Advertisers want to get the most for their money, and that is why understanding the YouTube CPM meaning is important. Do you know what it is?
Well, Cost Per Mille, or CPM, is an advertising metric used to measure the performance of ads on YouTube. This number tells you how much it costs to show your ad 1,000 times.
In order for your business to make money from its advertising efforts on YouTube, it’s important to know what this metric means and how you can improve your CPM.
Keep reading to find out more about what CPM in Youtube means.
What Is the YouTube CPM Meaning?
As a business, you want to make sure that your advertising money is well-spent. That’s where YouTube CPM comes in. CPM stands for Cost Per Mille, and it is a metric used by advertisers to measure the performance of their ads on YouTube.
This number tells you how much it would cost to show your ad 1000 times. If you have a low CPM, that means your ad is being shown often and is likely having a positive impact on viewers.
A high CPM means that your ad isn’t being shown as often, and you may want to consider changing your strategy.
A Brief History of CPM On Youtube
CPM has been used as a metric for advertising since the early days of online advertising. In the past, advertisers would pay a set amount of money to have their ad shown 1000 times on a website.
This method was effective in reaching a large audience, but it didn’t guarantee that the people who saw the ad were actually interested in what was being advertised.
As internet usage changed and more people began using ad blockers, this method of advertising became less effective. Advertisers needed to find a way to reach their target audience without wasting money on ads that no one would see. That’s where YouTube CPM comes in.
In the early days, Youtube CPM was very low. Advertisers were still trying to figure out how to effectively use the platform, and as a result, many ads were not being shown to users. This changed in 2009 when Google announced that it would be changing the way CPM worked on YouTube.
They decided to move away from the “impression-based” model and instead focus on “engagement-based” advertising. This meant that advertisers would only be charged if someone actually watched their ad. This was a major shift in the way that advertising worked on YouTube, and it had a big impact on CPM rates.
As more businesses began to understand how YouTube could be used for marketing, CPM rates started to increase. In 2013, the average CPM rate was $0.80. This number has continued to grow in recent years, and it is now not uncommon for businesses to pay $20 or more for 1000 views of their ad.
What Is the Average Youtube CPM?
The average CPM on YouTube varies depending on a few factors, including the country you’re targeting, the type of ad, and the time of year. Generally speaking, the average CPM for a YouTube ad is between $5 and $10.
However, if you’re running a skippable ad (meaning viewers have the option to skip it after five seconds), your CPM will be lower than if you were running a non-skippable ad.
The CPM can be as low as $0.01 for a non-skippable ad, or as high as hundreds of dollars for a skippable ad. However, this is often reflective of the difficulty of entry into a certain niche on Youtube and/or the desire for the content.
Is Youtube CPM Permanent?
YouTube CPM is not permanent. This metric can fluctuate based on a number of factors, including the time of year and the type of ad you’re running. However, if you’re seeing a consistently low CPM, it may be time to consider changing your ad strategy.
For instance, if you’re running a skippable ad, you may want to try running a non-skippable ad. Or, if you’re targeting a specific country, you may want to try targeting a different country.
The bottom line is that YouTube CPM can fluctuate, but if you’re not happy with your current CPM, there are steps you can take to improve it.
How Does Youtube CPM Differ From Other CPM?
There are a few key ways in which YouTube CPM differs from other CPMs. First, YouTube CPM is based on views, not clicks. This means that you’re only paying for your ad if someone actually watches it.
You don’t have to worry about people clicking on your ad and then immediately leaving the page. Second, YouTube CPM can be lower than other types of CPM because of the way ads are served on the platform.
Ads on YouTube are typically served as skippable pre-roll ads, meaning viewers have the option to skip them after five seconds. This gives you the chance to reach a wide audience without having to pay for every single person who sees your ad.
Moreover, since YouTube CPM is based on views, you can be sure that people who see your ad are actually interested in what you have to offer. This is unlike other platforms, where you may pay for clicks but the person who clicked on your ad may not actually be interested in your product or service.
How to Improve Your Youtube CPM
There are a few things you can do to try and improve your YouTube CPM. One is to target your ads more specifically. The more relevant your ad is to viewers, the more likely they are to watch it all the way through.
You can also try running different types of ads, such as a non-skippable ad or an interactive ad. Finally, make sure you’re running your ads at the right time.
If you’re targeting parents, for example, you’ll want to run your ads during times when they are likely to be home with their kids and have some free time to watch YouTube videos.
Furthermore, advertisers should also be aware of their competition and try to one-up them. This means knowing what type of ads they are running and how much they are spending on them. If you can outspend your competitors, you’ll be more likely to get your ad in front of viewers.
