YouTube Monetization Rate Depends on 7 Factors

The YouTube monetization rate is a major factor in the financial success or failure of a video channel.

Monetization determines whether a video gets any ads, how many ads it gets and the rate of revenue the ads produce.

How to track monetization is easy. How to increase it is not and subject to some guesswork. But hard evidence tells us that seven factors can make a difference with improving  monetization.

What is YouTube Monetization?

YouTube Monetization is the rate at which a content creator gets paid after YouTube takes its share of advertising revenue for distributing and marketing the video.

The YouTube analytics report has a section called Revenue Reports at the top that includes two sections. They are “Revenue” and “Ad Rates”.

“Revenue” shows the net revenue to the video producer from advertising and from “Red”, which is the ad-free, subscriber-based video product.

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YouTube Revenue Split

“Ad Rates” has the total revenue that goes to both YouTube and the producer. The split is 45 percent for Google and 55 percent for the contributor. By comparison, AdSense offers 68 percent to websites for display advertising revenue.

The second tab on the report shows “Estimated Monetized Playbacks”, which is the percentage of videos that display ads. This is a crucial rate for YouTube monetization.

YouTube doesn’t publish the average rate for all videos, and the terms of service discourage producers from revealing actual revenue numbers.

But posts around the Internet show wild differences in the monetized playback rate with some people getting only 20 percent and others getting 80 percent or more of video views that get ads.

The third tab is the “Playback-Based CPM” or GROSS cost per thousand ad impressions for videos. The fourth tab is just called “CPM” and reflects the final CPM after including video views from Red. It doesn’t have any ad impressions and lowers the average.

The Real YouTube CPMs

Producers often claim they are getting a $5 or $6 CPM on YouTube without understanding that the CPM appearing in Playback-Based CPM is a gross rate.

When Google takes 45 percent of the total revenue, the net or actual CPM for the producer declines by that amount. So a gross CPM of $6 drops to $3.30 while $5 drops to $2.75 net to the producer.

There is no reliable source on the net CPMs for YouTube. Some sources say the average based on their access to a large number of YouTube channels is about $2. A social utility site such as Social Blade estimates an average range of $0.25 to $4, and it depends on many factors such as the category of content.

My own small travel channel consistently achieved the upper end of that range. My clients who had news channels did less. With online advertising in general, travel usually commands a higher rate and news a lower rate.

7 Factors That Increase YouTube Monetization

Highly successful YouTube channels rely on other sources of income such as sponsorships to increase revenue. They also don’t talk about their own base monetization.

Smaller sites that can’t obtain sponsorships should consider the following factors that may increase their monetization rate.

1 – Quality of Videos

Videos with high retention rates not only signal quality but also have more opportunities to display more ads because they usually get more views. They also engage viewers for longer periods of time.

Overlay ads and sponsored cards offer the most opportunity for longer retention rates and longer videos.

Keep in mind that longer videos don’t always lead to longer retention rates. So don’t lengthen a video beyond what is reasonable. There is no ideal number. But I always targeted at least 60 percent. Overly long videos with a low retention rate have a labor cost that may end up with a low return on investment.

2- Subject of the Video

This is an assumption based on logic and experience. Logic and experience show that certain categories of online content attract higher-paying ads than other subjects.

For example, as stated above, travel is a higher-paying category than news. Automotive, health, finance and real estate do better than forums and other categories.

Only someone who has access to a wide range of YouTube topics can confirm this theory. But it has proven itself over and over again in other online environments.

3 – Number of Subscribers

My channel’s monetization rate seemed to increase after passing 100 subscribers. It also seemed to keep increasing as it added more of them.

Subscribers are beneficial because the channel has a chance to get them to come back, which again increases the number of views, revenue and monetization.

Channels with subscribers who don’t come back often also seem to increase their monetization rate as they add subscribers. YouTube apparently sees raw subscriber growth as a monetization factor.

4 – Viewer Response

The amount of comments, sharing and likes versus dislikes are all strong signals to YouTube about the quality of videos.

One of my videos had 33 likes versus three dislikes over a 90-day period and managed to gain more shares than the top performer. Both the total views and the monetization rate have skyrocketed in response.

5 – Popularity of Individual Videos

My most popular video had the highest amount of revenue. But its CPMs aren’t as high as the least popular video.

On the other hand, my most popular videos have by far the highest percentage of monetized playbacks over a 90-day period.

So increasing the views of a video increases the monetization rate, which leads to higher revenue.

6 – Length of Time

New videos appear to get little exposure for a period of weeks, months and even years. My best videos reached a high point 18 months after going live.

Newer ones not only get little exposure, they also tend to have the lowest rate of monetized playbacks. Patience is a virtue.

7 – Economy, Subject and Time of Year

Certain subjects are sensitive to the economy and time of year. The weeks leading up to Christmas is one of the most active times of year for retail advertisers.

Travel advertising also fluctuates depending on the destination and time of year.

Finally, the economy itself is a factor. Healthy economies have more advertising. Recessions often result in a plunge. A good example is the worldwide advertising plunge after the arrival of coronavirus.