Over the last few years, video has become a vital part of content marketing. Everyone’s talking about its effectiveness and unique properties that empower companies to take their marketing to a whole new level. Different companies are using different approaches, video types and techniques to target and engage their customers. Just because some video marketing strategy performs well for one business, it doesn’t necessarily mean that it will work for every company out there. That’s why return of investment is crucial for understanding the impact of your video marketing activities. In this guide, we’re going to find out how video marketing ROI can be properly measured, and which tools you can use to track and optimize your video campaigns. But first, let’s answer this: what is ROI and why does it matter?
What is ROI and Why Does It Matter?
ROI stands for return of investment, and it is a way to compare your expenses and profits from a given investment. In simple terms, Video ROI helps you determine how well your video performed in the campaign and which areas can be improved for the future. This is done by comparing different metrics, analytics reports and results.
Measuring your video ROI is a great way to find out how effective your campaign truly is. Take Cadbury’s video marketing campaign as an example. The company ran their “Chocolate Charmer” campaign on TV and online. Although Cadbury spent only 7% of their campaign budget on online advertising, they generated 20% of the sales. The video ROI was 4 times higher compared to their TV campaign – making it crustal clear how the company should invest in future marketing campaigns.
The Ultimate Guide for Measuring Video Marketing ROI
Reelseo found out that 73% of B2B marketers who participated in their study were satisfied with online video’s ROI and performance. This tells us that video as a marketing tool works great out of the box. But how can you know whether your strategy is paying off or not? You’ll need to measure your video marketing ROI. Here are few steps to get you started.
1. Get Your Goals Straight
Having a clearly defined goals is one of the most important things, before you do any measuring and tracking. You can’t possibly get somewhere without pre-defined goals. Video campaign goals are related to the actions that you’d want your viewers to take after, or while watching the video. Here are few common goals for video campaigns:
- Increased brand awareness
- Customer engagement
- Reaching higher conversion rate
- Customer base
- Customer Loyalty
Before you start your video campaign, it’s important to identify your goals – as they are the foundation to measuring video performance and ROI.
2. Decide on Metrics (What to Track)
Metrics help you to track the proper factors that affect your campaign goals. You can think of them as performance factors – critical to measuring your return of investment. Here are some of the most important metrics:
- Conversion rate
- Audience retention
- Engagement rate
- Average video view duration
- Click-through rates
- Likes, shares, comments and outreach on social media
- Play rate
- Form sign-ups
- Conversion rates on web pages with videos
- Re-watch rate
These metrics may differ from company to company. Which ones you go with, will mainly depend on your goals and the nature of your business.
3. Pick a ROI Measurement Framework
By now, you will have goals for your video marketing campaign, and a set of metrics to help you measure that goals. But how can you measure your ROI and process those results? You have 3 models/frameworks to choose from:
- Absolute ROI, used when your campaign is not related to other marketing activities and costs. This model allows you to get info on how your video performs and measure your costs per different activities.
- Relative ROI measurement is used to compare the performance of your video versus other marketing activities that you run. This will ultimately give you a good idea of where your focus needs to be in the future (on which campaigns). This ROI model is a bit more complicated than the first one.
- ROI with Attribution Modeling, is the most complex method for measuring video marketing ROI. Here, you measure the impact of the video on your individual marketing channels. Read more in-depth about this model here.
4. Use Tools to Collect Info on Viewer Activity and Behavior
So far, we talked about defining goals, choosing metrics to track, and models you can use to interpret those metrics. But you still need tools to track your audience and collect insights from your video marketing campaign.
Just in case you’re feeling confused right now, let’s explain what we have so far with an example. Let’s say that your goal is to increase brand awareness, and you have chosen likes, shares, comments and outreach on social media as one of your metrics. Also, you decided to use the absolute ROI model. But how can you know how many likes, shares and comments have you got so far in your campaign? How many people saw your video? What about demographics? You’re going to need a tool like Facebook’s Page Insights to get you all that info that you can measure – if you’re advertising your video on Facebook of course. But there are many useful video analytics tools like Google Analytics, which allows you to setup conversion goals. There’s also Wistia – the video hosting platform that offers some amazing features like video heatmaps, engagement graphs and viewer based tracking.
5. Analyze the Campaign Results
The last step is all about following how your campaign develops and tracking your metrics. Once finished, you’ll be able to compare the video expenses, metrics data and goals. This is the point where you’ll get a pretty good idea about your video marketing ROI. Regardless how good or bad your campaign went, the insights from this campaign will help you create and run more successful video marketing campaigns in the future.
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If you’re looking for experienced and professional video editors for your new video project, you should check out Valoso. It is a free-of-charge platform that enables companies to easily connect and collaborate with talented professional freelancers.
Images credit: Simon Cunningham (via Flickr), Joe (via Flickr)