The ROI of Video In Your Digital Marketing Strategy
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Video is one of the biggest trends in digital marketing today, with 81% of businesses using video as a marketing tool, and with 72% of people saying they would rather use video to learn about a service (Hubspot), the statistics support the use of video in your marketing.
However, video can be an expensive medium; proving the return on investment (ROI) of it can become a stumbling block when it comes to getting buy-in from your management. If the value of a video can’t be determined, it becomes much harder to measure the successes investing in it.
Definition of ROI
Before we go any further, let’s just cover off a quick definition of ROI. The return on investment formula is the following:ROI = (Gain from Investment - Cost of Investment) / Cost of Investment
In the case of video, the costs aren't just attributed to production. There is also the cost of engaging your staff's time in filming and promoting the video as well. All of these expenses are variable, depending on the video, its purpose, and how much you want to promote it.
Determining the gain from investing in video
Determining the exact gain from video content can be more difficult – video content doesn’t often lead to direct conversions, so other metrics will need to be looked at to determine the value of a video fully. As there are many types of video, such as promotional, explainer, testimonial and more, there are many different types of metric you’ll want to consider tracking, depending on your goals for each.
Counting the number of views is useful if your goal is to gain more exposure for your video and use it build awareness of your brand or get a message out to consumers. You can determine ROI with the view count by working out the monetary value a video view has for your business. This estimate can be made by working out the lifetime value of a customer, then attributing how many video viewers end up becoming customers, and calculating from those figures what a video view is worth.
Perhaps more useful than simple view numbers, measuring user engagement with videos gives a much better idea as to how successful they have been. Buy setting up tracking so that you can see how many people have watched a video to halfway or full, you can get a better picture of how your content is being viewed by customers. You can then section out those that have watched more of the content, and see if they are more likely to become customers, giving them a higher value that you can use to determine ROI for the video.
Page Conversion Rate
If the videos are hosted on your website on product pages – as can be the case with explainer videos or product showcase videos – then the conversion rate of the page before and after is an excellent metric to see if the video has had a positive ROI. You can simply compare the conversion rate before and after and work out how much the percentage difference is worth to your business.
If getting reach on social channels is important to you, then this is a metric to track. Similar to views, you can use attribution models to attach a value to the social shares – it can even differ by social network! This allows you to determine the ROI of the video. This is very useful for assessing the value of videos you’re using to promote your brand.
The feedback from customers is another helpful metric – both for branded videos and for explainers. The ROI from this can be varied, it can come from similar value-based ROI calculations, or an estimation based on the customer and staff time saved by using the video – this can be seen from explainers that help customers to do things, such as an FAQ video.
Those are just some of the video metrics you can track, and some of the ways you can prove ROI from them. The ways that you determine how successful your video has been will depend on its purpose, but using these metrics, you will be able to make a judgement on if it has been an aid to your business or not.
A good piece of advice is to remember is that videos themselves will need promotion, so don’t spend your entire budget on just the product – remember to leave some to promote the video itself. The amount you’ll want to spend again depends on the purpose of the video – an explainer video on an FAQ page may only warrant an email blast, but a video designed to improve brand awareness should be promoted on multiple channels, such as advertising on social networks. Always remember to match up the channels you promote your content on to your buyer personas to ensure you target the right people with your advertising.
With this in mind, you can adequately measure the success or your video campaigns, and better understand if they are bringing in material benefits to your business.