Does RPM depends on CPM?

Bozhidar Kabzamalov

Bozhidar Kabzamalov

Well-Known Member
Hello and thank you for you answers in advance :) . I've been making youtube videos for about a year now and I still can't understand how the RPM and CPM work.For example I have these 2 months :

September 2013

Views : 865k
Monetized Playbacks : 458k
CPM : 5.33$
Monetized Views : 397k
Estimated Earnings : 1,346$
RPM : 2.03$

June 2014

Views : 1,314k
Monetized Playbacks : 500k
CPM : 6.5$
Monetized Views : 791k
Estimated Earnings : 1,768$
RPM : 1.34$

Like you see everything is higher in June - views,monitized views and playbacks, CPM but the RPM is lower than the other month.I wonder if RPM is even connected to CPM now.Can anyone explain please?
 
CPM is the Cost per Mille, or Cost per one thousand monetized playbacks. This is what the advertiser pays for their ads to be shown and it's averaged over all of the ad campaigns for the whole period. So some campaigns might have a $20 CPM, others might have a $0.50 CPM. When everything is mixed together, you get an overall average.

From there, the involved groups need to be paid. YouTube takes 45% right off the top. If you're with a network, they will take their revenue split from the amount remaining. What you actually get paid is called RPM, Revenue per Mille or Revenue per one thousand monetized playbacks.

In short, CPM is what advertisers paid for the ads. RPM is your cut after YouTube (and possibly a network) have been paid as well.
 
CPM means cost per 1000, it refers to what the brand or agency pays on average per 1000 views during a campaign.

Meanwhile RPM usually refers as to what you actually receive per 1000, like in the case of YouTube, they take a 45% platform fee to cover the sales, servers, technology costs.
With a network, there would usually be more revenue taken before the RPM also, usually 20-40% after YouTube takes their 45%.

Now the term "RPM" can be taken in many different ways and you really need to check which way is right before continuing.
Like if you are say with a network and looking at their dashboard, any of the following could be an accurate use of the term "RPM" :
  • Revenue per 1000 monetized playbacks, after YouTube's cut but before the network's cut.
  • Revenue per 1000 monetized playbacks, after YouTube's cut and after the network's cut.
  • Revenue per 1000 total views, after YouTube's cut but before the network's cut.
  • Revenue per 1000 total views, after YouTube's cut and after the network's cut.
So it really is unique to the situation but I would say with most cases on YouTube it will be the 2nd one.
 
Ok then wouldn't that mean that If I have higher CPM I should have higher RPM as well and not the other way around?

5.33$*0.55=2.93$
5.33$*0.55=2.93$*0.60=1.75$ But I Actually Have 2.03$ Rpm

6.5$*0.55 = 3.57$
6.5$*0.55 = 3.57$*0.60=2.14$ And Here I Have 1.34$ Rpm
 
What network are you with?

I've played around with the figures on the basis you stated of giving the network 40%.
and they all seem accurate within 1-2$ apart from that RPM figure.

Which I cannot come anywhere close to in any way, shape or form
 
A big factor in your RPM is your CTR (click through rate). You can have a high CPM but if your CTR is low, the revenue generated per 1,000 views will be low. You could have a low CPM but a very high CTR and do quite well. Having targeted compelling ads shown (which is out of our control) plays a big role.
 
Video Cranker said:
A big factor in your RPM is your CTR (click through rate). You can have a high CPM but if your CTR is low, the revenue generated per 1,000 views will be low. You could have a low CPM but a very high CTR and do quite well. Having targeted compelling ads shown (which is out of our control) plays a big role.
Click to expand...
A high CTR would not influence the difference between CPM & RPM.

If an ad is clicked on then the brand/ agency has to pay more for it to influence the RPM/ bottom-line which in turn means they are paying more for that view, usually 40-120%.
 
Shane.C said:
A high CTR would not influence the difference between CPM & RPM.

If an ad is clicked on then the brand/ agency has to pay more for it to influence the RPM/ bottom-line which in turn means they are paying more for that view, usually 40-120%.
Click to expand...

Perhaps I don't understand it, but when my RPM is low, my CTR is low, and vice versa. I know a fellow channel that does iPhone stuff and his CPM is very high because that niche pays a lot higher than toys. But since it is mostly broke high school teens who watch his channel and they don't click on ads, his resulting RPM is very low.

Taken to an extreme, if your CPM is $30 but you don't get a single click on 1,000 views, your RPM will be 0. If your CPM is just $5 but you get 25 clicks because people are interested in the ads, you will make some $$, you will have a positive RPM. So how does not the CTR have nothing to with CPM and RPM? CTR is where it all happens, nothing happens if someone doesn't click. I'd rather have a lot clicks with a low CPM than none or one or two with a high CPM.
 
Video Cranker said:
channel that does iPhone stuff and his CPM is very high because that niche pays a lot higher than toys
Click to expand...
Content targeted at >13s and PG in general is on such an up-surge at the moment that I'd say the rates on average aren't far off those for female 17-34 which among all mediums is consistently the highest costing and therefore paying.
Now mobile stuff tends to be male 17-44 which is a demographic worth maybe a third as much as the one I listed above so either you have some other things such as watch time that are ranking you very low or possibly YouTube is taking your demographics literally as (24-54?) adults rather than children watching on their parent's devices.

Video Cranker said:
Taken to an extreme, if your CPM is $30 but you don't get a single click on 1,000 views, your RPM will be 0. If your CPM is just $5 but you get 25 clicks because people are interested in the ads, you will make some $$, you will have a positive RPM. So how does not the CTR have nothing to with CPM and RPM?
Click to expand...

CPM just refers to the cost to an advertiser or agency and RPM is what you earn.

Now an Google isn't going to charge either of those $30 per thousand and then manage to lose the that in cyber-space? it has to go somewhere and when it goes into the Gross RPM then it will fall down into the Net which is your share.

Video Cranker said:
So how does not the CTR have nothing to with CPM and RPM? CTR is where it all happens, nothing happens if someone doesn't click. I'd rather have a lot clicks with a low CPM than none or one or two with a high CPM.
Click to expand...

A click influences the CPM yes, dependent on the campaign it could make that 1 impression cost 40-2000% more from the brand/ agencies budget but is it everything? no.
You could have 1,000 views with no clicks and still get money because most of those views will have still shown ads ad revenue is generated by ads being shown, that is what most of a campaigns budget will be spent on.
 
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