What Are the YouTube CPM Rates in 2022?
Did you know that YouTube receives more than 2 billion viewers every month? With numbers like that, it’s not surprising that so many people want to try their hand at making money on YouTube, especially with YouTube ads. When it comes to generating an income from YouTube ads, you’ll need to understand what YouTube CPM is.
You’ll also need to become more familiar with YouTube CPM rates. By balancing out how much YouTube ads cost with how much money you might make in return, you can plan whether or not advertising on YouTube sounds like the right path for you. And, the more you learn, the more you’ll learn how to increase YouTube CPM as well, which we will explore later on in this article.
For now, however, let’s take a closer look at what CPM is exactly and how it works.
What Is YouTube CPM?
The answer to “What Is YouTube CPM?” is not difficult.
CPM, or cost per mille (mille meaning “thousand”), is not unique to YouTube alone. Instead, it is one of the most popular ways to value digital ads. The term says it all: you will need to pay a certain price per 1,000 ad impressions on a single website.
For example, if you find a website publisher that charges $1.00 CPM, that means that per 1,000 ad impressions, you will need to pay $1.00. But what is an impression anyway? An impression is not only ad views but ad engagements as well that a given ad might receive.
However, ad impressions do not include ad clicks. Instead, there is another metric to count ad clicks known as the click-through rate, also known as CTR. The CTR is very important in the world of digital marketing because it shows that not only have people seen your ad but the same people were intrigued enough to click on your ad.
The CTR can also measure how effective or ineffective your ads are. For example, if you find that thousands of people are viewing your ad but only a small percentage of people actually click, you may have to improve your ad campaign somehow. If your ads are getting a lot of both clicks and views, you are doing something right.
However, you should not put too much weight on the CTR. While clicks are very important, people who see your ads but do not click are still important.
While CPM is one of the most common ways to price ads, it is not the only way. There are also the cost per click (CPC) and cost per acquisition (CPA) methods which we will discuss later.
Why Is CPM So Important?
You might be wondering why CPM is so important in the first place. Shouldn’t you be more focused on how much money your ads are making rather than how much money you’re spending on ads in the first place? If you are new to the world of YouTube advertising and the concept of CPM, you might not know that CPM can actually be very helpful in analyzing the success of value of your ads.
If you want to make a living from advertising on YouTube, you will need to consider all the ways CPM works. You will also need to think about what you might need to do to make more money from your ads. And, of course, you can’t ignore how you might be able to save money with CPM.
While CPM rates don’t seem like a lot at first, the price can pile up over time. If you are not making money back from your ads, you will find that you are draining money into advertising with no results.
For that reason, it’s very important that you know exactly what you’re doing before you dive into a big YouTube advertising campaign. Otherwise, the whole thing could backfire and you would be no better off than you were before.
Keep in mind that the main way people make money on YouTube is by showing ads. You might think as long as one of your ads shows up on a YouTube video that you should be good to go, but it’s not that easy. You need to think about the quality of your ad, the quality of the ad publisher, the ad price, the ad audience, and so on.
You will also need to plan a long-term strategy or you won’t get anywhere fast.
What Are the YouTube CPM Rates in 2022?
Keep in mind that the rates for YouTube CPM in 2022 discussed here are never static. These rates are averaged out and are not exact. Individual CPM rates depend on a variety of factors such as the ad publisher, the ad industry, the ad type, and so on.
There are also ways you can increase and decrease CPM rates. With that said, you should know that the CPM rate for the United States is around $6 and $8. The United States is among one of the most expensive countries in the world for the price of CPM.
There are a few other countries that have higher CPM rates such as Australia and certain Scandinavian countries. As for the high price in the United States, such a number might discourage you from advertising on YouTube.
Is it really worth it to pay so much money per 1,000 views or engagements for a certain ad? It really depends on what you are looking to gain (or lose) from your ad campaign. You may find CPM rates that are much cheaper on other parts of the internet such as on small websites or blogs.
However, you need to consider how highly trafficked YouTube is compared to other websites. Sure, you might need to pay a decent amount to show your ads on YouTube videos, but because so many people watch YouTube videos, you are likely to get your money back and then some. On the other hand, if you buy cheaper ads on smaller, less frequented sites, you may find yourself having a harder time making your money back even if you spent less.
