Viewers are shifting their focus from pay-per-view video streaming to online platforms. YouTube has seen a steady increase in subscribers and users over the past 10 years. There is a projected decrease from the current 76 million by 2025.
This opened the world of content creators to the advertising community. YouTube creators can now create revenue for their creations based on views and ad clicks. This monetization ranks as YouTube CPM.
But, attracting viewers to your channel is only half the battle. Advertisers can maximize their profits with the right resources and in turn, benefit your channel.
Keep reading to see how to generate a programmatic video and benefit from the services of Media Shark.
What Is YouTube CPM?
The term “CPM” is an acronym for “cost per mille”. This can translate as the cost per 1,000 views. Cost per 1,000 views calculates the number of views and the cost for each. This helps advertisers know how much they invest.
One of the best ways to think of this subject is as the costs the advertisers must invest to promote on YouTube. This is similar to how a blog will get revenue from Google for the clicks on their website. If your blog gets 100 clicks, the advertiser must pay Google a fee for each click you get.
YouTube videos operate very similarly. Advertisers pay YouTube for every view their ads receive on the platform. YouTube CPM calculates the amount spent on the portion of the advertising. This means the amount paid to Google and the amount paid to the creator.
Per 1,000 views is simply the cost per view times 1,000 to get your CPM. Let’s say the advertiser pays $.50 per view and the ad receives 2,000 views. This is not a typical cost, but for simplicity’s sake. You simply multiply $.50×2,000=$1,000.00. This means the CPM is $1,000.00.
What Is Your YouTube CPM Based On?
The basics of CPM have been explained above, but let’s delve in a little further. Generally, the CPM is generated by doing the simple equation above: CPM=cost per view x cost per 1,000 views. By figuring this out, you are at step one of figuring out YouTube CPM.
But, the importance of this number goes further. CPM can help indicate how well your channel is doing and how much you can potentially generate. By knowing the CPM of your videos you are one step closer to determining the way you can angle your videos to attract advertisers and viewers.
Advertisers will pay more for a spot on a channel based on its popularity. If your channel gets a steady viewership, then it’s more likely to attract high-paying advertisers. The more they pay for ads, the more money trickles down to you from YouTube.
The score is not everything, but it is pertinent to the success of your channel.
What Is a Good YouTube CPM?
The average YouTube CPM is $2.00. This means that on average, advertisers pay YouTube $2.00 per 1,000 views of their advertisement. However, when you localize this, it varies even more.
In the United States CPM tends to be between $6-$8. This is significant for understanding how money generates in this system. This introduces another factor: CPM varies depending on the area you are in.
Before jumping to this, however, you must understand what an RPM is. RPM stands for “rate per millie.” This indicates the amount you make, as a creator on YouTube, per 1,000 views.
Let’s explore this in-depth.
Differences Between RPM And CPM
RPM when compared with the concept of CPM is the amount generated per 1,000 views for you. In the United States, advertisers pay $6-$8 per 1,000 views. YouTube takes 55% of this revenue for itself.
This translates to you receiving 45% of the ad revenue. So, if they pay $6.00 per 1,000 views for an ad that gets 3,000 people to view it, they will pay $18.00. But, YouTube will receive 55% of this, which means they get almost $10 of the revenue.
In turn, this means you will get only around $7-$8 for the ad views.
What Is the Difference in CPM Based on Location?
We already established how much the average YouTube CPM is in the United States. But, what if you live or reside in another country? How will the geographical location of your channel impact your CPM?
The short answer is, yes CPM changes based on where you are. And, not just this, but there are better places for you to have your YouTube channel than in the USA. Most countries in Europe have a much higher CPM than the USA.
Norway, for example, has a CPM of over $40.00. You, the creator, will receive more revenue as well. Because the advertisers pay more to have their ads played in this country the ad is worth more.
But, many Slavic countries have much lower CPMs and this means you will make less per view as well. This is because advertisers will not pay as much to advertise in Slavic countries as in European countries.
Why is this? Because European countries have more money available to them. Overall, people in countries such as Norway have more money and are more likely to purchase an expensive product than someone in a poor country.
This leads to the next topic. How will your audience impact your CPM and RPM?
Do Children’s Videos Do Better on YouTube For CPM Rates?
It may surprise you to learn that the age of your audience can impact the revenue you generate from your videos. Why is this? There are multiple explanations for how the demographics of your audience can impact your CPM.
First of all is, in some countries, laws are regulating who you may advertise to. If your audience is predominantly under 13 years of age, there are many regulations in the USA about how you market to them.
