With over 2.6 billion monthly active users worldwide as of November 2022, YouTube remains the most widely used video-sharing platform. It is a goldmine for content creators as it is one of the most powerful channels for advertising. Gaining a comprehensive understanding of the critical aspects that affect a YouTube channel's CPM will help you substantially increase your following and revenue.
What does CPM mean on YouTube?
CPM refers to the cost per millie. It is the amount of money advertisers spend per 1,000 impressions on a video hosted on YouTube. The creator of the video earns revenue based on the number of monetized views of the video.
Importance of CPM
Videos that are considered highly valuable attract ads with high cost-per-click. Monetization rules of YouTube award high revenues for high-performing content. CPM refers to the amount of money that advertiser pays YouTube for displaying their ad to their target audience. YouTube takes 45% of the share and deducts taxes from the CPM. The remaining is calculated as the revenue of the content creator.
What determines CPM on YouTube?
In order to level up the revenue that one can generate from YT, the first step is to understand the working of its algorithm. Stay updated with YouTube's policies for content creators and abide by them. Videos that use profane language, discussing sensitive topics or being offensive is not attractive to advertisers.
Several other criteria impact YouTube monetization. Let's discuss this further.
Criteria affecting YouTube's CPM
There are 7 essential criteria that you must know from the YouTube monetization policy. They might look simple, but they profoundly impact the YouTube algorithm. Consider multiple criteria to create new content for your YT channel. You can also take a step further and modify your existing content to suit these criteria to enhance the quality of your YT channel.
Here's how to avoid demonetization in your videos.
Geolocation
The geographic location of the content creator that is listed on their YouTube channel determines the target audience. For instance, videos of YouTube creators in India are displayed to audiences in India. If the country's disposable income is less, the CPM is lower since it will not fall under the target audience of advertisers with high-income groups.
Age group of the audience
Since high-income groups tend to have increased spending power, they are highly targeted by advertisers. Viewers recorded to be in the age group of 35-64 who tend to have a stable and high income are the go-to group. This is where common problems with YT monetization arise for content creators targeting younger age groups.
Niche
The industry, niche or micro-niche of the YouTube channel determines the frequency of audience visits. If you are a laser-focused content creator, you will probably opt for a micro niche to serve a highly targeted group of audience. Regardless, the niche/industry that your YT content caters to is of high importance. For instance, the technology and entertainment industries are evergreen, whereas fitness is seasonal. Creators who need to be made aware of this face YouTube monetization issues.
Trends in the niche
Based on the niche of a YouTube channel, there are periods of lull and periods of high engagement. Global or local factors affecting the industry also cause seasonal changes in attracting the audience. The periods of lull witness YouTube monetization issues with ads. Keep a tab on the trends and cater to the current needs or hot topics of the industry to keep your audience engaged during the lull periods.
Types of ads run
Ads that are short, impressive and relevant to your YouTube channel's audience will see high CPM. It is crucial to onboard the right advertisers of products or services. This ensures the benefit of all the parties – revenue for content creator and advertiser, service benefit to the viewer/customer. You can troubleshoot video monetisation using this method if your content is performing well but not making sufficient revenue.
Child audience
YouTube channels catering to children in the age group 0-13 are prohibited from collecting personal interest information under Children's Online Privacy Act. Ideally, this means you need more information for the advertisers to use to target their ads. Even if the advertisers choose to roll their ads on your channel, the monetized views of the video would be less. This means, sales revenue would be very minimal.
Safe-for-view videos
Videos containing violence, nudity, guns or other obscenities are not considered safe for viewing. Make video content that is safe and clean to consume for your audience. Only then the advertisers will consider displaying ads on your channel.
Key takeaways
If you intend to create a source of revenue through YouTube, you must keep a tab on the CPM. Take into consideration the factors detailed above while creating video content. Analyze your YouTube channel’s content performance regularly to study the views and revenue to gain an understanding of what is working for you.
Determine the topics that will garner more eyeballs to drive increased and high quality traffic. This invariably attracts advertisers to YouTubers. In short, cater to the needs of your audience, keep them engaged, create meaningful content consistently and see your revenue across the roof.