According tomedia The Verge, creators of the YouTube Partner Program project can make money in a number of different ways – through advertising, subscriptions, donations, live streaming and YouTube Premium revenue. There are many variables, and now YouTube has finally collected all these numbers in one place and provided this information to creators in the form of a new monetization indicator called RPM.
RPM (revenue per thousand people) is an attempt at the standard metric CPM (cost per thousand people) that YouTube creators already use. Although the two may sound similar, they do two different things. RPM is more useful for creators who are trying to develop their own channels and figure out where their monthly income comes from.
CPM is a way to calculate charges based on thousands of exposures, measuring the cost before YouTube takes away its share of revenue, but RPM shows YouTube taking away the total revenue of its post-creators (including from advertising and other monetized areas). This does not mean that the creator’s income has changed much. Instead, it helps creators better understand where they make money and how income sharing is broken down.
“It’s kind of like you get paid every month, but you don’t know how that number comes from,” Matt Koval, a former YouTube creator who now serves as the platform’s chief creator liaison, said on Twitter. Basically, if CPM is an advertiser-centric metric, RPM is tailored for creators. For example, RPM includes the total number of views of the video, including videos that are not monetized. This is designed to show creators how much revenue they may lose from videos that generate views but do not qualify for monetization, and how much they can make to ensure that future videos are monetized.
“RPM is a snapshot of how fast you can make money on YouTube,” says a new blog post on Google’s support page. “Whether RPM goes up or down, it’s a good indication of what works and what doesn’t in your revenue strategy.”
The introduction of RPM on YouTube does not mean that CPM numbers don’t matter. The higher the CPM, the more advertisers pay for the ad, and the more money creators make on video. If a creator has a highCPM, it can be a pretty good indicator that a particular advertiser discovers the value of the creator’s channel and video. YouTube’s new RPM statistics don’t show the same ad metrics.
The RPM indicator is a relief to creators of how much monetization on the platform has changed, even over the past few years. On VidCon 2019, YouTube began introducing alternative monetization, including live streaming features such as channel membership (subscriptions), super chat (donations), and creator channels’ shelves to help channel owners diversify their revenue selling amid years of deep advertising problems on the platform.
YouTube is making other changes that appear to make it easier for creators to get more ad revenue, including allowing creators to use plug-in ads on eight-minute videos starting later this month. Previously, a video had to be up to 10 minutes to enable an interstitial ad.
In several open letters to the creator community, YouTube CEO Susan Wojcicki said transparency is the direction she and her team want to go. This includes transparency around how creators are paid. So introducing new metrics like RPM — hoping to segment each revenue stream for creators so they can better strategize — is a solid step in the right direction.