YouTube is rolling out a new metric in the channel analytics section that shows creators how much revenue they are earning relative to video views.
YouTube is adding a new RPM, or 'Revenue Per Mille', metric, which will make it easy to see how much a creator earns per 1,000 views of their videos.
RPM, or revenue per mille, is a take on the standard metric YouTube creators already use referred to as CPM, or cost per mille (sometimes referred to as cost per thousand). They both sound very similar but do different things. RPM is much more useful for creators who are trying to grow their channels and figure out where their monthly income is coming from.
Cost per mille (CPM) measures the average amount of money advertisers are willing to pay to show ads in a creator’s videos. CPM is said to be a less efficient way of measuring revenue for quite a few reasons.
First, it only takes monetized videos into account, not all videos. Second, CPM shows what advertisers are paying, not what creators are earning. CPM measures the cost of every 1,000 ad impressions before YouTube takes its share of revenue.
Substantially, if CPM is an advertiser-focused metric, RPM is tailor-made for creators. For instance, RPM constitutes the over-all number of video views, also containing videos that were not monetized. This is designed to show creators how much they could be possibly missing out on revenue-wise from videos that create views but are not suitable for monetization and adjustments they can make to guarantee that future videos are monetized.
By introducing RPM does not mean that CPM numbers are not relevant. An advertiser pays more for the ad as the CPM goes higher, hence more revenue is generated on a video by the creator. Higher CPM can be a pretty good indication of how valuable an advertiser finds that creator’s channel and its videos. Same kind of advertisement indicator stat will not be shown for Youtube’s new RPM.
Transparency is something CEO Susan Wojcicki and her team wants to work on as stated by her in a few open letters to the creator community. That includes transparency around how creators are paid. So, introducing a new metric like RPM — one that hopefully breaks down each revenue stream for creators so they can better strategize, this is a solid step in the right direction.