Over time, YouTube has created avenues for creators to produce unique content, garner views, and boost traffic on their channels.
Additionally, advertisers and viewers are not left out as they can showcase their products or brands and enjoy access to this content.
For a long time now, creators have also been enjoying the benefits of CPM, allowing them to earn some extra cash from collaborating with advertisers to display ads on their videos.
While they don't get to keep the entire profit from CPMs, YouTube gives creators a fair percentage of the income.
Successful YouTube creators have affirmed that in a year, it is possible to earn about $5-$14 million from ads alone.
Interesting, right?
Now, are you a YouTube creator looking to increase your earnings?
Or are you new to the YouTube space and looking for ways to start earning in no time?
Finally, do you simply want to know more about CPMs?
Today's your lucky day, as I've taken time to explore the concept of CPMs and how it all works on YouTube. We are also going to explore YouTube niches with highest CPMs to help you level up your content production.
So, let's get to it.
What Are CPMs and Why Are They Important?
Pricing models such as Cost Per Click (CPC), Cost Per Acquisition (CPA), Revenue Per Mille (RPM) and Cost Per Mille (CPM) are terms you constantly hear in the YouTube space.
CPM, the most used marketing metric, refers to the cost advertisers pay for every one thousand impressions or views of their advert.
For instance, if a YouTube creator charges a $5.00 CPM rate, an advertiser that wants to display ads will pay $5.00 for every 1,000 impressions of its ad.
To build a career on YouTube or make it one of your primary earning sources, you must understand how to create high-value content in high-traffic niches that will help attract ads with high CPMs.
Therefore, the knowledge of CPMs is essential to help you assess to what degree your content is valuable, how much advertisers are willing to pay for an ad spot, and how much you can earn from placing ads on your videos.
CPMs vs RPMs - What Matters More?
Although they may sound similar, CPMs and RPMs mean entirely different things.
This similarity has made it quite confusing for many creators to tell the difference.
For starters, CPM stands for Cost Per Mille, which is basically cost per 1000 ad impressions.
On the other hand, RPM stands for Revenue Per Mille, which is the revenue generated per 1000 ad impressions.
Let's look at it this way. CPM is the amount advertisers pay per 1000 ad viewers on your video, whereas RPM is the amount you earn per 1000 video views. In other words, CPM is for advertisers, while RPM is for creators.
YouTube introduced RPM as a metric to assist creators in understanding how much they are paid after YouTube takes its share.
This analytical feature shows creators their estimated earnings for every 1000 impressions received on their video.
When your RPM increases, it means you're earning more money for every 1000 views, and if it decreases, it means you're earning less.
You can raise your RPM by, among other things, enabling all ad forms, turning on video monetization, and enabling advertising at eligible positions.
However, unlike CPMs, which can help creators determine which niche has the most potential to attract advertisers, RPMs go a bit further.
How?
More than defining a niche's potential, RPMs define how much creators can earn regardless of the niche.
How Do CPMs Work on YouTube?
When you create YouTube videos on your channel, your videos immediately become available for advertisers to display their ads as long as your channel is monetized.
An advertiser must pay a specific amount to display an ad, which is where CPMs come in.
When advertisers choose CPM rates, they can either go for a low or a high bid.
A low bid is the lowest amount an advertiser has to pay to have their ads shown in an ad spot.
On the other hand, a high bid is the highest amount an advertiser has to pay to have their ads shown in an ad spot.
Low bids can significantly affect how much a creator earns.
Why?
Even if their channel is getting a good number of views and the CPM rate for a particular ad is at the lower end, it would take a very high amount of views to get reasonable returns.
On the flip side, if a smaller channel garners numerous views and the CPM rate is higher, such a creator could earn a decent amount of money without having to do too much.
Here’s how to calculate CPMs on YouTube:
(Total cost of advertising/ Total number of impressions or views) x 1000
For example, if an advertiser is paying $100 as the total advertising cost, and YouTube shows the ad to 20,000 viewers, then the CPM will be:
($100/20000 views) × 1000 = 0.005 × 1000 = $5 CPM
That means the advertiser has to pay $5 for every 1000 views or impressions on its ad.
Top-Rated YouTube Niches With High CPM
The CPM rate for an ad on YouTube is usually influenced by the web traffic in a niche or sub-niche.