You also need to think beyond the money sometimes and think about the end results instead. After all, YouTube ads can do wonders for brand awareness.
What Determines the Price of CPM Rates?
As mentioned before, there are several factors that may affect the YouTube CPM cost. By knowing more about these factors, you can better plan your advertising budget as well as what might be the best way to target your audience. You should also keep in mind that certain industries may affect the CPM rates on YouTube differently compared to the CPM rates on other parts of the internet.
This is because certain topics and industries may be especially popular on YouTube. If a certain category is especially popular and your brand happens to be involved in that category, why not try advertising for it? Your ads would undoubtedly be seen and people in that audience might be interested in learning more about what your brand has to offer.
For example, the beauty industry (especially makeup) is very popular on YouTube. If your brand happens to sell lipstick, eyeshadow, and other makeup products, you would have no problem finding a place to advertise successfully. By marketing your makeup products with an ad towards an audience who loves everything to do with makeup, it would be very difficult to make a mistake.
Other industries that are very popular on YouTube include technology, health, and finance. This does not mean you won’t have any hope if your brand doesn’t cover any of these topics. There are plenty of niche audiences on YouTube just as there are across the internet in general.
However, the more popular an industry is on YouTube, the higher the CPM rate will likely be. But this shouldn’t scare you away from popular industries. The CPM rates are so high for certain industries because you will be able to make your money back and then some without any problems.
The Benefits of CPM
As mentioned before, CPM is one of the most popular ways to pay for ads on YouTube. However, there are two other methods that are quite popular as well: cost per click (CPC) and cost per acquisition (CPA).
You might be wondering why you might choose one type of pricing method over the other. The answer is that one pricing method might function better for certain ad campaigns than others.
For that reason, you should analyze what kind of ad campaign you plan on running before you immediately start buying up ads. For example, clicks don’t matter all that much for CPM. For that reason, CPM could be ideal if you are focusing on growing brand awareness.
Plenty of people will see an ad with your brand’s name on it. They don’t need to click on the ad to know that your company exists. If the same person sees the same ad multiple times, he or she might eventually remember the name of your brand and at a later point, he or she may visit your website.
By putting your brand out there, you are letting more eyes see your company. Ultimately, more people will know that your brand exists. Brand awareness is very important if you have a new business and need to grow it fast.
If no one can find your website, it will quickly stagnate and die out. Even larger companies can still benefit from more brand awareness. And remember that with more brand awareness, more traffic often follows.
You should keep in mind that CPM is also one of the least expensive advertising methods. This is in comparison to the two other methods, CPC and CPA, which we will discuss next.
What Is Cost per Click?
As the name suggests, cost per click has to do with the cost you will have to pay every time someone clicks on your ad. Cost per click may also go by the term pay per click or PPC. Unlike CPM, views don’t matter all that much when it comes to CPC ads (although you shouldn’t forget about them completely either).
Most people who don’t like the sound of CPM tend to opt for CPC instead because it is the most popular alternative. Google’s AdSense is one of the most popular examples of a CPC advertising model. The way CPC works is unique and it can work well for advertisers who may not have a very large budget to work with.
For example, say you have a budget of $500. Once enough people click on your ads, you will have spent this amount of money. Once you do, your ad will automatically remove itself from the ad space so you won’t go over your budget.
As you can imagine, this can be a very convenient feature. It is also a good option for those who want to keep a daily budget for their advertising ventures. However, as an advertiser, you won’t have a direct connection with the ad publisher.
This is because, for CPC, the ad publisher will usually go through a third-party company that will allow them to find the right advertiser matches. This makes the advertising process quite easy for all the parties involved. There is a downside, however: CPC tends to be slightly more expensive than CPM.
Again, keep in mind that the price of advertising can vary drastically depending on what kind of advertising you are doing on YouTube. Keep in mind what might work best for your own marketing campaign as well.
What Is Cost per Acquisition?