The United States prohibits the collection of data from children. Advertisers are hesitant to invest in advertisements directed to children. This is because they are not certain of the viewer base. YouTube might not have any data about your audience because of this fact. This means advertisers feel uncertain about investing in your channel.
If you have a specialized channel you may wish to invest in sponsorships rather than streamed advertisements. This might be an endorsement from a children’s toy company to speak about their product on your channel.
The point is, you need to be aware of your audience when you seek a better CPM.
How Are YouTube Ad Views Calculated?
There are many factors that can impact your ad revenue on YouTube, and one of the main things is how views are counted. Not every advertisement view is calculated into the CPM. Why aren’t they calculated?
For starters, everyone knows the option to “skip ad” after you have viewed it for approximately 5 seconds? The truth is, these ads are not counted towards a view of the advertisement. For an advertisement to count as “viewed,” you must watch it for at least 30 seconds.
If your video receives 1 million views it does not mean the advertisements had this many. It is possible only 30% of your viewers actually watched the advertisements.
This can negatively impact your revenue generation. However, there are easier you can advertise that might be more effective based on your audience and your content. These are explored below.
Which Advertising Method Is Right for Your Channel?
There are several ways you can monetize your channel other than traditional advertisements. These methods can be direct promotion within your video by having a personal sponsorship. You may know what this means.
Maybe you selected a video and you notice in the right or left-hand corner of the video is a note saying this video has a paid promotion. Or, maybe you notice a box advertisement written below the video.
These are just a couple of the options available to YouTubers to add to your advertisement revenues. But, it is important to know how to tailor these advertisements to fit naturally in your YouTube channel.
Let’s explore the options in-depth and understand how they are usually applied to YouTube videos to increase traffic and revenue.
The Different Ways You Can Monetize Your Channel With Advertisements
Google Support offers multiple methods of monetizing videos on YouTube. For now, this article will only focus on the advertisement methods. But, later the discussion will shift to alternative non-advertisement methods of generating revenue.
Google explains the main methods of an advertisement on YouTube:
- Skippable ads: These ads can be skippable after 5 seconds of viewing. They pop up throughout your video
- Non-Skippable ads: These ads tend to play at the opening of a video and the viewer must watch it in full. These ads are not usually too long
- Bumper ads: These are non-skippable ads, but they are not long. On mobile devices, they are usually only 6-10 seconds long
- Overlay ads: These are small box ads that appear at the bottom of a video. They usually have the option to close, but most of the time they do not disrupt the video
The option you use could heavily impact your channel’s revenue generation. For most YouTube creators, it is best that you diversify the advertising methods for your channel.
These ads are tailored based on the length of your video. Google advises that a creator choose video ads for videos. For shorter videos, overlay ads are a good idea.
Are Overlay Ads Worth It?
Overlay ads are only available on desktop or laptop settings. They are not displayed on mobile devices, so you need to consider that the views of these ads may be less.
And, you do not get revenue simply by displaying the ad. Revenue is only calculated when the person watching the video clicks on the advertisement link.
The ad can also be shut off if the viewer clicks the little “x” button above the ad. This means you will not get revenue for this ad as well.
Why do these advertisements exist? They can be customized to your content and can even be used to draw traffic to another site you have.
The main advantage is they are generally non-disruptive and customizable. One major downside is, they are easily ignored. The best way to maximize overlay ads is to utilize a powerful call to action in the text!
Advantages of Skippable Versus Non-Skippable Ads
The best part of skippable ads is they do not tend to disrupt the viewer of the video. The ad may pop up suddenly, but the viewer knows it can be ignored and get back to their video.
The disadvantage to this system is rather evident: you will not get paid for a skipped ad. But, since YouTube does track user data, these ads are usually tailored to the preferences of the viewer.
The idea is to find the advertisement that draws them in. And, to get them to commit to watching at least 30 seconds of this video.
Non-skippable ads are beneficial because they prevent the issues associated with skippable ads. But, sometimes non-skippable ads can deter people from continuing the video.
But, YouTube does try to generate ads that will attract the preferences of your audience. The less they skip, the better it is for you.
Bumper Ads for Short Videos
Bumper ads are actually one of the most effective forms of video advertising on the YouTube platform. These are short video ads that play at the opening of a video and the viewer cannot skip.
These ads actually work well at retaining the attention of the viewer. They are a favorite of advertisers, but they have their difficulties. It is difficult to create an informative and engaging ad in under 7 seconds.
