What Is YouTube CPM? A Quick Guide

what is a youtube cpm

What Is YouTube CPM? A Quick Guide

Did you know that there are more than 37 million YouTube channels floating around on the internet right now? Whether you’re a YouTuber wanting to make money off of ads or an advertiser wanting to pay for YouTube ads and make some money in return, knowing about the concept of CPM is important.

With a better understanding of CPM, you won’t have any problems figuring out what a good CPM rate is or how to optimize your CPM advertising. But what is a YouTube CPM exactly? To start, let’s explore what CPM stands for: cost per mille.

What Is A YouTube CPM?

“Mille” is the Latin word for a thousand, so the meaning of CPM really means “cost per thousand.” The “thousand” in this case has to do with the number of advertisement impressions your ads get. Specifically, CPM is the measurement of exactly 1,000 ad impressions on a single website page. 

CPM is actually not only a measurement of ad impressions but it is also a way to measure how much money you might be spending per 1,000 ad impressions. For example, if you are an advertiser and you want to buy up a piece of ad space, you will have to go to an ad publisher in order to do that. When you go to an ad publisher, the publisher will have a certain rate for that ad space that you will have to pay. 

A typical case would be paying around $2.00 per every 1,000 ad impressions for that particular piece of ad space. So, every time a particular ad gets 1,000 impressions, the ad publisher will get $2.00 richer and the advertiser will lose $2.00 to the advertisement space. $2.00 is a pretty typical price to pay for a piece of ad space. 

Some ad spaces may be cheaper and others may be drastically more expensive when it comes to the CPM. Why might the cost fluctuate so much, you ask? CPM is determined via a variety of factors on YouTube as well as the rest of the internet. 

By knowing more about how certain factors affect CPM, you can plan how to use your money in the best ways and how to save money too. One of the most important factors that affect CPM is the industry you are trying to market your brand. 

Impressions And Factors That Affect CPM

As you may already imagine, impressions are important when it comes to CPM. But what are impressions exactly? Many people mistakenly think that ad impressions are only clicks, but impressions actually go far beyond that. 

Impressions can include how many times a given ad is seen, how many times people click on that ad, and even how many times people click on the ad and then buy something from the website. Most of the time, views and clicks are the most counted ad impressions, although other ad price models may prefer to count purchases from ads. Impressions are very important because they can tell you a lot about how successful an ad is and if the money you’re spending for that ad is giving you a good rate of return. 

Let’s return to the subject of a particular industry determining the CPM. Certain industries are more popular than others and more popular industries tend to have higher CPM. This may sound unfair to you but think about it for a moment. 

For example, the clothing industry is much more popular than the industry for industrial valve lubricants. Many more people are going to be interested in buying pieces of clothing than valve lubricants. So, even though you might pay a bit more for ad space in the clothing industry, you are more likely to make back your ad money and then some. 

On the other hand, the CPM for ads in the industry of valve lubricants will be lower. Because there will be fewer people buying supplies of this kind, you still will make back your money because you didn’t pay much in the first place. So, no matter what industry you might be marketing in, the CPM rates are more or less balanced. 

More Factors That Affect YouTube CPM

The ad prices for YouTube ads can vary as drastically as ads elsewhere on the internet. If you want to run ads and really get deep into CPM advertising, you should know that the better the piece of ad space, the more money you should expect to spend. The best ad space will be the most popular and it will be shown on the most popular videos. 

The best ad space is also highly competitive. After all, it only makes sense for many different advertisers wanting the same great piece of ad space for their own brand advertisements. The more competitive a piece of ad space is, the more expensive it will be. 

Even the seasons can affect the price of YouTube CPM. You’ve no doubt noticed a huge influx of Christmas ads on YouTube every time Christmas starts to get near. This is no accident. Companies know that as Christmas approaches (along with other holidays), people want to buy things for the holidays. 

Ads are a perfect way to get business from people who are already in the market to buy various things. However, the CPM for seasonal ad space tends to be quite high. Even so, the results are often so good that the CPM hardly matters at the end of the day. 

Everything You Need To Know About YouTube CPM 

If you were wondering, “What is a YouTube CPM?” you should now know all about it and its importance. By taking advantage of CPM rates on YouTube, you can always make sure you get the most out of your ads.

To learn more, contact us here.

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