CPA stands for cost per acquisition and is unique from both CPM and CPC due to the fact that you as the advertiser only pay for the ad if someone buys something after clicking on your ad. CPA may also be called cost per conversion or CPC. It tends to be the least popular of the three advertising methods, but that does not necessarily mean that it is the worst option.
The reason why the CPA method tends to be the least popular is that it tends to take far more effort from visitors. For example, when using the CPM method, it takes no effort at all to simply look at an ad. Even if a person’s eyes briefly brush across your ad, they will be more exposed to your brand than if your ad wasn’t there in the first place.
With CPC ads, viewers will need to make a little extra effort by clicking on the ad itself. Of course, not as many people will click on an ad as people who see the ad alone. Finally, CPA takes the most effort.
Not only does a person need to see and click on the ad, but then the person needs to make a purchase. Making a purchase may require the person to sign up with a website which is even more effort. CPA marketing is usually best if you are working with some kind of affiliate program.
Because the processes behind CPA are so complex compared to other ad marketing methods, it may not be right for everyone. You might also need to have a larger brand already. This is because not many people will be too interested in buying something from a brand that they don’t know anything about.
More Factors That Influence the YouTube CPM Rate
Now that you have seen the other ad marketing methods related to CPM, it is time to return to the subject of the CPM rate. We have already seen a few different factors that can influence this rate, but we have not explored many of the major factors in detail. Of course, if you have a budget to worry about, as most people do, it is important to know all about what might change the YouTube CPM rate and know what you can do to find the best deal.
It might surprise you to know that geography is one of the largest factors that can affect the CPM rate. Why might this be the case, you ask? This is because English-speaking countries tend to have a higher CPM rate compared to non-English speaking countries.
The reason for this may be because the United States, Australia, and the United Kingdom are all very powerful financial and digital powers. The online markets of these countries are well-established and developed. For that reason, it is always a good idea to try digital marketing in English-speaking countries.
While you might be able to broaden your demographic by spreading your brand to non-English speaking countries, it is often easier and more efficient to stick with English-speaking markets, even if they are more expensive. Even though you will be spending more money on your ads, there will be plenty of people online that will see your ads and will be interested in what your brand has to offer.
You could try to save money by paying for ads in other, less developed countries, but in such countries, you may not have a large audience. Less developed countries may not have a very developed digital market either which could be detrimental to your marketing plans.
The Quality of Your Ad Space
People tend to forget that there is such a thing as quality when it comes to ad space. Not all ad space is created equal, and for that reason, there can be drastic differences in the price for ad space depending on what kind of space you want to buy. Fortunately, most ad space on YouTube is high-quality since YouTube is a very reputable site.
Because YouTube is a high-quality site with plenty of great ad space that many advertisers compete over, the CPM rate is going to be a lot higher compared to other sites. For example, you could find another website that lists videos much in the same way as YouTube. However, if that alternative website is not very well-known or reputable, you might not see great results from your ads even if you’re able to save money.
Usually, websites with the cheapest CPM rates are somewhat shady and not very reputable. They might be filled with suspicious pop-up advertisements and other low-quality ads. If you care about the reputation of your brand, you wouldn’t want to group your brand along with generally low-quality brands and ads.
Doing this could easily give your viewers the wrong idea about your brand. Because of the detriments of this approach to your company, it’s not worth saving a few dollars on ad space. Instead, you might want to consider expanding your budget a bit and facing the higher CPM rates on YouTube.
By putting your ads on YouTube, you will never have to worry about people being skeptical about your brand due to the ad space on which it appears. By having your ads appear in a more trustworthy space, the ads will be more attractive to potential viewers, and, of course, potential buyers as well.
The Format of Your Ad
Ads can come in many different shapes and sizes. For that reason, different ad formats may have higher or lower CPM rates. For example, do you want to have a banner ad that runs along the bottom of a YouTube video or would you prefer to have an ad that interrupts a video and plays for a few seconds?
Usually, the more space and time an ad takes up, the more you will need to pay for that particular ad. This should be obvious since a larger and longer-lasting ad will better catch the attention of potential viewers. However, you should not discard the effect of smaller ads either.
