If you are a content creator or work with influencer marketing, you have definitely heard ‘CPM’ and ‘RPM’ being thrown around regularly. Instead of just nodding your head and pretending like you understand what CPM/RPM stands for and why it's so important - we put together a quick overview of everything you need to know about these ad revenue analytics. 

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CPM: Cost Per Mille; The cost per 1000 ad impressions before YouTube revenue share. It is essentially the cost an advertiser will pay for every 1,000 impressions or views their ad receives on YouTube. 

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RPM: Revenue Per Mille; It represents how much money a YouTuber earned per 1,000 video views. The RPM gives YouTubers an accurate amount for how much they will be paid for running ads on their content (it’s lower than CPM because it deducts YouTube’s fees). 

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In short, it is important for YouTubers to understand and be attentive to both CPM and RPM in order to measure their earnings. Advertisers are much more concerned with CPM - how much it will cost them to run an ad on a specific channel, and RPM is the amount the creator will get paid for running the ads (it’s lower than CPM because it has already deducted YouTube’s cut). 

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Now, let’s go more in-depth

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What is YouTube CPM? 

The CPM is the cost per 1,000 ad impressions before YouTube revenue share. Advertisers focus on this revenue analytic as it calculates how much it will cost the company to run an ad on a specific channel. An ad impression is counted anytime an ad is displayed at any time in the video. 

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The CPM:

• Advertiser-focused metric
• Includes on revenue from ads and YouTube premium
• Includes only views from the videos that monetized (ads were shown throughout the video)
• Earnings before revenue share

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Why is CPM important for YouTubers?

Content creators get a cut of what advertisers pay when an ad appears on your video - the more an advertiser pays to appear on your video, the more money you make. Although the CPM amount doesn’t show you the definitive amount you will be pocketing, it gives you a pretty good idea of how valuable advertisers find your videos and audience for achieving their ROI (return on investment). 

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It’s critical to remember that the CPM reflects what advertisers will pay per 1,000 views, not what you will earn. 

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How do you calculate CPM?

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What are some factors that affect the CPM?

Each type of niche on YouTube has a different CPM, but being a non-advertiser-friendly channel is a quick way to lower your channels CPM - here are some factors to consider:

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1. Audience age: Advertisers are interested in targeting viewers with money to spend. So, if you are creating content for audiences that are less likely to whip out their wallet - your channels CPM will be lower. For example, children-focused channels. Not only are children less likely to spend money on ads, YouTube has limited the amount of personal data that can be gathered by minors - and advertisers want data so they steer clear of these types of channels.
2. Geolocation: The location of your viewers is crucial for advertisers. Each country has a different CPM average based on the number of advertisers bidding for that area and the disposable income of the people in that country. For example, your channel may be bringing in tens of millions of views, but if 99% of your viewers are from India, your CPM will be lower. On the other hand, if your videos are getting close to a million views and most of your viewers are located in the US, your CPM will be higher.  
3. Seasonal changes: While some categories on YouTube create much more evergreen content, such as history-focused channels or general knowledge channels, others will have high activity during certain seasons and become less popular the rest of the year. Channels that create evergreen content will have a higher CPM because advertisers are more confident that their ads will continue receiving views. 

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What is YouTube RPM?

The RPM is a metric that represents how much money a YouTuber has earned per 1,000 videos views. This gives creators an accurate representation of how much money they make on YouTube after the video-sharing platform takes its cut (the average channel will take 55% of the ad revenue generated while YouTube takes the other 45%). 

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The RPM:

• Creator-focused metric
• Includes total revenue reported in YouTube analytics including ads, YouTube premium, channel memberships, Super Chat, and Super Stickers
• Includes total number of views from YouTubers’ videos, including the ones that did not monetize
• The actual revenue earned after revenue share

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Why is RPM important for YouTubers?

What YouTuber doesn’t want to know how much they can earn on YouTube? It also gives creators a really good understanding about how effective their monetization is on the platform. This helps creators identify ways to improve and optimize their monetization strategy. 

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At first, the RPM amount may look quite grim - especially compared to your channel's CPM - but it reflects the actual amount of your ad revenue income. At the end of the day, you want to know how much money you are making from the content you are creating - that’s RPM. 

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How do you calculate RPM? 

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Creators can check their RPM on YouTube’s channel analytics, for example: 

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In order to calculate a creators YouTube ad income, plug the numbers into this calculation:

How do you increase RPM?

1. Turn on monetization on all videos and ad formats
2. Consider other monetization streams, such as livestreams and premieres
3. Introduce channel memberships

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However, RPM does not give you insight on how much money you generated through brand deals and sponsorships - that’s where our YouTube sponsorship calculator comes in handy. 

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YouTube sponsorship calculator

Using our YouTube sponsorship calculator, you can not only deduce how much it would cost to sponsor a specific YouTuber, but about how much the YouTuber earns via brand deals. 

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Recommended article - YouTube sponsorship calculator: How much to charge your YouTube channel

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Filling out our YouTube sponsorship calculator, you may have noticed that unlike many other calculators available across the web, we take into account projected views, placement of the ad, and YouTube category. Why? Well, these elements share a ton of information - 

• Projected views: Our algorithm’s goal is to determine how many views the next video on that channel will receive within its first 90 days. This helps brands better understand how a video on that channel with perform if you booked a sponsorship with them today. The algorithm offers a conservative estimate which favors advertisers so it analyzes the expected reach of any channels you are interested in booking. By plugging in the channel’s URL, its projected views will be automatically calculated and included in the computation. 
• Placement of the ad: Each placement - pre-roll, mid-roll, post-roll - has its pros and cons, as well as, different price tags. In short, usually mid-rolls are more expensive than post-rolls. So, its important to take this into account when understanding the rate of a specific creator. 
• Category: Type of content the channel focuses on; It is crucial to take this into consideration when negotiating partnerships because it clearly highlights the audience profile, brand profile, and brand variety. Also, each content category is priced differently - for both brands and creators, it’s crucial to start the negotiation process with this clearly highlighted. 

Recommended article: Understanding YouTube sponsorship rate

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YouTube is a great platform for sharing content you created while getting paid - it’s one of the most lucrative revenue streams for all-types of content creators. In order to make money, you need to make sure that the content on your channel is attractive for both viewers and advertisers. The key is to monitor your CPM, keep an eye on your RPM and use both these ad revenue analytics to understand your channel’s worth and how to improve your videos in order to better optimize your videos.  

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Are you a brand ready to find influencers to book for your campaign? Get started now!

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