All in all, understanding the meaning of YouTube CPM is essential for any business that wants to make money from advertising on the platform. By knowing what CPM is and how it works, you can better tailor your ads to improve your chances of success.
How Long Does It Take to Improve Your CPM?
It can take some time to improve your CPM, as it depends on a number of factors. However, if you’re consistently seeing a low CPM, it may be time to consider changing your strategy.
You can try targeting your ads more specifically, running a different type of ad, or running your ads at a different time. Additionally, keep an eye on your competition and try to outspend them. With some trial and error, you should be able to find a successful ad strategy that improves your CPM over time.
Moreover, if you’re not sure how to improve your CPM or don’t have the time to do so, you can always consult with a professional.
There are many companies that specialize in helping businesses advertise on YouTube and can work with you to create a successful ad campaign. By working with a professional, you can save yourself time and money while still getting the results you want.
Factors That Affect Your CPM On Youtube
There are a number of factors that can affect what your CPM on YouTube mean. These include:
The Geography/Location On Your Channel:
The country that your channel is based in can affect your CPM. For example, if you’re targeting viewers in the United States, you can expect a higher CPM than if you were targeting viewers in India.
For instance, the CPM for advertisers in the United States is around $23.04, while the CPM for advertisers in India is only $0.64.
The Audience Age Group
The age group of your audience can also affect your CPM. Generally speaking, ads targeting older viewers will have a higher CPM than ads targeting younger viewers.
For example, the CPM for advertisers targeting viewers aged 18-24 is around $17.91, while the CPM for advertisers targeting viewers aged 35-44 is around $22.96.
The Industry/Niche That You’re In
The industry or niche that you’re in can also affect your CPM. For example, if you’re in a highly competitive industry, such as the fitness industry, you can expect a higher CPM than if you were in a less competitive industry.
Besides, the CPM for advertisers in the fitness industry is around $30.96, while the CPM for advertisers in the education industry is only $11.19.
Seasonal Effects on Niche Channels
Some niches are more popular at certain times of year than others. For example, the Christmas season is a popular time for gift-giving, so channels that sell gifts or are in the Christmas niche can expect a higher CPM during this time of year.
The Type of Ads On Your Videos
The type of ads that you have on your videos can also affect your CPM. For example, if you have pre-roll ads, which are skippable after five seconds, you can expect a lower CPM than if you had non-skippable ads.
For instance, the CPM for advertisers with pre-roll ads is around $16.19, while the CPM for advertisers with non-skippable ads is around $22.35.
Content Made for Kids
YouTube has a separate platform for content made specifically for kids. If your channel is on this platform, you can expect a higher CPM than if your channel were not on this platform.
In this metric, the CPM for advertisers on the YouTube Kids platform is around $32.81, while the CPM for advertisers not on the YouTube Kids platform is only $21.18.
How “Safe” the Videos Are
Finally, the “safety” of your videos can also affect your CPM. Videos that are considered to be “unsafe” for advertisers, such as those containing profanity or violence, can expect a lower CPM than “safe” videos.
This is a metric established by YouTube in order to protect advertisers from having their ads shown on videos that they may deem inappropriate.
Common Mistakes When Trying to Improve Your CPM
Now that you know what affects your CPM, here are some common mistakes that people make when trying to improve their CPM. These are not meant to be exhaustive by any means.
Not Targeting the Right Audience
One of the most common mistakes that people make is not targeting the right audience. If you’re not targeting the right audience, you’re not going to get the results that you want.
Make sure that you target your ads appropriately by using demographic targeting, interests, and keywords.
Not Optimizing Your Videos for SEO
Another common mistake is not optimizing your videos for SEO. If your videos are not optimized for SEO, they’re not going to be as visible in search results, which means that fewer people will see them. This will result in a lower CPM.
Make sure that you optimize your videos for SEO by using keywords, tags, and descriptions.
Not Creating Engaging Content
Another mistake that people make is not creating engaging content. If your content is not engaging, people are not going to want to watch it, which means that your CPM will be lower.
Make sure that you create engaging content by using interesting topics, high-quality visuals, and a strong call to action.
Not Using AdWords
Finally, one of the most common mistakes that people make is not using AdWords. AdWords is a tool that allows you to target specific keywords with your ads. If you’re not using AdWords, you’re missing out on a valuable opportunity to improve your CPM.
Use AdWords to target specific keywords with your ads and improve your Youtube CPM means by which you raise the value.
Your YouTube Career Waits
All in all, if you want to have a successful advertising campaign on YouTube, it is important to understand the YouTube CPM meaning and how it works.
By taking into account the factors that affect CPM, you can create a more effective ad strategy that will reach more people and result in a higher return on investment. So what are you waiting for?
Start planning your YouTube career today! Get in touch with us now to learn about running Ads on YouTube.