Video ads tend to do better than picture ads in terms of engagement and clicks because they are more interesting to viewers. A picture ad such as a banner ad can only provide so much information and interest to a viewer. A video ad has more of a chance to explain what your brand is all about as well as what kind of product or service you might be offering.
If your brand is already somewhat large and established, there’s no reason why you shouldn’t try using video ads on YouTube. There are several different video ads you can choose from. Some can be very long while others last only a few seconds.
Other video ads might be skippable while others might be un-skippable. Depending on what kind of publisher you are buying your ad space from, all of these variables can play a part in determining the CPM rate. As long as you know what you’re in for when you buy a certain kind of ad, you shouldn’t experience any problems.
The Number of Ads on the Same Page
One thing that might not occur to you is that the number of ads on the same page can affect the CPM rate. For example, you might have a YouTube ad that only shows up once in a video and never shows up again on the page afterward. On the other hand, you might have an ad that shows on a video and then appears beside the video.
Off of YouTube, you may have seen websites that show the same ad several times on different parts of the same webpage. The more times you show your ads on the same webpage, the more you should expect to pay. However, don’t think that having more ads is always the best option because that is not always the case.
Too many ads on the same page or video, especially the exact same ads, can be very annoying and exhausting for your viewers. After seeing your ad for the 12th time, your viewers will likely not be interested in listening to or seeing it again so they will be turned off to your brand. However, there is a sweet spot when it comes to showing an ad several times on the same page.
If viewers see ads a certain number of times over again, the name of your brand may start to stick in their minds. After a while, they may wonder what your brand is all about and may want to learn more. On the other hand, if you bombard people with your ads, they will not find your ads very attractive because they feel too spammy and overwhelming.
Usually, you don’t need more than one or two ads on a page at one time to get your brand’s point across. Knowing this can save you money in the long run.
The Seasons and Your CPM Rate
While it might sound strange, the change of the seasons can actually have a big impact on your CPM rate. Think about it: there’s a reason why you start to be bombarded with Christmas-themed ads on YouTube (and other sites) once the winter seasons start to roll around. The reason for this is that seasonal marketing is incredibly effective.
If you don’t take advantage of seasonal marketing and CPM rates, do you really care about the success of your business in the first place? Long before Christmas and other holidays come around, people will start gathering gifts for the future in hopes of finding early deals. Marketing some of your products on YouTube with seasonal ads is one of the best ways you can sell your products or services easily and fast.
However, because seasonal marketing is so effective, you should expect that the CPM rates will be higher, sometimes much higher. But don’t let this worry you. While you might need to spend more money on your seasonal YouTube ad rates, you won’t have any problem making back your money and more.
The change of seasons is a great time to get more competitive with your marketing. By putting out more ads and increasing your brand awareness around the holidays, more people will become aware of your brand and may be interested in shopping on your site. Seasonal periods are also one of the few periods of the year that you can get away with putting out large quantities of ads without looking like your brand is desperate or spamming.
So, don’t be too afraid of spending a little extra money on your seasonal ads. You will likely make a great return to make up for your investment anyway.
Check on the State of the Economy
Just because the economy is in a good state at the moment doesn’t mean that it will always stay that way. In times of economic flux, you may also see fluctuations in CPM rates for your advertisements. While minor fluctuations in the economy’s state may not be as important as other factors when it comes to the price of advertising, keeping it in mind won’t hurt, especially if you’re on a tight budget.
Usually, when the economy is doing well, CPM rates for ads will be high. The reason for this is that in a healthy economy, people have no problem buying things. People have jobs and money to spend so they will have no qualms about viewing and clicking on ads to see what they have to offer.
This, of course, is the ideal scenario for you as an advertiser. You want more people to click on your ads, remember your brand, spend money, and keep coming back for more business. However, if the economy is in a bad state, you’ll find that this kind of scenario will be hard to come by.
If the economy is not doing very well or even if it slightly dipped, people may become more anxious about paying for products and services. This is because people are unsure if the economy will get worse or better. If it gets worse, people might lose their jobs and have a lack of income to buy products and services.
The result of this is that CPM rates will go down. While you might be able to save money on advertising, advertising might not be worth it because people might not be in the position to buy things. For that reason, don’t forget to keep an eye on the economy before paying for ads.