But, the truth is, these 6 seconds are good for catching the attention of the viewer. And, most importantly, they do not deter the viewer from finishing the video.
They cost between $1-$4 per 1,000 views on average. But, they are more memorable and get the most views.
Should You Have a High or Low CPM?
The more advertisers pay per 1,000 views the more you retain in your RPM. This means you do not want to have a very low CPM. This means you do not have a highly competitive channel and advertisers do not see it as worth investing a lot in.
That being said, you advertisers want a reasonable campaign to run their ads on. So, a super high CPM is not good either.
What is most attractive is a channel that has steady views and is friendly to advertised preferences. This means following the YouTube and Google code of conduct which will be discussed further in a later section.
But, a higher CPM is usually the sign of channel growth and demand from advertisers. They are essentially willing to bid more to have their ads appear on your channel.
Resourcefulness in Videos for a Good YouTube CPM
Pragmatism is a 19th-century philosophy that focuses on the application of compromise on a larger scale. It advises adherents to make sacrifices of their own preferences to make a better impact.
These principles can apply to video creation. You should use resourcefulness when creating your videos to meet advertisers’ needs. By doing so, you improve your channel’s marketability to advertisers.
You may need to alter how you create your videos and what audience you try to attract. By applying these principles to your channel, you can maximize your demand to advertisers.
What Does it Mean to Tailor Content to Advertisers in Video Creation?
Advertisers do not want their ads to play on videos that are discussing controversial topics. If you choose to make your channel on certain topics you can impact your demand for advertisers.
But, we will discuss this in the next section more. Generally, advertisers do not want their products associated with non-family-friendly content. This content includes several categories.
They do not want videos that have curse words in them. This means the videos will have a bigger pool of advertisers looking to invest if they see a clean video.
Now, a clean video can include videos free from subjects such as sexual or explicit content. Violence is not something that attracts traffic from advertisers wither since many people find this to be a reason not to watch content.
Ideally, advertisers want their ads to be viewed by as many people as possible. And, if you wish your videos to generate a lot from advertisements, it’s best to make pragmatic videos.
Some advertisers are hesitant to have their products advertised on certain political content as well. If your videos are discussing the controversies surrounding immigration in the USA, they may be less likely to invest in ads on your channel.
What Niche Makes the Most Money on YouTube?
Certain niche topics tend to be much more popular to advertisers than others. We already explained how certain topics and language should be avoided if you want advertisers to come to your channel.
But, there are ways to maximize your profits even more on YouTube. The topic of your videos can also attract advertisers. Certain subjects are especially popular because of the viewers they attract.
Financial content does especially well on YouTube advertising. This is partially because the viewers most likely have sufficient funds.
Financial content can generate sufficient funds compared to other niches. This is because of the target audience. This niche is in high demand for young people who seek information about investing.
Other Popular Niches on YouTube
Financial content is the most popular content for advertisers on YouTube. But, other good niches generate relatively good ad revenue as well.
Video game and tech review channels perform rather well. They do not do quite as well as financial channels mainly because they do not have as high demand on YouTube.
In other words, the channels are very targeted to specific demographics. It is not that these channels do not have a good following or a demand. It means they do not attract as many people searching for the content as financial channels.
The best part about tech channels and video game reviews is that they are not a controversial subject. Mostly these channels attract younger followers which is another reason these channels do not generate as much revenue.
The age of a demographic has a fairly big impact on the advertiser’s willingness to invest in your channel.
Health and Fitness
Health and fitness videos do really well on YouTube as well. Health and fitness channels are appealing to a large number of people of almost every demographic out there.
It also does not exclude a lot of age groups or financial strata. People of almost every age and background will watch a channel that advises them on how to fulfill their New Year’s resolution and improve their lives.
Fitness and health impact people who are older because they want to maybe improve their health as they age. But it also attracts young people who are looking to improve their looks or just get in shape.
Finding a topic that is more or less universally applicable is a smart idea when looking to monetize your channel.
How Does the Age of Your Target Audience Impact Ad Revenue
Older demographics are more likely to generate more ad revenue for your channel. This means if your channel targets individuals over 30 and under 65 you are more likely to attract more ad revenue.
This is why tech channels generate less ad revenue than financial channels. The older the viewers, the steadier their income is considered steadier.
Tech channels attract viewers who are still in high school or early 20s. Financial channels attract people in their late 30s and mid-50s.
When you make content geared towards younger viewers you may get more views. But, the older viewers tend to attract more advertisement revenue.
