YouTube is finally letting creators know exactly how they’re making money on YouTube
There are a lot of variables, and now YouTube is finally gathering all of those numbers in one place and giving that information to creators in the form of
RPM, or revenue per mille, is a take on the standard metric YouTube creators already use referred to as CPM, or cost per mille (sometimes referred to as cost per thousand).
Although the two sound similar, they do two different things.
RPM is much more useful for creators who are trying to grow their channels and figure out where their monthly income is coming from.
CPM measures the cost of every 1,000 ad impressions before YouTube takes its share of revenue, but RPM shows a creator’s total revenue (both from ads and other monetization areas)
This doesn’t represent a change to how much creators are making.
Rather, it helps creators better understand where they’re making their money and how the revenue share breaks down.
“It’s kinda been like you get a paycheck every month, but you’re not exactly sure how it came to that number,” Matt Koval, a former YouTube creator who now works
as the platform’s head creator liaison, said on Twitter.
Basically, if CPM is an advertiser-focused metric, RPM is tailor-made for creators.
For example, RPM includes the total number of video views, including videos that weren’t monetized.
This is designed to show creators how much they might be missing out on revenue-wise from videos that generate views but aren’t eligible for monetization and changes they can
“Whether RPM goes up or down, it’s a good indication of things that are working or not working in your revenue strategy.”
YouTube introducing RPM doesn’t mean CPM numbers are irrelevant.
If a creator has a higher CPM, it can be a pretty good indicator of how valuable a specific advertiser finds that creator’s channel and its videos.
YouTube’s new RPM stat won’t show that same kind of advertisement indicator.
What’s reassuring to creators about the RPM metric is that it acknowledges how much monetization has changed on the platform, even in just the last few years.
At VidCon 2019, YouTube began introducing alternative monetization, including channel memberships (subscriptions), livechat features like Super Chat (donations), and merchandise shelves on creators’ channels to help those channel owners
diversify revenue amid deeper advertising issues that have existed for years on the platform.
YouTube is making other changes to seemingly try to make it easier for creators to earn more ad revenue, including giving creators access to mid-roll ads on eight-minute videos starting
Previously, a video had to reach 10 minutes (hence the 10:01 meme that took off on YouTube) to enable mid-roll ads.
CEO Susan Wojcicki has noted in a number of open letters to the creator community that transparency is something she and her team want to work on.
That includes transparency around how creators are paid.
New YouTube Metric Shows Creators How Much Money They are Earning
Introducing a simple metric that compares total revenue against total views is expected to give creators a reliable way of monitoring fluctuations in revenue over time.
Revenue per mille (RPM) shows how much a creator earned per 1,000 views. It’s calculated by multiplying all revenue reported in YouTube Analytics by 1,000, and then dividing it by total views in the same time period.
it takes into account all your revenue and all your views reported on YouTube Analytics, RPM provides the most holistic measurement of the overall rate at which you earn money on YouTube.”
It’s recommended that creators regularly review and evaluate their RPM in order to identify ways to improve and earn more money.
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The Difference Between RPM and CPM
Cost per mille (CPM) measures the average amount of money advertisers are willing to pay to show ads in a creator’s videos.
CPM is said to be a less efficient way of measuring revenue for a number of reasons.
First, it only takes monetized videos into account, not all videos.
Secondly, CPM shows what advertisers are paying, not what creators are earning.
YouTube says RPM is a better metric for creators because it shows how much they earn and takes into account:
- Total number of views from your videos, including the ones that are not monetizing.
- The actual revenue earned after revenue share.
Creators should expect the RPM metric to be lower than CPM because it’s calculated using revenue earned after YouTube takes its cut.
A lower RPM compared to CPM is normal and does not mean you’re earning less money.
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Related: CPM vs. eCPM vs. RPM: What’s the Difference?
The Importance of RPM for YouTube CreatorsUntil now, YouTube creators have not had such an efficient way of measuring how much they’re earning across the entire platform.
To be fair, such a metric was never needed until YouTube started expanding the ways in which creators are eligible to earn money.
Previously, the only way creators could earn money directly from YouTube was through ads in videos.
YouTube has since introduced different ways for viewers to spend money to support their favorite creators.
Now, in addition ad revenue, YouTube creators can also generate income through:
- Views from YouTube Premium accounts
- Channel memberships
- Super Chats
- Super Stickers
Channel memberships were introduced as YouTube’s answer to sites like Patreon where fans can pay creators directly to receive premium content.
Super Chats and Super Stickers were introduced when YouTube started expanding into live streaming. They’re similar to buying bits and making donations on Twitch.
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For active channels that are regularly publishing videos and hosting live streams, RPM is a brilliantly simple way to measure ROI.
Let’s say you’ve recently incorporated live streaming into your YouTube marketing strategy, but you’re not sure how well it’s working out for you.
Live viewers are buying Super Chats and Super Stickers, but the time spent streaming is taking you away from recording other content.
You can determine if your live streaming efforts have been a net positive for your channel by monitoring the change in RPM.
If RPM goes down, despite all the Super Chats & Stickers flowing in, then you may decide to refocus that effort on publishing regular videos instead.
RPM is now available to all monetizing creators so they can take advantage of it to measure their revenue performance over time and make more informed decisions going forward.
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