Why $1000 CPM Won’t Happen

I don’t think Hank Green understands marketing or how advertising works. He recently posted this article on Medium about how if Youtube creators like him and his eminently more famous brother John Green, author of the popular YA fiction, “The Fault in Our Stars,” could push up the price per 1,000 views or even the price per view then YouTubecreators can earn a living from their creativity. His recent Medium article argument, for me, falls flat. His plan just isn’t effective. He maintains that if everyone gets a tiny piece of referral revenue for all the shares and ways that people’s content gets shared around the web then many people can make a living from constantly splitting the advertising revenue attached to their content. That way, someone with just a small tribe of loyal people could do quite well.

That’s not how it works.

The mystery as to why people buy what they do and when they do remains a mystery for a reasons. That is part of the reasons advertising is such an esoteric thing to spend money. Whether someone was or was not influenced by an AD is difficult to track. This is especially true for TV and other forms of mass media. Part of the wonderful thing with the internet was its ability to track how people behaved and when they bought as well as many other metrics. But you sometimes just have people show up and buy something or they really heard it through word of mouth or some other means. Does that mean ad dollars are wasted? No. Does that mean you have to spend carefully? In order to get the kind of advertising dollars that Hank is talking about the content has to be quality and the audience (ready to buy) has to be there to buy the items being advertised. Part of the reason TV retains such high advertising revenues is because TV works. People see it on TV and they buy it, in droves. The Internet has never created that kind of buying firestorm in a concentrated way. The internet does plenty of business and Google is built entirely on advertising revenue but Google relies on small amounts of dollar spent on a millions of search displays per day. You can only spread at $1.21 charge for a view of an ad so far. Google also has standards and quality that advertisers have come to be familiar with and trust.

Yes. Hank also doesn’t get branding. Despite his argument that brands need to align with popular YouTube creators, how many people do you know are ready to handle the business of a channel and platform or corporate sponsorship? Not too many. Having a 3rd party who knows what they are doing can be helpful and Google is making a smart move by working with quality creators and creating the personal brands of tomorrow. But trying to spread the limited advertising dollars around through progressively longer and longer streams of referrals brings us back to the same problem we had in the beginning: fractions of a penny payouts to creators.

We need to create new and exciting ways to raise up talent, create exciting endorsements, and give companies chances to tell their unique brand story through everyday creators like Hank and myself. That is how people can really get paid and the content that we are all creating becomes much more financially valuable.

$1,000 CPM isn’t going to happen, and that is OK.