How Do You Maximize CPM on YouTube?
The best way to improve your CPM on your channel creation is to find what people are seeking and then create it. This sounds simple but it involves a lot of work and research.
This can also mean adding content to your core content that is appealing to advertisers. This is the primary way to attract advertisers.
But, remember to avoid creating controversial content. Cursing is especially to be avoided since it is disliked by most viewers who want to watch content for themselves and their children.
And last, avoid controversial political and religious content. This is not to say you should not make other content. But, if your goal is to maximize CPM revenue generation then these are content specifications you should avoid.
But, there are other ways to generate revenue that does not involve this. We will delve into these options now.
Ways to Generate Revenue Without CPM Maximization
Perhaps, you are seeking to make a channel that is more controversial and worried about how you can monetize it? Content can be monetized in ways that do not include ads playing on your videos.
One of the best ways is to monetize your audience. This includes creating a subscription system where users pay to access your content. Or, creating special content for these subscribers.
You can also use affiliate links for your videos. This is similar to how affiliate links operate on website blogs. Companies will pay you to read ads on your channel or include products in your videos.
Last, people create their own fan-based merchandise and content for their fans that is specific to the channel. This includes making t-shirts and other merchandise that people purchase in support of your channel.
Let’s explore these options below.
Special Subscriptions for Your Fan Base
Many content creators make a Patreon where their subscribers can support their work. Subscribers Can sign up to be a Patreon by following the YouTuber’s link and supporting them directly.
This is how a lot of YouTubers who create controversial content generate revenue for themselves and their channel. Some smaller channels that are less competitive because of their subject matter also use Patreon to supplement their revenue.
The best way to make this system effective is to offer special perks to those who contribute.
Here are the best ways.
Empower Your Viewers to Make Decisions for Your Channel
With Patreon, you can allow your followers to select the content they want to see most on your channel. This is one of the best ways to motivate your viewers to contribute to your show.
People like to feel like they are a part of your journey. And, this is one of the best ways to do this while enabling you to worry less about ad revenue.
As a bonus, you can offer your Patreon subscribers special, unique prizes or content. A similar example of this is Rhett and Link’s Mythical Society. This isn’t Patreon, but it operates similarly as a separate website well die-hard fans get special perks.
Consider creating a fan page with special prizes and games for members only.
Affiliate Links for Included Products
Affiliate links have been popular in the blogging community for a few years now. Basically, content creators have a trusted relationship with their audience, and advertisers know this.
It is similar to how commercials use celebrities to suggest a perfume or some other product. Studies have indicated that celebrity endorsement encourages us to think that a product is prestigious.
This is also why a company that seems “family-oriented” will include images of kids and parents. The advertisers know that people will perceive the product as safe for their families.
Online influencers on YouTube have a lot of power and the ability to sway the opinions of their audience. This is not to say they should lie or exploit their audiences. But, they can utilize their platform to get an endorsement from a product they really use or believe in. Sometimes giving us marketers some of the best CPM and CPC costs.
Create an Online Store to Sell Merchandise
Content creators often resort to generating revenue through direct sales of a product. Many YouTubers make deals with printing companies to make nice t-shirts or hoodies their fans can purchase as a way to support them.
Merchandise does not need to be limited to t-shirts and hoodies, however, they are some of the most popular products.
The aforementioned Rhett and Link have their own company store where they sell various products. This store is called Mythical and sells such unique products as lip balm to beard oil.
Creating an online store for tour own sites’ products is an excellent way to generate some extra revenue.
Steps to Improve Your CPM on YouTube
Creating quality content is the ultimate key to generating revenue on YouTube. Creators who have a dedicated viewership are more likely to have consistent advertising opportunities.
This is because your viewers are your community and they are the ones who always come back for more. Advertisers want to see experience and high consistent views.
It does not matter if you have millions of subscribers if only a couple thousand views per video. This means you might not have an engaged audience. The best way to improve this is to listen to your audience and generate the content they seek.
Why Is It Bad to Have a Low CPM?
A low CPM is bad for several reasons. One of the main reasons is a low CPM is bad is it may mean you have a poorly performing YouTube channel. It does not necessarily mean this, but it can be indicative of this.
But, a low CPM means there may be a more severe underlying issue to your channel. How so?
A low CPM may mean your channel has technical issues or performance issues that are driving away traffic. People are not likely to remain on a page that loads slowly or lags in the middle of the video.
