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Did you know that over 500 hours of video content is uploaded to YouTube every minute? Advertising on YouTube can be a dream come true for a digital marketer. The amount of content and viewership is constantly growing.

Read on to learn more about this potentially lucrative digital marketing opportunity.

What Is YouTube CPM?

CPM stands for “cost per mille,” with mille being the Latin word for “thousand.” Basically, “cost per mille,” or CPM, tells how much a YouTube content creator makes per thousand views.

Where Does A Digital Marketer Come In?

Digital marketing companies who might want to advertise on a video pay the CPM to YouTube. YouTube takes a percentage of the money for the platform and then pays some out to the YouTube content creator.

Making Money With CPM

In order to make money off of YouTube, content creators need an AdSense account and to allow advertising on their videos. The ultimate length of the video determines how many ads can be fit into it – though not every video will qualify for advertising.

In order for a video to be advertisable, it must meet stringent content requirements. This can be a harsh reality check for many would-be content creators. Advertisable videos typically cannot contain much (if any) harsh language, cannot cover controversial topics, and cannot be something that may offend people.

What Is YouTube’s Take of CPM Payments?

As previously mentioned, YouTube takes a portion of the CPM payments before paying out to the content creator. YouTube’s portion is 45%, so if a CPM payment is $5, YouTube will take $2.25 for itself and then pay out the rest to the YouTuber.

45% can seem like a pretty big piece of the pie – and it is. Not only does this help YouTube make money as a platform, but it provides a monetary incentive to YouTubers to create a lot of content. More videos mean more views, and more views mean more CPM.

How Is CPM Measured?

It’s easy for a content creator to find out what their CPM is. It starts by accessing their AdSense account and clicking on the payments tab. AdSense will then detail the total number of views for the past month and how they were monetized.

To view the CPM, take the number of monetized views and divide it by the amount earned that month, then multiply that number by 1000.

Do All Ads Earn CPM?

Unfortunately, no. Not every ad will earn CPM. Only ads viewed from start to finish, or receive clicks, will earn CPM. Skipped ads do not, as well as some ads that go unseen because viewers use an ad blocker.

Luckily, YouTube has some flexibility in the types of ads allowed. One way to ensure that a content creator earns CPM on their video is to add unskippable ads.

Adding unskippable ads makes it much more likely that viewers will see the ad in its entirety, thereby increasing the YouTuber’s CPM. Unskippable ads can be something of a double-edged sword, however, as including too many can irritate viewers and send them looking for someone else’s content.

The Myth About Mobile Ads

You may have read online that mobile ads do not pay a CPM. It’s a common misconception about YouTube ads. However, it is false. Any ad watched in its entirety, whether on a PC or mobile device, will pay a CPM.

What Is the Average CPM?

CPM tends to vary quite a bit. In the US, the average YouTube CPM is between $6 and $8. Average CPM is not dictated by YouTube or by content creators, but by the interest of digital marketing companies. In countries with strong economies, such as the US or UK, the average CPM tends to be higher than in countries with weaker economies, such as Ghana or Malaysia.

What Weakens CPM?

Content that isn’t advertiser-friendly can easily weaken a YouTuber’s CPM. It’s important to censor (or outright avoid) offensive language, images, and subject matter.

YouTube frequently updates its policies around the creation of family-friendly content. Recently, they introduced an anti-bullying and hate-speech policy aimed at punishing potentially toxic content creators.

What Kind of Ads Can Be Run?

There are a few different types of ads that a YouTuber can incorporate in their videos. A recent option, and one that has been steadily gaining in popularity, is TrueView for Reach.

TrueView for Reach inserts ads with lengths ranging from six to 30 seconds into YouTube videos. Each of the ads is skippable after six seconds. The beauty behind these ads is that they don’t need to play through in their entirety in order to payout.

Instead, a YouTuber is paid once 30 seconds of ads have been watched in total.

Non-Skippable Ads

Non-skippable ads run for a total of 20 seconds and cannot be skipped. YouTube used to put a 30-second limit on them but lowered it to 20 seconds to save on users’ mobile data and, hopefully, keep them watching.

Non-skippable ads can be placed at the beginning of the video or at some other point over the duration.

Bumper Ads

Bumper ads are a bit like TrueView ads. Bumper ads are unskippable – which is nice – but are limited to only six seconds in length. Once 30 seconds of ad time (5 ads in total) have been watched, bumper ads will payout in CPM.

Understanding YouTube CPM

By now, you should have a sound understanding of how YouTube CPM works and how digital marketing companies can take advantage of it. CPM is paid to YouTube by digital marketers based on how many people view an ad in its entirety.

YouTube takes a portion of the money for itself and pays some of it out to the content creator. The more content a YouTuber produces, the more money they stand to make. More content also means more marketing opportunities for a digital marketing agency.

If you’d like to learn more about how the services of a skilled digital marketer can help you increase sales, contact us today.