Network Market Research: CPM Study 1
As a YouTube network owner I discovered an extremely huge drop from my December earnings to January earnings. To be exact my network had a 63.51% profit difference between these two months. So I decided to do a little digging and figure out why this drop occurred and how to avoid or protect my network in the future. For this study I examined four medium to small YouTube networks that all generated around the same amount of income although their stats were more diverse. In this study I’m not going to release the names of the networks evaluated but I will release the number of channels they have within their network and how much they've made from October 2014 to January 2015. One thing to note is that this study is based off of actual money earned by the network, this number could fluctuate based on the diverse rev-shares between partners and the possibility of content aggregated (sponsor) networks.
Network #1: 399 Channels as of February 22nd 2015.
October 2014: $3,516.47
November 2014: $2,960.04
December 2014: $5898.94
January 2015: $3,689.20
Network #2: 16,101 Channels as of February 22nd 2015.
October 2014: $1,678.08
November 2014: $1,778.87
December 2014: $2,238.74
January 2015: $1,272.87
Network #3: 2,848 Channels as of February 22nd 2015.
October 2014: $2,630.68
November 2014: $2,375.84
December 2014: $3,527.58
January 2015: $2,162.48
Network #4: 137 Channels as of February 22nd 2015.
October 2014: $2,897.92
November 2014: $3,007.60
December 2014: $3813.25
January 2015: $1,391.46
Every single one of these networks are at least less than a year and a half old. As you can tell by looking at the numbers (above) there seems to be a spike in December as well as a drop in January. From my knowledge of ad-revenue and advertising as a whole, December is a high volume month for ads. It’s the month of the major holiday season and people tend to do most of their shopping during this month, thus leading to advertisers wanting their ads up. With the high volume of ads the CPM rises thus driving much higher ad-revenue. Once January hits, people are unsure about how the market will turn out and they tend to not advertise as much which explains the drop in CPM thus the drop in ad-revenue. So with the spike of CPM in December causing more than average ad-revenue and the drop of CPM in January causing less than average ad-revenue, you now understand that if your numbers are high in December it’s not because of growth and if your numbers are low in January it’s not because of an internal issue.
Now the question becomes how can I prevent this fluctuation of CPM; or, how can I use it to benefit me instead of hurt me. Ultimately you’re not going to be able to prevent this, it’s the way advertising and people work. You can, however, plan ahead and know that December’s going to be a really good month and January’s going to be a really bad month. Budget accordingly and understand that it’s just human nature and know that you didn’t make a mistake and your partners aren’t all of a sudden dropping views.
This study was preformed by myself, William Haddock, with some help from some friends / former colleagues who wish not to be named. Ultimately it was a good question that popped up and we a subject we wanted to better understand. As more information and more numbers flow in, I’ll definitely continue keeping track of other popular months for CPM spikes and I’ll be publishing more case studies and user reports as the years go on. My ultimate goal is that you read this, learn, and don’t make the same mistakes in seeing a huge drop in CPM and questioning yourself, your staff, and your partners.