The Influence of News and Events on CPM Rates
Much in the same way that changes in the seasons and economy can bring about changes in CPM rates, news and events can do the same thing as well. This is because news and events around the world can have direct or indirect events on the economy and many other factors in the world of marketing. News and events can also have to do with the supply and demand of certain products or services.
For example, if some news arises about the closing of several diamond mines in Africa, there is going to be a serious disruption in the supply of diamonds. If you are a company that sells diamonds, you may find that the CPM rates for diamond ads may have changed. The changes that news and events don’t always have to be so dramatic either.
Even news about slight changes in the supply chain, marketing trends, or other factors could all contribute to changes in the pricing of online ads. Speaking of trends, the news is often filled with various marketing trends that seem to change by the month, the week, or even the day. For that reason, it’s important to read the news and keep up to date with the latest trends in marketing.
And, since trends tend to change so quickly, it’s also important to be one step ahead of those trends. By knowing more about trends in marketing, you can better know what to expect from CPM rates for certain types of ads.
For example, if you see a sudden increase in the popularity of anti-aging moisturizers, the CPM rates for that niche may very well increase at a rapid pace. Keep in mind that the rates may decrease fast as well, depending on the lifespan of a trend.
Choose the Right Kind of YouTube Ads for Your Campaign
By choosing the right type of ad for your YouTube marketing campaign, you can maximize the efficiency of your campaign. On the other hand, if you use the wrong kind of ads for your audience, your campaign is not going to be a great success. This is because it won’t be able to resonate well with your audience.
Programmatic ads are very easy to utilize no matter what kind of campaign you might be running. This is because programmatic ads are automated with machine learning and AI optimization. Instead of doing all the planning and setting up yourself, programmatic ads can do a lot of the heavy lifting for you.
Even though programmatic YouTube ads may be more expensive than ordinary ads, in the long run, they can save you a lot of time and money. After all, instead of pouring all of your energy into setting up the perfect ad campaign, you can leave a lot of the effort to programmatic ad platforms.
This, of course, does not mean that you can completely ignore the flow of your ad campaign. Certain features will need to be analyzed by a human rather than an artificial eye. Even so, programmatic ads will be able to catch and include a lot of advertising features that might not occur to you.
Because programmatic ads are so efficient, they can help you gain an edge over the competition. As a human advertiser (in contrast to a digital advertiser) your responsibility will be to plan your marketing strategy and figure out how to optimize your programmatic ads. By planning the details and making sure everything falls into place, you should have no problems creating a very successful ad campaign.
Skippable and Non-skippable YouTube Ads
There is a lot of debate when it comes to choosing between skippable and non-skippable ads for YouTube. You have undoubtedly experienced a time when you were desperately waiting for the “skip” button on a certain YouTube ad. You, of course, don’t want your potential customers to easily await the skip button, so what can you do to make sure your ad grabs someone’s attention?
A lot of the significance of YouTube ads has to do with the amount of time they last. Some YouTube ads can last for several minutes. On the other hand, other ads might be 30 seconds or as short as a few seconds.
Longer ads tend to have a skip button while the shorter ones do not. Providing skippable ads gives your viewers a chance to miss out on your brand, but a non-skippable ad may frustrate your viewers as you force them to watch your ad. The length and type of your YouTube ad not only affects the CPM rate but also how your viewers interact with your ads.
Of course, when you are trying to run a successful marketing campaign, you will want ads that people watch and eventually click on. You won’t see a big boost in your brand’s success if your viewers keep skipping your ads as soon as they can. Analyzing your audience is always important when choosing your ads.
If your audience is young, you might want to have more fast-paced and bubbly ads. On the other hand, if your audience is more mature and serious, you might want to design ads to match your audience’s expectations and intentions. Whatever the case, choosing the right ads is vital for properly targeting your audience.
Everything You Need to Know About YouTube CPM
If you were unsure about the concept of YouTube CPM and CPM rates before, you should now know all about how it works. By analyzing the factors that influence CPM rates and optimizing your marketing strategy, you should have no problem boosting your business with this kind of advertising.
To learn more, contact us here.