Check to ensure your video is not facing any technical issues that might be impeding it. This could hinder your channel’s CPM.
Try Diversifying Your Content
By diversifying your content you will likely bring more foot traffic to your channel. The more views you receive the more likely you are to attract advertisers.
Try to remain focused, however. Remember your viewers know what your channel is all about. This is why they love your content and continue coming back for more.
When selecting a new topic to branch out into, try to select a topic that is similar to your main topic. If you create videos about console video games maybe you can try to add content about PC gaming.
The ultimate goal is to attract more views so advertisers will see your channel as a valuable investment. By diversifying you can potentially attract a whole new group of followers.
What Is Programmatic Advertising?
Programmatic advertising takes the data tracking of Google and YouTube and makes it even more potent. Programmatic advertising makes sure advertisers’ content is marketed to the right demographics in the most effective way.
Programmatic advertising brings the power of targeted advertising under one umbrella. If a firm or business wants their advertisement to reach certain demographics they can hire specialists in programmatic advertising.
They can use special tools to target the ads to certain demographics of viewers. This ensures their content is viewed by the best demographic for the product.
How Does Programmatic Advertising Work?
Programmatic advertising was first discovered in 1994. Advertisers found that if ads were maximized to reach the proper audience then it would cost a lot less in the long run.
Back then it was more or less a fluke that ended up working excellent. Today, the system can boil down the ad to not only reach the right age range.
Today, programmatic specialists collect the very specific requests of their clients. This includes the geographic location as well as the gender and financial situation of the viewer.
But, how does it differ from regular advertisements? These ads are more specific because they are targeted across websites and channels to only play for these specific demographics.
Let’s say you wanted to have your advertisement only targeted to women ages 25-35 who make between $50,000-$100,000 every year. The goal of programmatic advertising is to ensure these videos are only played for these specific audiences.
What Is Programmatic Video?
On YouTube, you can use the benefits of programmatic advertising to video ads. Google support details that to have programmatic advertising you must specify the preferences in your channel.
Video ads are specifically targeted to the right audience. regular advertising on YouTube is an auction. This means advertisers more or less look at the averages of a channel and bid accordingly.
But, programmatic video advertising allows the advertisers to only play the ads to specific types of people. This means if a clothing company only wants to pay for their ads to be viewed by specific types of people, they can.
This means they really won’t waste any money generation views without leads back to their site. The goal of an advertisement is to have people visit your site and purchase their product.
Programmatic advertising permits advertisers to maximize their investment by ensuring they get the most leads.
Media Shark and Programmatic Advertising
Media Shark is a programmatic media developer which means they specialize in targeting the right viewers. They utilize Google data and behavioral advertising to guarantee the right people are targeted.
Behavioral targeting, when applied properly, allows advertisers to be sure they are reaching the right people. It is the most cost-effective way to go about attracting people to your products.
Media Shark utilizes behavioral targeting to give the viewer the most accurate ads to their preference. This saves you money in the long run because you can be sure the right people view the ad.
Applying Behavioral Targeting to YouTube With Media Shark
Media Shark offers specialized services that focus on bringing out the most in every ad. Through advertising optimization, they increase your revenue on YouTube.
Behavioral targeting follows user data across various online platforms. This data can indicate not only what a user searches but also how long they remain active on a site.
Imagine how useful this data is if you want your ads to go to the right people? Normally advertisers need to bid on ad spaces in an auction-like setting. This takes out most of the guesswork.
How Behavioral Targeting Can Save Money
The main utility of behavioral targeting is that it saves advertisers a lot of money in the long run. When an advertiser engages with the online auction for ad placements they must try their best to find a channel that seems to suit their products.
But, with programmatic advertising, the behavioral data of users is applied directly. This means your ads won’t just air on YouTube channels that are the right topic for your ads.
The ads will only run when the right user is viewing the video. The advertisers won’t have to worry about paying for views to users that won’t be beneficial to the advertisers.
Even if an advertiser may pay more for the service upfront, over time it is cheaper. They won’t need to pay for useless views of their product. They will only pay for those ads that are geared to the right viewers.
Media Shark and YouTube CPM Improvement
YouTube CPM is not just useful to the YouTube content creator. A good CPM enables advertisers to invest their money where it matters the most.
YouTube ads benefit content creators by funding their work. And, it benefits the advertisers by guaranteeing they have the best ad space for their product.
Media Shark offers its clients personalized services for their products and their target audience. With offices all across the country, they have a service for every need. Call for a free consultation with their expert staff!