For creators and brands with YouTube channels looking to monetize their offering, CPM, RPM, and watch time can be confusing statistics. What’s a good view duration? How can the click-through rate be improved? Our run-down of the key YouTube metrics for content creators walks users through everything they need to know to run successful YouTube channels.
What is CPM?
CPM is the amount of money an advertiser pays for 1,000 views of their video advertisement. It stands for ‘cost per mille’. Although CPM is an advertiser-centric metric, creators need to know the CPMs their content commands so they can understand the monetization potential of their content, niche, and audience.
The higher the CPM, the greater the advertiser demand. Since content with high CPMs tends to have high engagement from desirable audience demographics, such as viewers in high-value niches like beauty, eCommerce, and insurance, it can be a great sign a channel has earned an engaged user base, as well as an important monetization health signal.
Examples of things that make commanding higher CPMs tricky
Some channels will have a harder time commanding high CPMs than others. The following makes improving CPM more complicated:
- Channels that cater to many different audiences. Advertisers want to get their offerings in front of the right people, so demand is highest for videos that attract specific audience demographics. Channels with broader audiences aren’t as attractive.
- Audiences with low purchasing power. If most viewers are children, they won’t be able to buy advertised content themselves. It’s why channels covering topics like gaming can have surprisingly low CPMs.
- Viewers in countries with low CPMs. CPMs vary with location. Channels that don’t appeal to viewers in high-CPM countries, such as the US and Germany, will struggle to reach higher rates.
Other factors that impact CPM include the ad formats available (non-skippable ads guarantee viewer engagement, whereas lots of viewers will skip through ads given the option) and the niche a video serves. If CPM is low, learn how to improve it.
What is playback-based CPM?
On Youtube, advertiser metrics are split into two categories: CPM and Playback CPM. CPM works out the cost for advertisers based on 1,000 ad impressions. Playback CPM works out the estimated value of 1,000 monetized video playbacks. For example, if a video is viewed 1,000 times, with 750 of those views containing one ad and 250 containing two ads, there would be 1,250 ad impressions and 1,000 monetized playbacks. As many videos have more than one advert, Playback CPM is generally higher than the CPM.
For creators, higher playback-based CPMs indicate greater ad serve frequency, which typically coincides with longer watch times and better audience retention. Average watch time and video completion rates (the number of people who watch a video to the end) can have a significant impact on playback CPM, since the longer a viewer watches a video, the more advertisements they can be served.
What does RPM stand for?
RPM is the amount of money earned by a creator per 1,000 video views. It stands for ‘revenue per mille’. RPM is different from CPM because it’s the amount of money an individual creator takes home after YouTube’s 45% share of the CPM. It also covers a wider range of monetization channels than CPM, which relates to advertising spend alone. In contrast, RPM includes revenue from other sources such as Channel Memberships – a feature that lets creators further monetize their channels through a Patreon-esque model.
While CPM metrics can help creators track their earning potential, RPM will give them an accurate idea of the amount of money they’ll ultimately receive.
What are ad impressions and why do they matter?
Ad impressions are the number of times an advert is watched by viewers on a video. The advert can play for just a second and still count as an impression – however, advertising slots with higher engagement metrics will command higher CPMs.
To increase the number of ad impressions on their channel, creators should turn monetization on for all of their videos, make mid-roll ads available for videos 8 minutes or longer, and choose to support all ad formats. They should also consider how they tease content throughout their videos to keep viewers engaged.
Now that YouTube has Shorts, it’s easier to give viewers all lengths of content to diversify and keep engagement high. Creators can increase ad impressions from Shorts by turning on ad revenue sharing for the Shorts feed.
What’s a good click-through rate (CTR)?
Impressions are the number of times viewers are shown a YouTube video’s thumbnail in their search feed or recommendations queue. They’re different from ad impressions as they measure the visibility of YouTube videos, rather than YouTube advertisements.
The impressions click-through rate is the percentage of viewers that click on the video thumbnail, instead of just scrolling past. To calculate the click-through rate, YouTube divides the number of clicks by the number of impressions, then multiples this total by 100. Half of all YouTube channels have an impressions CTR between 2% and 10%, so a good click-through rate should sit within this range and steadily improve.
If the impressions number is low, it suggests YouTube doesn’t find content relevant or engaging enough to show it to many users, or to push it higher in the search results. To combat low impressions, creators can try researching relevant keywords to add to their video titles and descriptions and work to improve engagement metrics like watch time and completion rate.
If impressions are healthy but the click-through rate is lagging, this suggests viewers simply aren’t finding the teased content enticing. Creators could consider how to make their titles more engaging and test new video thumbnails to improve their click-through rate. Over time, if impressions are high but the click-through rate is poor, YouTube is likely to stop prioritizing the content.
What is watch time on Youtube?
Watch time is the total amount of time viewers have spent watching a video. Alongside view duration and completion rate, it’s a key engagement metric the platform uses as a shorthand to assess content quality and entertainment. Videos with longer watch times are ranked higher by the YouTube algorithm in search results and recommended to more users: increasing the chances of subscriber base growth and exponentially impacting the number of views a video receives. As more viewers lead to more ad impressions, this translates to more take-home pay for creators.
To improve watch time on YouTube, creators should focus on building loyal subscriber bases, target appropriate keywords in video titles and descriptions, and offer compelling content in the first few minutes of each video.
What is audience retention?
Audience retention measures how long viewers spend on a video before clicking away. Unlike watch time, which shows creators the total time viewers have spent on a video or channel, audience retention lets creators see how much of a video the average viewer is watching and at which point the greatest percentage of viewers leave.
YouTube rewards creators with higher audience retention figures because it’s another signal that a video is entertaining and high-quality. Because of this, the platform prioritizes videos with high retention rates in its search and recommendation algorithms.
What’s a good retention rate on YouTube? Well, average view durations tend to hover around 50%, with anything above 70% considered to be performing very well. Databox’s benchmarking of 84 companies with YouTube channels found a median average view duration of 1 minute 31 seconds. It’s not just an important metric for YouTube’s algorithm, either: longer viewings mean more ads can be served per video, which further increases ad revenue.
Why are video completion rates important?
YouTube similarly recommends videos to users based on how many other users watched a video to the end (in other words, the video completion rate). They do this because a higher completion rate generally equates to better quality content. It’s one of the engagement metrics the algorithm uses to assess the caliber of a creator’s output and can have a big impact on overall viewing figures – since videos that get recommended more are much more likely to be watched.
Conversely, if a video has a low completion rate, or many users click away shortly after they start watching, it reduces the chances YouTube’s algorithm will recommend the content. That can signal curtains on a video’s viewing figures and negatively impact a channel’s performance.
Engagement and revenue metrics can feel like a bit of a maze. With this guide to the most important terms, content creators can focus on the most impactful statistics to grow a sustainable subscriber base and increase monetization potential.
For those with the basics down, localizing content for global audiences using YouTube’s multi-language audio tracks can lead to higher CPMs and longer view durations, further increasing monetization potential. Learn how Papercup’s AI dubbing solution makes the process easy.