YouTube creators in the company's affiliate program can make money in a variety of ways – through advertising, subscriptions, donations, live streaming features, and YouTube premium earnings. There are many variables, and now YouTube is finally collecting all of these numbers in one place and giving this information to developers in the form of a new monetization metric called RPM.
RPM, or revenue per mille, is an inheritance of the standard metric that YouTube creators are already using referred to as CPMor cost per mille (sometimes called cost per thousand). Although the two sound similar, they do two different things. RPM is much more useful for developers who are trying to expand their channels and find out where their monthly income comes from.
CPM measures the cost of 1,000 ad impressions each before YouTube pays its share of revenue. However, RPM shows a creator's total revenue (both from ads and from other monetization areas) after YouTube made the cut. This is not a change in the number of creators. Rather, it helps developers better understand where they make their money and how the revenue share is divided.
"It was a bit like getting a paycheck every month, but you're not entirely sure how that number came about," said Matt Koval, a former YouTube developer who is now the liaison officer for the platform , on twitter.
If CPM is an ad-financed metric, RPM is basically tailored to the creators. For example, RPM contains the total number of video views, including videos that have not been monetized. This is to show creators how much revenue they might miss out on videos that generate views but are not eligible for monetization, and can make changes to ensure that future videos are monetized.
"RPM is a snapshot of the rate at which you make money on YouTube," a new one Blog on the Google support pages read. "Regardless of whether the speed increases or decreases, this is a good indication of what works in your sales strategy or not."
YouTube introducing RPM doesn't mean that CPM numbers are irrelevant. The higher the CPM, the more an advertiser pays for this ad and the more money a creator earns with a video. If a creator has a higher CPM, this can be a pretty good indicator of how valuable a particular advertiser finds the creator's channel and videos. YouTube’s new RPM statistics do not show this type of ad.
What reassures the developers about the RPM metric is that it recognizes how much monetization on the platform itself has changed in recent years. At VidCon 2019, YouTube began introducing alternative monetization, including channel memberships (subscriptions), live chat features such as Super Chat (donations), and merchandise shelves on developers' channels to help these channel owners lower their earnings Diversify advertising issues that have existed for years on the platform.
Creator: You can now see how much you earn on YouTube compared to views you get with RPM in YouTube Analytics.
RPM = total revenue per 1,000 views
– TeamYouTube (@TeamYouTube) July 9, 2020
YouTube is making further changes to appear to make it easier for creators to get more advertising revenue, including creator access to mid-roll ads for eight-minute videos from later this month. Previously, a video had to reach 10 minutes (hence the 10:01 Meme that took off on YouTube) to enable mid-roll ads.
CEO Susan Wojcicki has stated in a series of open letters to the developer community that transparency is something that she and her team want to work on. This also includes transparency about how the authors are paid. Introducing a new metric like RPM – one that will hopefully break down any revenue stream for developers to better strategize – is a solid step in the right direction.