RPM vs CPM Formula on YouTube: Differences & Examples

RPM vs CPM Formula on YouTube: There is a lot of confusion and misleading definitions about this topic. Hence, StrangerShow came to rescue the creators.

Generally, to calculate & estimate the YouTube Adsense revenue, rpm and cpm are the main formulas to calculate.

Hence, to overcome all your doubts, I bring you this article with detailed explanations. So, we will see the in-depth topics of,

What is the CPM Formula?
What is RPM Formula?
Difference between RPM vs. CPM.

Additionally, we will use the word called, “Impression” frequently in this article. In YouTube creator’s terms, Impression refers to the ad or video displayed on the video or YouTube suggestion, respectively.

For example, your video appears on the YouTube home/suggestion page, and simply 100 audiences see that without clicking means, your video impression is 100.

For example, an advertisement appears on your YouTube video, and simply 100 audiences see that without clicking means, your video ad impression is 100.

I hope you’re clear. Without wasting further ado, let’s get into the topic rpm vs cpm.

CPM Formula

CPM stands for Cost-Per-1000 Impressions. It refers to the amount advertisers pay per 1000 impressions on the platform.

The amount per 1000 impressions is determined by the advertisers. Moreover, Adsense company could not make any compulsion on the advertiser to pay a certain amount per 1,000 impressions.

Okay, let’s see some of the best examples to understand you clearly.

Example

Consider that some soft drinks advertisement company called A. Company A invested $ 5,000 in the ad campaign. Furthermore, the company determined to pay $2.5 per 1000 impressions.

Now, $2.5 is the CPM of the A advertisement company. Therefore, if your video gets 1000 ad impressions (not mandatory to receive ad clicks, just ad impressions) from the company A product alone, your revenue is $2.5 per 1000 ad impressions.

However, this entire $2.5 will not come into your pocket. Because YouTube takes around 45% of the commission, and the remaining 55% comes to you. Hence, roughly, you will get $1.375 per 1000 impressions.

I hope the above examples clear your fundamental doubts. Try to reread the definition, and you will be all clear.

RPM

RPM stands for Revenue-per-1000 impressions. It directly refers to the estimated earnings of your 1000 video views. The RPM formula is,

However, it’s not your actual earning number, but it’s close to that number. Let’s see some of the examples to make you more clear.

Example 1

Consider your 5,000-view YouTube video. And assume you’re getting 2000 ad impressions/clicks from that video.

Like the above example, take the same company A; we know its CPM is $1.375.

So, for 2000 ad impressions, the X advertiser will be ready to pay you around $2.75.

Therefore, we have,

Earnings = $2.75
Views = 5,000

Now, let’s apply the RPM formula and do the calculations to figure out the estimated earnings of your 1000 impression RPM.

RPM = ($2.75/5000) * 1000

The answer is $0.55, which is your RPM. YouTube shows your RPM in the analytics dashboard; however, you can calculate independently. I hope you’re not confused with rpm vs cpm; anyhow, let’s see another example for better clarification.

Example 2

Now, consider you have the same views as 5000 from your YouTube video. Also, assume you get 2500 ad impressions.

But now it came from two ad companies, “A” and “B.”

CPM of “X” is $1.375
CPM of “Y” is $3.00

So, the A advertiser will pay you around $2.06 per 1500 impressions. Likewise, the Y advertiser will pay you $3 per 1000 impressions. Therefore, in total, you have $5.06 from the ad impressions. Let’s do the calculation of your RPM now,

RPM = ($5.06/5000) * 1000

The resultant RPM is $1.01 per 1000 impressions. Here, you see the RPM changed consistently, right?

Yes, it depends on your content, advertiser, their budgets, revenue commission, country, and other metrics. You feel high and low sometimes during your initial YouTubing monetized period.

On average, a good RPM for better revenue on YouTube is between $4 to $7. Above this number is great-performing.

RPM vs CPM on YouTube: Differences

Let’s see the differences between RPM and CPM. The table below clearly explains the difference between RPM and CPM.

CPM	RPM
Full-Form: Cost-Per-1000 Impressions	Full-Form: Revenue-Per-1000 Impressions
The amount the advertiser willing to pay	The estimated amount of publishers can earn
Amount desired by ADVERTISER	Amount desired by FORMULAS and Other Metrics
An actual amount the advertiser likes to pay	The estimated amount, the creator will get every month per 1000 views
An advertiser focusing area	A creator’s focusing area

I hope you understand the concept of RPM and CPM. You need to concentrate more on increasing your CPM, so your RPM will automatically increase. But the question is, how can I improve it?

It all depends on how wisely you make your content and inject keywords.

With the help of the best keyword finder tools, use the proper keywords in your video title, description, tags, and thumbnails. Over the period of time, you will receive a better RPM number.

For channel growth and getting high search volume keywords, use this keyword tool.

FAQs of RPM vs CPM

1) What is the difference between RPM and CPM?

RPM is the estimated amount to make per 1000 video views. In comparison, CPM is the amount the advertiser is willing to pay per 1000 ad impressions.

2) What is the CPM formula?

CPM = (Cost/1000 impressions)

3) What is the RPM formula?

RPM = (Earnings/views) * 1000

4) How to Increase RPM and CPM?

To increase RPM and CPM, focus on niche-related videos and use high-rate keywords on the video title, thumbnail, description, and tags.

Conclusion

In conclusion, the RPM vs CPM, and other revenue calculation metrics are not rocket science. Take care of your video SEO things, and the remaining parts will be done automatically. Comment here if you have doubts, let me help to clarify you. Also, share this post on Pinterest.

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