For example, the affiliate marketing niche has CPM rates of up to $22.
On the other hand, the travel niche can have CPM rates of $7-$12, while the technology niche has CPMs between $16 and $20.
Let's look at some of the YouTube niches with high CPM rates.
Digital Marketing
In today's business world, digital marketing is more important than ever. Many YouTubers in this niche are aware of this, as are the advertisers, who constantly rush to place ads in this particular niche.
Digital marketing is a broad umbrella that covers a wide range of strategies, including email marketing, search engine optimization (SEO), influencer marketing, and social media marketing.
Some creators have even shifted their focus to a micro niche, like influencer and social media marketing.
The CPM rate for the digital marketing niche ranges from $12-$22, with top channels like Neil Patel and GaryVee.
Lifestyle
The lifestyle niche remains one of the most popular types of YouTube content. For one, it gives viewers a glimpse into the lives of their favorite creators and makes them feel as if they are a part of their lives.
The lifestyle niche is vast, with a wide range of content, from Day in the life content to skincare and nighttime routines.
The CPM rate for lifestyle content on YouTube is between $8 and $12. Some channels thriving in this niche include Zoe Sugg and Casey Neistat.
Health and Fitness
YouTube is the ultimate spot for health and fitness tips. Several fitness-themed YouTube channels are dedicated to helping people improve their physical fitness levels and providing them with health tips to help them in their fitness journey.
And because with each passing day, more people are looking to meet desirable fitness and body goals, this niche has propelled itself to one of YouTube's niches with high traffic and, consequently, high CPM rates.
The CPM rate of this niche is typically between $7-$13. However, it's worth noting that you're likely to earn more cash if your channel is niche-specific. This will allow Google to place ads on your videos easily, accruing great returns on investment for you.
Examples of top YouTube channels in this niche are Body Hub and Love Sweat Fitness.
Travel
With an average CPM rate of $7 and an upper limit of $12, travel makes it to our list of YouTube niches with a high CPM.
Here’s why this is one niche worth venturing into. Aside from allowing viewers to live other people’s travel experiences virtually, this niche also offers an insight into what other parts of the world look like.
Due to this, the travel niche remains a high-traffic one.
Top channels in this niche include the World According to Briggs and Fearless & Far.
Technology
It's impossible for this niche to become defunct because technology is invented and innovated daily.
Also, there are numerous sub-niches to specialize in, from phones, gadgets, and cars to drones and laptops.
You don't necessarily have to be sub-niche-specific, as technology is incredibly vast and inexhaustible. However, you might want to consider it if you're looking to earn more cash. The CPM rate for this niche is around $16 to $20.
Examples of thriving YouTube channels in this niche are Linus Tech Tips, Unbox Therapy, and Marques Brownlee.
Fashion and Beauty
The fashion and beauty niche is highly profitable, whether you keep it simple with a Get Ready With Me (GRWM) video or go over the top with a luxury fashion try-on haul.
It's no surprise that fashion YouTubers are among the most popular influencers today, as they subtly set the trend for popular opinion on fashion.
With an average CPM rate of $3.13, depending on the content, the fashion and beauty niche is one that will always pique the interest of viewers.
Some popular fashion and beauty YouTube channels include Bestdressed, Use Less, and Teachingmensfashion.
Software
This would be the perfect niche to build your channel on if you are in a marketing company that sells software products.
Why? It’s pretty simple.
Many people use YouTube to research the specs or benefits of software products before purchasing them.
This presents an avenue to gather tons of views, depending on the quality of the content you’re delivering.
The CPM rate for software review channels is incredibly high, ranging from $9.22-$33.29. In addition, you can earn extra income by putting affiliate links to the software you're reviewing in the description of your videos.
However, it is worth noting that the CPM rates vary from time to time based on the demand for the product and the product brand.
Good examples of software review YouTube channels are Technology Advice and Keep Productive.
Cryptocurrency
If your expertise in Blockchain technology (specifically cryptocurrency) is top-notch, then you can earn a good amount of money from this YouTube niche.
Although Bitcoin has experienced a few declines in the last few years, many people are still interested in it. Especially considering the fortune people have made from it.
