When partnering with YouTube and hitbox to monetize your gaming content with ads, you’ll run across various terms used to describe the money-to-traffic ratio. These terms generally include the likes of “RPM,” “CPM,” “eCPM,” and a few others, like “CPC“, “CTR“, and “ROI“. This can be confusing when just getting started, and it’s hard to know which initial is the most important to monitor. Ok, so let’s quickly define each term, then go into more depth.
- RPM – Rate Per Mille, or thousand impressions. In all instances where ‘m‘ stands for ‘mille,’ it means “per one thousand views” (latin). The Rate Per 1000 monetizable views is a packaged rate of all different advertising options; on YouTube, this includes in-stream ads (the ones with the ‘x’ in the corner) and video ads. This is different from CPM, which is strictly a measurement of cost per impression for a single ad type and unit.
- CPM – Cost Per Mille, or thousand impressions. CPM represents the cost of bids based on impressions. CPM can often appear inflated when using AdSense or YouTube and will not represent real-world income for a variety of reasons (including the fact that not all views are monetized, so it’s not a true per-1000 views like RPM is).
- eCPM – Effective Cost Per Mille, or thousand impressions. This is more commonly used for banner ads and does not make an appearance for video ads as frequently. eCPM is better used for large sites that serve high quantities of ad impressions.
- CPC – Cost per Click. This is how much an advertiser bids for every click action that is committed by a viewer. CPC is mostly meant for banner ads served through networks like AdSense (and others), as displayed on websites.
- CTR – Click-through Rate. This is a very important measurement of success or popularity for an advertising campaign. A higher CTR generally assists in raising ad prices, because advertisers will be more willing to pay for a higher CTR.
- ROI – Return on Investment. This is a term advertisers use to describe whether their advertising investment is paying off (getting return) through the publishers.
What Matters Most for Me?
While I can’t tell you explicitly what the most important measurement tool or initial is – they’re all useful in various ways and have different results for different types of content – I can point you in the right direction. For YouTube and video content, RPM is generally a more accurate representation of earnings that can be projected somewhat into the future. Note that advertising costs fluctuate throughout the year and generally increase toward quarter four, when advertisers are bidding more heavily to gain holiday purchases.
There is a formula for calculating RPM from impressions and estimated revenue. Here’s how it works:
Formula for RPM:
Ad RPM = (Estimated earnings / Ad impressions) * 1000
A YouTube video that receives $100 of estimated revenue and has 100,000 ad impressions (monetizable views, so it will have more views than 100,000 in total) will have an RPM of $1. The formula would look like this:
$1 = ($100 / 100,000) * 1000.
This means that, assuming traffic and advertising trends continue exactly as they are in our hypothetical scenario, every additional 1000 monetized views should produce another $1. Of course, it’s never a perfect system and prices will fluctuate, but this is a generally reliable tool to estimate.
I really hope this will serve you well and help you with the questions you had. Live! it up.