How To Calculate YouTube Ad Revenue ? Youtube Earnings CPC RPM eCPM CPM Explained.
CPM is the cost to advertisers when ads are served a thousand times. So, from an advertiser’s perspective, CPM is the rate they are willing to pay to serve 1000 impressions of their advertisements on YouTube. When an advertiser bids $2 on their AdWords account, this means the advertiser is willing to pay $2 for every thousand impressions on the monetized YouTube channels.
When an advertiser checks his Ad Sense performance report, CPM is known as a Revenue Per Mile (RPM). According to Google, RPM reports are an advertiser’s impression-based revenue. Since ads are not displayed at even bundles of thousand impressions, all impressions served on the advertiser’s site, regardless of bid type, are combined and averaged in their report to show the advertisers effective revenue for 1000 impressions of the YouTube’s network.
The CPM metric is not designed for creators; it’s designed for advertisers. It’s how much advertisers pay, not how much creators make.
The world of YouTube is filled with words like CPM, eCPM, CPC, RPM, and many others. There are so many acronyms in here that you forget the functional value that you are going to get. Sometimes, acronyms confuse YouTubers as they mean different things depending on the context. For example, Cost per mile (CPM) is referred to as how much money it costs for the company to run advertisements on YouTube. Whereas eCPM or RPM is actually how much revenue a YouTubers are going to generate from monetization of these advertisements.
So, let’s discuss both factors:
From Youtuber's perspective, CPM rates are the average revenue of what a YouTube channel has generated for a specific period. As every country lodges a different bidding rate, Google will take an average out of a YouTube channel as its share of the revenue. In other words, CPM pays the affiliate for putting the banner or any ad on their high traffic page. So, for every thousand impressions, a YouTuber’s channel directs, he/she gets paid
How To Calculate CPM for YouTube
Marketers calculate CPM by using the following formula.
The Cost of every thousand impressions (CPM$) = marketing cost ($)/ Impressions Generated ( in Thousands).
Example – The total cost for a working campaign is $20,000 and the total estimated audience is 5,900,000.
Then the marketers CPM will be ($20,000/5,900,000)*1000 = $3.38/thousand views.
Why my CPM is decreasing?
Don’t panic when your CPM rates decrease. According to YouTube’s Content Head – Robert Kyncl; the key part of a growing platform is opening up the inventory, which enables more partners to succeed by monetizing their content. This can lead CPM’s to fluctuate in the short term, but it’s good for the partner ecosystem long term.
We are seeing this happen as overall partner viewership, revenue and subscriptions are on the rise. Many Youtubers have observed that there is a dreaded drop in CPM rates at the beginning of the year, as many advertisers shift their focus on Valentine’s Day.
What is eCPM/RPM?
As we mentioned above, eCPM (RPM) is what you actually make from the advertisements on your YouTube channels. YouTubers think that they are short of money due to their low eCPM stakes, but just because you are getting a $15 eCPM, do not mean you are going to get $15 for every thousand views.
What is means is you are going to get $15 on every monetized view.
NOTE that only 40 – 50% of all views are monetized in CPM.
RPM or effective CPM (eCPM) is the average revenue generated by a thousand views and is the relevant metric for a YouTube creator. If you are affiliated with a Multi-Channel Network, then these YouTube networks take their cut after this.
How to calculate eCPM/RPM?
If your videos received 3,000,000 views over the past 14 days, and you earned $5000 from ads during that time. To calculate your anticipated eCPM, divide your earnings by your monetized views, then multiply by 1,000.
In this case, your eCPM would be $1.6
How to improve CPM rates on your YouTube channel
To improve your CPM rates, you basically have to optimize every factor of your YouTube channel that is affecting monetization.
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0:00 YouTube CPM, eCPM, CPC, RPM Explained
0:57 CPM Explained
1:18 YouTube Ad Revenue
3:03 How To Calculate YouTube Revenue by CPM
3:43 Why CPM is Decreasing
4:53 What is eCMP and RPM
5:20 YouTube Ad Revenue Formula
6:02 How To Calculate YouTube CMP and RPM
6:33 Like The Video & Subscribe my Channel For More Info. Thanks
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