Let’s talk about seven of the elements that go into determining how much money you make from ads on your YouTube channel so that you can kind of maybe better understand how to make a little bit more money from your videos going forward. That’s coming up.

Supreme Fishing wrote and asked this question.

What determines your pay rate on YouTube. This is actually probably a more complicated question than you think it is. There’s a lot of variables, a lot of things that go into determining this. I’m going to give you some of them.

But first of all, let’s be clear because there’s a lot of terminology thrown around about CPM and RPM. Now RPM is the actual amount of revenue that you earned. And to see what that number is, just go to google.com/AdSense and log in your AdSense account there. And you’ll see right there in the front of it, an overview page. It will give you your RPM, and that is the actual amount of money that you were getting paid per 1,000 views during the date range that you have selected there in your overview.

What Advertisers are Paying

Typically, it’s floating somewhere between like $1.80 and $2.50– is kind average here in the US, but there’s lot of factors that go into that, and let me tell you what some of them are. Number one, your pay rate is determined by what advertisers are paying to display ads on YouTube. That is called the CPM. And then that CPM gets split up between you, between your copyright holders, between YouTube, and everything. What you actually get is then considered the RPM.

And different industries have– you know, they’re paying different prices for ads. For example, if you’re attracting insurance ads, insurance ads, generally speaking, are paying a lot more than, you know, like the bottom of the barrel like toothpaste type ads would. So if you have a YouTube video that gives different insurance advice, that video most likely attract higher paying ads than say a personal hygiene video that’s teaching people how to brush their teeth, I don’t know.

Pay Rate

Number two, your pay rate is also determined by the frequency that ads are displayed against your content. Now, not every viewer sees an ad every single time they come to one of your videos. There are a lot of variables that go into this. For example, how long has it been since the last time that person saw an ad. If it’s been less than seven minutes, they won’t see another TrueView or non-skippable video in that frame. But if it’s been more than seven minutes, then they most likely will see one.

There’s also other things to consider. For example, YouTube will determine how tolerant is this video for ads? Like if we showed an ad on this video, do most people end up just clicking away and not investing into it? And it also determines well, how tolerant is each individual viewer? You know? Because YouTube gets to know how different people interact with ads. And if there’s someone who has a low tolerance for ads, that will have different display rate frequency than someone who has like a high tolerance for ads.

Location of Viewer

Number three, it also depends on what country your viewer is in. Because here in the US, there’s a lot more spending going on for an ad dollars here than they are in maybe some other countries or overseas, where a viewer there is most likely going to get a less expensive ad, like from an, advertiser that’s paying less. So if you have a lot of US and Canada type of viewers, you’ll probably make more than if you have a lot of viewers from like the middle of Africa.

Copyrighted Music in Content

Number four, your pay rate can also be determined by if there’s copyrighted music in your content or not. Let’s say you use music or something that you don’t own the rights to, and that copyright holder decided that they we’re just going to take a cut of the advertising revenue from your video, either completely all of it, or just a portion of it. That will make a difference. Even if you get millions and millions of views on your video, but all the revenue is being split between all these multiple parties, and you’re just getting a sliver or none of it at all.

Demand Amongst Adverstisers

Number five, your pay rate can also be determined by how much demand there is amongst advertisers to display their ads specifically against your channel. Now, let’s say you have a highly targeted channel, and you have a highly engaged audience, and these advertisers know I want my stuff exactly in front of the people who are watching Tim Schmoyer’s Video Creators channel, then if there’s a lot of them just bidding specifically on Video Creators, then that drives it up and then I make more money, and they spend more money.

Who is Selling the Ad

Number six, kind of going along with that, it also depends on who is selling the ad. So there’s a couple different ways this can happen. If you’re with an MCN, then your YouTube network could be selling– like their ad sales teams could be going out and getting the ads, and bringing them, and displaying those against your channel, and that could influence how much money you’re making.

It could be that YouTube’s own sales team is going out there, and they say hey, here’s Tim’s channel. Or maybe they pooled like your channel into a bucket of a collection of other channels and they’re selling all those channels together. There’s a couple different ways it works, but YouTube’s own sales team could sell directly, or there’s the AdWords, which is kind of like the leftover inventory.

Remnant views get sold through that, and that’s just an auction bidding war, basically. And that is where you get kind of the cheapest, most inexpensive ads coming here to YouTube. Now, that is not to say that if you are with an MCN, that you will get a higher RPM on your videos than you would just through AdSense, or through what people are paying through AdWords alone, because that’s not necessarily true.

Because remember, if you are with an MCN, then it goes back to the other principle I was talking about. It depends on how many parties your revenue’s being split between. So they might bring a higher CPM, but it doesn’t really matter if it’s being split now between YouTube, your YouTube network, and between you. Like, it’s just kind of depends. So MCN does not straight up mean more money.

Types of Ads that Your Viewers are Interacting With

Number seven, your pay rate is also determined by the types of ads that your viewers are interacting with. For example, ‘ a non-skippable pre-roll ad generally doesn’t pay as much as an engaged view would, which is from like a TrueView view where people can skip it after five seconds, and then they only pay if the viewer watches up to 30 seconds of that ad. Or consider that around your videos, there are ads also on the actual page, or even on top of the video itself from the bottom.

So there’s a lot of different ad like units and different ad types, and each one of those pays differently as well. So you can start to see how your pay rate, RPM that you’re earning actually gets really complicated, and this is just like a fraction of an overview of some of the things that go into determining what your pay rate is. So all that said, at the end of the day, how do you use that information to make more money on your YouTube channel?

Well, what it really comes down to is this. You just need to get a lot more views. Which I know sounds like I just totally insulted your intelligence, but it really does. The reason I say that is because a lot of you guys, you can get really entrenched in well, I’m going to make more insurance videos or let me make more kid content because kids are less likely to skip ads, they’re more likely to engage in ads. You can do all that type of thing, but at the end of the day, it just really comes down to making really good content that a lot of people want to watch and finding ways to monetize that even outside of AdSense, if necessary.

Like here on Video Creators, like this will most likely always be a very small channel, relatively speaking compared to the rest of YouTube, because my niche is so small. And so I’m not going to be getting millions and millions of views. So I have other things going on, a business model wrapped around this also. But for some of you guys, like you are– you’re making content that you can just get really massive views on. And if you can just do that, focus on making that, then the money just comes, and you don’t really have the play the whole game of like just trying to game the system in order to get an extra like $2.50.

My encouragement to you is don’t try to game the system. Just make great content, and work on promoting it. Work on building your audience, and work on especially getting more traffic from search and related videos. That’s really where you’re going to get the bulk of your ad revenue from, not as much, from my experience, from your actual subscriber view.

So hopefully that helps you out a little bit. If you have any tips and ideas about that, yourself. I’d love to hear from that in the comments below. If you want to learn more about this, definitely read the comments below. There are always really helpful people here in this community that’ll give you really great advice down there, and you’ll learn a lot from them like I do every single video.