HomeYoutube MonetizationUnderstanding YouTube RPM to Understand Your Channel's Actual Revenue

Understanding YouTube RPM to Understand Your Channel’s Actual Revenue

YouTube is one of the most lucrative social media platforms in the world. Google AdSense also makes it easy to make money. If your viewers view ads in your videos, you will be paid.

Most YouTube creators have the same goal when they first start out: achieving monetization. Most often, creators use CPM (cost for 1,000 impressions) to determine how profitable their channel really is. There’s another way to determine the value of your content. Rob shows in the video how much YouTube pays to creators per 1000 views and what happens behind the scenes. Click here to watch it!

RPM is a more modern approach to monetization than CPM. Let’s better understand the differences.

RPM and CPM: Two metrics of monetary value

RPM should not be confused with CPM (cost-per-mille). CPM is a metric that focuses on advertising revenue only, while RPM (revenues per mille), the more comprehensive metric, includes all types of metrics. This includes ads, channel memberships and Super Chats as well as YouTube Premium revenue. RPM is a measure of what you could earn after YouTube’s cut.

YouTube will receive 45% of the revenue from your ads and 30% of the revenue generated by your fans.

The average RPM is $1.25-$2.5 in 2023. If you’re asking, How much RPM is good for YouTube, $2 or more is a sweet spot.

There are several factors that influence your RPM. These factors include:

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Geographic Location of the Viewer

The amount of money spent by advertisers varies greatly across regions. Advertisers are willing to spend more on viewers in major economic centers like New York or London than they would in places with a less prosperous economic climate. The reason for this discrepancy lies in the fact that economic conditions, local purchasing power, and cost of living vary from region to region.

Video Length

YouTube now allows more ads to be included in videos that are longer than eight minutes. This could increase revenue. Longer videos can lose viewer engagement. This is because they must balance the benefits of more ad space with the need to keep viewers interested.

Content and Niche Type

A variety of niches will have different RPM rates depending on the advertiser’s preferences and audience demographics. Finance and digital marketing channels, for example, often have higher RPM rates due to the lucrative nature and potential of their audience with higher disposable income. There are anomalies, like gaming and music channels that can outperform average earnings.

How to Boost your RPM?

Are you ready to give your RPM an upgrade? Here’s how:

  • Turn Ads on:Be sure to turn on ads in all formats, and at each eligible position of your videos.
  • Engagement is key: YouTube’s algorithm will favor you more if you receive more likes and shares. Guess what? A video that is popular will get more views and possibly a higher RPM.
  • Diversify your Revenue: Do not rely on advertising revenue alone. Exploit channel memberships and super chats to boost your RPM.

This will result in a better RPM and a more holistic channel.

What RPM Doesn’t Say

Smart creators are able to diversify their revenue streams outside of YouTube ads. They sell merchandise, use online courses or fan funding, engage in brand partnerships and partner with brands. Diversification allows creators to maximize their earning potential, and not solely depend on the fluctuating advertising revenue model.

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While RPM is a great way to get a quick snapshot of the financial health of your channel, it’s far from being the ultimate oracle. What’s missing in the RPM narrative, then?

  • Merch sales: RPM does not factor in merch sales if you are rocking the shelf.
  • Brand deals & sponsorships: How to cash in on brand collaborations? RPM will not include this. (Unless it is through YouTube BrandConnect).
  • Indirect Income Streams: Consulting services or speaking on the circuit? RPM ignores these sources of income.

This is where things get tricky. RPM is a mysterious box because it lumps in different revenue sources. Why might your RPM drop even if your views are skyrocketing? Not all views have ads. Your RPM may be increasing even if you haven’t seen any change in your view count, due to the addition of new Channel Members.

What is our advice? Do not rely on RPM alone to determine the financial health of your channel. YouTube provides a variety of analytics that can help you understand the fluctuations in RPM. You can use them to see the whole picture.

It’s Time to Get Your RPM Up!

The process may seem long, but improving your channel’s RPM will help you become a full-time content creator.

RPM is much more than a simple number. It’s an in-depth look at the earning potential of your channel. Next time you’re buried in analytics, pay attention to your RPM.

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