content is eligible for ads, focus on creating content that brands find appealing. Keeping your content within a PG-13 range is a good strategy, as overly mature content may deter advertisers looking to avoid potential controversy.

5.2. Audience age

If your video is aimed at children or if your channel primarily features “Made for Kids” content, your YouTube revenue is likely to be lower compared to targeting an adult audience. This is because YouTube is restricted in the amount of personal data it can collect from minors. As a result, advertisers prefer targeting adult audiences where they can better analyze their campaign performance.

5.3. Geolocation

Your CPM can also vary depending on the location of your viewers. Different countries have different average CPM rates based on advertiser demand in those regions.

For instance, videos targeted at U.S. viewers might have a lower CPM compared to those aimed at German viewers. CPM rates fluctuate, so it’s important to stay informed about which regions currently offer higher CPM rates.

>>> Read more: Best hashtags for YouTube Shorts for multiple niches in 2024

5.4. Seasonal changes

Certain niches experience increased activity at different times of the year. For example, product review channels often see a surge in activity toward the end of the year as people search for gift ideas. Similarly, fitness channels may experience higher views and CPM at the start of the year due to New Year’s resolutions.

FAQs

Is it possible to enhance your YouTube CPM?

Yes, you can enhance your YouTube CPM by exploring additional revenue streams. It’s advisable to diversify your income as a digital content creator. You might consider promoting products through affiliate marketing or selling your own merchandise. Sponsorships from relevant businesses can also provide a significant boost to your earnings.

What are the differences between RPM and CPM?

RPM, or revenue per thousand impressions, represents the amount you earn from YouTube advertisers after YouTube deducts its 45% fee. CPM, or cost per thousand impressions, is the total amount advertisers pay, which is shared between the content creator and YouTube.

Why does my CPM exceed my RPM?

Your RPM is lower than CPM because it reflects the amount you earn after YouTube’s 45% fee is deducted.

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YouTube CPM rates play a pivotal role in determining your channel’s profitability, making it essential to grasp both their calculation and the factors influencing them. By understanding these rates and implementing strategies that Mid-Man has compiled to improve them, you can maximize your revenue and ensure the sustainability of your content creation journey.