- As a small channel,
unlocking monetization on YouTube
is an exciting and momentous occasion,
but it's also filled with anxiety and uncertainty,
because let's be honest,
you have no idea how much you're going to make.
So let's find out why some channels rake it in,
while others pretty much earn peanuts.
First off, a question for all of you
who are already monetized,
what's your video topic?
What country do you live in?
What is your CPM?
Let us know in the comments below
if you're willing to share that information
that's going to help add more data
to what you see in this video.
Now, you've probably seen these very contrasting
new stories from the world of YouTube.
Some creators making millions
simply by publishing content on a regular basis.
And then there are other creators
who struggle to make a living off of YouTube
even though they have more subscribers and more views.
So why does this happen?
Well, put simply, many of these creators earn their income
from one revenue source.
And that is ad revenue direct from YouTube.
And that revenue can fluctuate massively
from channel to channel
because it's all down to CPM.
Simply put, CPM is the cost an advertiser will have to pay
to put their ad on 1,000 YouTube views.
That money is then divided up between YouTube themselves
and the creator.
The creator gets 55% of the cut.
Now, we've already done a video
that goes into a lot more detail about CPM,
and it's linked on screen now,
but watch this video first.
What we're gonna focus on in this video
is what affects that CPM.
And the first one is the video topic or niche.
Some niches on YouTube are more profitable than others
due to how many views the videos get
and how competitive advertisers are.
You also have to consider the average product
that is sold per niche.
For example, on a cooking channel,
you might see an advert for a bag of rice that costs $2.
On a photography channel,
it wouldn't be surprising to see a camera advert
that costs hundreds of dollars.
And when it comes to making money online,
those sorts of videos may attract advertisers
who are looking to sell conference tickets
and online courses,
which could cost well in excess of $1,000.
Now, some of you may have noticed
that gaming wasn't even in that list of CPMs,
because, well, it's not a very profitable sector.
It is way down the list in 15th position
with an average CPM of just $1.40.
And we'll tackle why that's the case a little bit later.
CPM is also affected by country,
but I'm not talking about where the video was created,
I'm talking about where it's watched.
Depending on which country the viewer is watching from,
CPMs for exactly the same video can vary wildly.
Now, generally speaking, the more developed the country is,
the higher of a CPMs,
because the people living in those countries
have more income and can buy more expensive items.
But as you can see,
there are always anomalies, Moldova, Algeria.
I don't know, maybe every single monetized Moldovan YouTuber
makes videos about finance and investing.
Next, we have audience demographics,
which could have the biggest influence yet on CPM.
If you're 22 years old,
still in college,
and only have a part-time job,
you don't have that much disposable income.
And let's be honest about this,
it's far more likely,
although not impossible,
that a 22-year-old student
is watching video game content than a 56-year-old CEO
of a tech company.
They're more likely, for example,
to be watching travel videos.
And so that's why a gaming channel
is likely to attract a lower CPM,
because of the typical audience
that watches that type of content.
But that's where volume comes into play.
You're more likely to get millions of views
on a gaming video
than you are a travel vlog, generally speaking.
Now, when it comes to increasing your CPM,
the one thing you do have a little bit of control of
is the type of adverts you put on your videos.
First of all, we have adverts
both before and after the video.
And if the video is over eight minutes long,
you can put adverts in the middle of your videos.
Yeah, mid-roll ads, aren't they a annoying,
controversial part of YouTube?
Well, let me ask you this.
Have you ever stopped watching a YouTube video
because of the interference of a mid-roll ad?
I genuinely haven't,
but I'd love to know your thoughts.
I think once you're two or three minutes into the video,
you're generally committed to the content
and you're not gonna be put off by an advert.
And now, just like television before it,
viewers have come to expect and accept adverts
on their videos.
Whatever way you slice and dice it,
both skippable and non-skippable ads
command the highest CPM,
so there's a great temptation to add as many as possible.
Oh, and if you're wondering what a reserved video ad is,
it's basically an advertiser
wanting to advertise specifically on a video,
and they're willing to pay a bit of a premium for it.
And then after that,
you've got the banners and the stickers
that will appear on the video itself
or on the watch page.
And obviously, they will bring in a lot less CPM.
Now, in contrast to controlling CPM,
through the adverts that you put on your videos,
the thing that you have at least control over
when it comes to CPMs is seasonality.
For a lot of channels,
the same thing happens every single year.
Through October, November, December,
CPMs slowly creep up,
and then as soon as you hit January,
they absolutely tank,
sometimes by as much as 25% to 50%.
And the simple answer is the holiday,
shopping, gift-buying season is over.
You've spent all of your money,
advertisers have spent all of their money,
Everyone's broke in January,
except for advertisers in the dieting space.
That's probably why I see loads of adverts for Noom,
if you're in certain countries,
in January and February.
So yeah, it can be really annoying
to do the same amount of work,
and sometimes get even more views on a video
at a certain time of the year
and earn less revenue through CPM.
But that is the nature of the CPM beast.
There are so many variables
and you have so little control over it,
you're never quite sure how much you're going to make.
And on top of everything we've just discussed,
you're always at the mercy of the gatekeeper, YouTube.
Copyright claims, community strikes,
YouTube changing the ad-friendly guidelines.
All of this can change in an instant.
But on the other hand,
to play evil's advocate for a second,
YouTube, to their credit, are always introducing new ways
to make money directly from your YouTube content.
Be it Super chats, Super fans, membership programs,
and the recently introduced Shopping shelf,
do make sure to spend a little bit of time
researching those opportunities.
So what is the takeaway from all of this?
Should you pivot your channel
so that it's watched only by Norwegians
who are interested in making money online?
Uh, sure, yeah, why not?
Or you accept that ad revenue
is not going to be the main source of income
for your YouTube channel.
Absolutely, monetization is a huge milestone
for most creators,
and turning on ad revenue on your content
and getting that passive income is so easy,
but you can make a ton more money on sponsorships,
brand deals, selling your own products and services,
and we're gonna show you how to do that
starting with this video over here right now.
And I've just realized this video is way short
of eight minutes long, don't!