CPMs can be a powerful metric, but are usually misunderstood and misused. We’re on a mission to solve this problem by building a crowdsourced database of CPMs. Let us know if you think this is a good idea / want to contribute here!
I’ve watched YouTube videos for as long as I can remember (yes House of Highlights, you’re still my go to), but I never understood the often talked about world of CPMs. As soon as I started working with creators as part of Papercup, I quickly realised how murky and misunderstood CPMs are. In this post, I hope to lay out what exactly the problem is around CPMs and how we can solve it.
What are CPMs?
I don’t want to reinvent the wheel here defining the key terms, though it’s worth mentioning some of the basics.
CPM = cost per mille. A fancy advertising term that gives you a sense of how much advertisers are willing to spend on ads served on your content.
More technically, CPMs tell you how much advertisers paid per 1,000 impressions (not views) - impressions are when an ad is shown on your video. Confusingly, Google highlights a slightly different metric on the analytics tab of YouTube studio: playback based CPMs. This reflects the amount an advertiser paid for every 1,000 playbacks that included an ad.
Suffice to say, there’s an endless list of CPM variants, all of which give a different spin on how effectively your content is making money.
Why are CPMs important?
CPMs are important for two fundamental reasons:
- They tell you how efficiently your content has been monetized. In other words, did your video on how to make lasagne (disclaimer: I’m not the biggest lasagne fan) need 10,000 views or 5,000 views to generate $10? It’s a meaningful question to ask because of reason #2:
- CPMs inform your content strategy - what type of content to make and which regions to target
If you knew that a certain style of video or that catering your content to an audience from a different country was likely to result in a higher CPM rate, it would be in your interest to tweak your content strategy accordingly. I’m not claiming that monetization should be your sole objective nor that you should only optimize for this. Though if you depend on YouTube for a non-trivial portion of your income, understanding CPMs can be game-changing.
So what’s the big unanswered question?
It’s fairly well established that CPMs are important.
There is one other point of consensus: it’s difficult to know if your videos generate ‘good’ or ‘bad’ CPMs unless you sit on the extremes of the spectrum (roughly a few cents per 1,000 impressions on the low end, and $20+ on the high end).
Put simply, the world of CPMs is opaque and constantly misunderstood.
Why, you ask?
Because there is no central database you can compare your numbers against. Yes, there are articles and videos that divulge statistics for a handful of channels, though they usually reflect a really narrow data set and are static. CPMs change all the time depending on advertisers’ willingness to spend cash on digital ads. If Trump sends a Tweet about a trade deal; if the New York Times has an exposé on ads placed against inappropriate content; if I get featured on House of Highlights, CPMs change wildly (okay fine I was kidding about the last variable).
Not only do CPMs oscillate based on economic events, but they can also drastically differ based on country, content type, device usage, and many other factors. CPMs are so fluid and changing so constantly that creators are left with nothing credible to compare their data against.
How can we solve the CPM conundrum?
A constantly updated repository of CPM data with a sufficient number of channels as inputs. With just a few thousand channels across each major content category and country, we can amass a database that will help creators with their content and monetization strategy. We can create a simple dashboard for creators that shows updated CPM rates for country and content types based on submissions from thousands of channels.
Yes that’s a monumental task. There’s development required to build a product capable of amalgamating the relevant stats, maintenance of a system that processes and stores the data, outreach to creators to anonymously share their data- all amongst 100 other reasons why this is a tough challenge. But we think it’s something that can be a big help the entire creator community on YouTube.
So who can do this? I see two options:
- YouTube. They obviously have the data and can publish platform wide metrics which help creators. I know there are likely 1,000 reasons why they would be disinclined to do this, though given how much creators invest in the platform, I think it’s a gesture that would go a long way.
- Us. I don’t just mean me and the Papercup team, I mean any creator, media company or individual who uploads to YouTube. If you share this post with creator communities, we can at least figure out if creators need this as badly as we think they do.