Revenue per Mille or RPM
Many video marketers have applauded YouTube’s suite of performance-tracking metrics. However, the COVID-19 pandemic ushered in times that plunged YouTube creators into uncertainty and anxiety. Returns were lower than normal, and the overall performance couldn’t have been worse. That’s when YouTube came up with a new metrics that seeks to help YouTube creators to better gauge their performance.
The new metric, Revenue per Mille or RPM, intends to make it extremely easy for YouTube creators to check how much they have been able to monetize on their video content. In simple terms, it allows creators to see their earnings per 1,000 views. The new metric will be provided alongside the platform’s current metric, Cost per Mille or CPM, which allows YouTube creators to keep tabs on the amount they are spending on display ads. Not to forget, YouTube also has metrics that track viewer retention and engagement.
Nonetheless, Revenue per Mille or RPM, isn’t just a mere metric to measure ad performance. The RPM figure of a YouTube creator clearly reflects the total money they make from their content. This includes their 55 percent cut of advertising revenue generated from monetized video views, along with income from YouTube Premium, Super Chat, Channel Memberships, and Super Stickers. The figure is calculated per 1,000 views for both monetized and non-monetized videos on their YouTube channel.
YouTube describes the new metric as a holistic method of measuring how creators’ channels are performing on the platform in terms of monetary earnings from views. The reason why the metric takes into account both monetized and non-monetized video views is because it’s seeks to show YouTube creators the big-picture of how much money their YouTube presence is generating, in relation to the amount of traffic the channel is drawing. Also, it shows alternative monetization methods for the very same reason.
Why is RPM a great thing?
Here are two reasons that clearly sums up why the new YouTube metric is useful for YouTube creators.
- The RPM metric measures the total revenue that YouTube creators generate from both ads that play within videos and from other sources on the video platform. The metric is the cumulative figure of all revenues from different sources on YouTube divided by the total number of views. The figure is fee-deducted, meaning you get to know your net earnings from your views.
- The new RPM metric of YouTube shows YouTube video creators how much money they would have made from video content that is non-monetized. The metric provides a kind of incentive to video creators to monetize every video when they find that there are good income-generating opportunities. The CPM metric is still useful since it indicates how much a YouTube advertiser is spending on an ad. This clearly shows that a higher CPM leads to more income.
The COVID-19 pandemic has called in difficult times for everyone. However, it’s great to see YouTube coming up with more tools that boost transparency, especially for stressed-out video creators. The times aren’t easy for YouTube too. Many businesses that relied on the platform for advertisers had to pull down their shutters. As such, YouTube has seen a fall in its number of advertisers. The platform certainly cannot bring back advertisers, but it can certainly help its existing or incoming ones by offering more tools that track their performance data. Such a move can help advertisers improve understanding and their overall decision-making process. It arms advertisers with the right data points to strategize their YouTube advertising efforts and reap the desired ROI.