Therefore, creating a YouTube channel that focuses on crypto content is a good idea if you are interested in this niche and want to earn cash. The CPM rate for this niche is between $2.26 and $11.94.
Some top channels in the crypto niche include Altcoin Daily and BitBoy Crypto.
Personal Finance
With creators in this niche earning between $4 to $12 CPM for adverts on their videos, it’s not surprising that the personal finance niche has made it to the top of the earning radar for YouTube content creators.
So, if you're passionate about personal finance, including budgeting, mortgages, and savings, you could offer your insight to interested viewers and earn some cash while at it.
Examples of popular YouTube channels in this niche are The Swedish Investor, Let’s Talk Money! with Joseph Hogue, and Economics Explained.
Investment
Investment is another high-traffic YouTube niche with high CPM rates, as people constantly seek information on stock picks, investment advice, retirement tips, and financial news.
Popular creators report earning rates between $8 to $18 CPM in the investment space, which is quite enough to earn creators a decent income in my books.
Examples of YouTube channels in the investment niche are Casgains Academy and Practical Wisdom.
Real Estate
With millions of Americans spending more on housing than any other bill, it's no surprise that the real estate niche on YouTube is thriving.
Nowadays, many viewers look to celebrities, creators, and influencers to help them make important decisions, from purchasing a new home to investing in real estate.
Aside from a CPM rate as high as $40, this niche is vast, with colossal sub-niches that can earn you quite a fortune when done right with adequate research.
Examples of real estate YouTube channels are BiggerPockets and Lili Invests.
How To Increase Your CPM Rates on YouTube
Below are valuable tips to help you increase your CPM rates.
Don't Be Afraid to Try a Different Niche
Now that you know what niches are popular among YouTubers and advertisers, feel free to explore the ones that best align with your interests. Once you find any, start creating quality content that will direct YouTube users to your channel.
A pro tip is to bridge the niches by producing more video content in niches with higher CPMs.
Optimize Your Video's Meta Data
Meta Data is a cumulative of tags, titles, thumbnails, and descriptions that provide information about your video.
When the metadata of a video is optimized correctly to the target audience's taste, it encourages YouTube users to engage with your video. This will create more traffic on your video and increase your CPM.
Customize Your Thumbnails
Thumbnails are the small visual windows or mini-posters unique to each video on YouTube. It gives a visual representation of what the video is about.
You can customize your thumbnail to include eye-catching photos, fancy texts, good fonts, and other attractive elements.
Or you can simply use an aesthetically pleasing snapshot from the video as a thumbnail.
This way, you're guaranteed more views and, consequently, higher CPMs.
Use Captivating Video Titles
When choosing titles for your video, ensure you use a catchy title that will not only get you clicks but is also relevant to the content of the video.
This is super important, as the title denotes what your video is all about.
All in all, a catchy title will attract traffic to your videos, increasing your CPMs.
Increase Video Length
A YouTube video needs to be at least 8 minutes long to show ads in the middle.
Therefore, the longer a YouTube video, the more ads YouTube can place on your content, and the higher CPM you can earn.
However, if you're increasing your video length, keep your content engaging until the end and avoid stuffing your videos with too many ads.
Increase Your Watch Time
YouTube now ranks YouTube channels based on their viewership and subscriber base.
So, YouTubers with more than 1 million subscribers will have high-paying advertisers bidding to place ads in an ad spot.
In the same vein, channels with less than 500,000 viewers have a different target audience.
Therefore, the more time people spend watching your content, the higher your rank and, consequently, your CPM rate.
The Importance of CPMs on YouTube
As a creator, the amount of money you make overall depends on the niche, the content, the number of views, and the CPM rate.
So, it's not enough to choose a YouTube niche with high CPMs; you'd have to create fascinating contents that will garner you at least a thousand views or more to enable you to start earning cash.
Also, the amount an advertiser pays to have their ads shown is determined by the amount the competition (other advertisers) are willing to pay to have their ads shown in that same ad spot.
So, the more they pay, the more likely they will see their ads.
Finally, you should know that YouTube takes 45% of whatever income creators earn from their CPM rates, and they only get paid when viewers watch the entire ad or watch it for at least 30 seconds if the ad is long.
To check your YouTube CPMs anytime, go to your YouTube Studio dashboard and click on analytics to view your estimated monetized playbacks.
Good luck!
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