How Much Do YouTubers Make? YouTube CPM & RPM Metric

For most of the world, the amount of money you can make on Youtube is not known for sure. All you know is it can be a lot. You hear of how many famous Youtubers make do in life from their videos. How does Youtube decide what to pay them each month? The Youtube CPM metric has been used for advertiser rates for years but now Youtube is unveiling a metric for its Youtuber stars.

This break down is crucial to helping the creator better understand their channel’s strengths and weaknesses.

Youtube has recently made an addendum to its payment system in an effort to make it easier for creators to find their best strategy.

Let’s look at the range of pay you can find across the channels of Youtube’s average consistent creators.

What Does The Average Youtuber Make?

Youtube calculates payment and they split the revenue 68% to 32%. The creator receives a higher percentage with 68%. This seems generous but remember the Youtubers do the majority of the physical work and YouTube just has to maintain the software and deal with advertisers.

How much Youtubers are paid is different between channels because certain niches pay more money than others. Creators in profitable niches such as finance, lifestyle, health and wellness make more than channels with videos to make people laugh or full of kitten videos. Since this is the case this article is focused purely on what the average pay is.

Beginner’s Revenue

One thing you have to realize is that a creator doesn’t make hardly any money in the beginning. Really they make nothing from advertising as you need to generate a $100 in revenue in order to get paid from Adsense. It’s a hard life but everyone has to start somewhere.

How much money an advertiser pays ranges anywhere from $.11 to $.30 cents for every ad impression on a video and that amount is determined by the profitability of the video’s niche. It doesn’t seem like a lot until you realize a lot of big creators get millions of ad views a year.

Advanced and Intermediate Revenue

If a creator received 250,000 ad impressions over a year period at $.25 a view the advertisers’ money would pay $62,500. If you give %68 of that to the Youtuber he makes $42,500 for the year.

Let us say the same scenario played out but on the low end of the spectrum with $.11 cents a view. The advertiser’s money would be $27,500 and the average Youtuber would get $18,700. Someone with this amount of views might consider starting a Patreon account in order to bolster their monthly income.

It’s hard to gauge the subscriber count according to the ad pay because there are so many factors that will affect the number of ad views. It depends on the niche, the audience, and the number of videos that are created.

Most creators don’t do this well in ad views unless they go viral or are above average in subscribers. The success as a Youtuber really starts at more than a million subscribers. This is when they become more well known and are able to get all the extra brand sponsorship money and merchandise sales. A million subscribers usually mean it is worth quitting the day job and working full time on videos.

I’m only going to explain the process of making money from advertising in this blog as the other two ways of making money deserve a blog post of their own.

YouTube’s Advertisement Pay System

Adsense

Instead of using the acronym PPC Youtube uses CPM and just recently RPM.

CPM

While the enigma of Youtube’s salaries was still a secret, Youtubers’ pay metric was only known as CPM. CPM, Cost Per Mile, is the cost advertisers pay for every 1,000 ad impressions on a channel before Youtube takes its share of the pie. An impression is when the ad shows for 30 seconds on the user’s screen.

Youtube CPM is a metric for advertisers that show how much money they have to pay to show ads on any given channel.

If a video displays only one ad then Youtube pays the creator with the amount the advertiser paid divided by the number of impressions. Then multiply that number by 1,000 to get the full CPM payment value before YouTube’s split.

Playback-based CPM

Youtube uses two different kinds of payment metric, CPM and play-back CPM. While CPM focuses on the cost per number of impressions of a video. Play-back CPM is the cost per playback when more than one ad shows to the user in a video.

Videos vary in the number of ads shown depending on many factors, including length. On any given video if more than one ad is on display Youtube will charge the advertiser with the playback-CPM metric.

This means that instead of dividing by impressions they divide the advertiser payment by the number of times the video plays to the user. Then they take that number and times it by 1,000 to get the playback-CPM rate to pay the creator.

There are usually more impressions then playbacks so playback-CPM results in more revenue for the creator. This makes sense because more than one ad plays in each video.

CPM and playback-CPM is an advertiser based metric. It allows them to know the price each add impression will cost. It is a metric that shows the amount of money before YouTube takes its share of the income.

RPM

Youtube has a new secret weapon for paying its content creators. It’s RPM or Revenue Per Mile, and it is made custom for Youtubers.

RPM allows the creator to see their total revenue and where each amount is coming from on Youtube. It doesn’t show all the creator’s revenue as any external sponsorships aren’t through Youtube.

RPM includes Adsense, channel memberships, Youtube Premium, super chat, and super stickers revenue. To rise RPM levels the creators must follow Youtube’s requirements to monetize as much of their content as possible. This can only happen if the Youtubers enable the buttons to monetize all videos, such as in the image below.

Allowing ads to display in all eligible positions of a video increases the chance for more than one ad and the playback-CPM rate. For instance, having videos longer than 10 minutes will increase the chance of a midroll add position resulting in multiple ads.

Benefits of RPM

The creators can see the total amount of video views from both monetized and unmonetized videos. This lets them know which videos monetize and the ones that don’t so they can plan to maximize revenue.

This should help Youtube obtain more monetized videos. Showing a Youtuber how many views aren’t getting ad revenue will increase the chance of them following the monetizing requirements. Smart entrepreneurs should always want to maximize their profit.

A creator can determine how well their strategy is working for their channel by watching their RPM. If it goes up they’re on the right track and if it goes down they need improvement in their content.

By far the greatest benefit of RPM will be the ability to see analytics of all aspects of Youtube revenue. CPM will stay as the advertiser’s favorite tool at Youtube while the RPM is for helping the Youtubers know how much they make.

RPM is a creator based metric. It allows the creator to better evaluate how well their channel is doing after taking their share of Youtube’s income.

RPM Thoughts

Seeing what their strengths and weaknesses are will enable creators to plan better strategies. RPM will increase the amount of money made by creators and Youtube. It’s a smart move on the company’s part and they say they are committed to better transparency within their payment system.

No longer is the Youtube payment system a mystery. A user interface that displays all monetization opportunities will help new creators decide the direction their channel should go in.

Originally published at https://profitpeep.com on July 12, 2020.