This isn’t the holy grail. It’s not the answer to all your prayers, even if you happen to pray about video. In fact, if you are reading this and are thinking about creating the first video for your business or brand, you might feel overwhelmed when you are done. This is, however, an attempt to reframe the dialogue and thinking related to video ROI.
Here’s a quick summary of what everyone will tell you and what a quick search on Google will re-enforce. Video is huge. Video is everywhere. Invest in video.
I’ll agree that video is huge and everywhere, but getting from there to “let’s spend money on it” is a huge leap of logic. It’s like saying cars are huge and everywhere, so let’s invest in car companies. Most analysts these days will tell you to run away from investing in car companies, with the exception of Tesla (Disclosure: I own a minuscule amount of Tesla shares). So if we aren’t running to all things that are huge and everywhere, shouldn’t we at least take a step back to evaluate our investments in video more carefully?
I know that may sound strange, especially coming from someone who makes their living in the video space. However, I don’t believe that video is the right solution for every client every time. And after a client who produced dozens of videos with us in 2016 suggested that I write about video ROI, I decided it was worth re-visiting the topic.
I was surprised to hear that he was convinced enough in the value of video to fund it on a monthly basis for an entire year, but still not completely convinced on the video ROI. I was puzzled. So, I rolled up my sleeves, dug into a long list of resources, and attempted to make sense of video ROI that would also make sense to folks outside the space. Here goes.
A survey of the literature shows that most metrics suggest that video is ubiquitous. For example, according to Cisco’s on-going Visual Networking Index, “IP video traffic will be 82 percent of all consumer Internet traffic by 2020, up from 70 percent in 2015.” If we drill down into one of the biggest channels for online video, YouTube, the case for ubiquity continues. “YouTube overall, and even YouTube on mobile alone, reaches more 18-34 and 18-49 year-olds than any cable network in the U.S.”
The problem with these metrics is that they offer information about the volume of video being produced and watched, but little information about the KINDS of videos. You can’t be sure if a particular metric refers to a disproportionate amount of table-top kitchen recipes, Snaps of people using the doggie filter (which is the best), or actual educational videos. And without knowing much about what kinds of videos we’re talking about, it’s hard to even start a discussion about ROI. Yet rather than categorizing videos from a customer-centric point of view, getting to video ROI requires a different kind of categorization.
Categorize Your Video Strategies By Paid, Owned, and Earned
Ever since the first TV ad in 1941, marketers have lived in a world of (somewhat) immediate gratification. They create an ad, buy some ad slots, and then promptly wait for the results to come in. That model hasn’t gone away. In fact, we almost immediately copied it over to digital once the Internet became ubiquitous. We often refer to it as “pay-to-play”. Or, if you’re in the agency world, it’s just “paid”.
However, we’ve more recently added a content marketing model that is slower to create traction, but sometimes even more powerful than paid. Most of the content marketing model is propagated through digital, and OTT if you’d like to separate that out. As we’ve gotten savvier, we’ve used content from our content marketing and “boosted” it, thus creating a derivative of “paid”. Some might argue that it’s now all “paid” but we’ll leave that discussion for another day.
Paid tends to yield faster results. It’s also what we’ve been used to for decades. So, in a way, we tend to rely on it in the wake of uncertainty. The only issue is that it can be dramatically inefficient. And so if you’re not careful or hire the wrong help, you can destroy your margins playing the paid game.
Content marketing, on the other hand, is a slow uphill climb to a high mountaintop. It is the “owned” side of media. And when done right, it can also convert to “earned” media. Of course, the bar for earned media, in an increasingly cluttered world of video is very high. If you are counting on social media channels for distribution, the algorithms are geared towards volume and consistency. Post a great video once, it might go viral, but it more than likely will not. You probably have a better chance of winning the lottery, unless you are already famous. Post a video each week for several years, you’ll slowly build an army of followers. That is how almost every “celebrity” YouTuber has done it. YouTube rewards consistency, with most top contributors posting 1-3 times a week. On the other hand, most brands are completely inconsistent with posting, which makes it no surprise that according to socialblade.com, not a single business or brand cracks the top 100 YouTube Channels.
Once you are having a dialogue (both with internal stakeholders and external partners) about paid, own, and earned video strategies, that’s when you can truly start to set expectations about outcomes. Then you can eventually get to work!
The bottom line is that paid will almost always outperform owned and earned in the short term. And that’s kind of a no-brainer when you start to think about it. If you’re putting media dollars to support your paid strategies, then you logically expect an audience immediately on the back end. On the other hand, owned/earned video strategies will almost always outperform in the long term. It may take up to 6 months to see some tangible results, but you will eventually see them.
Owned/earned video strategies also have a strong ancillary effect of bringing you closer to the customer. When you are forced to come up with content that stands alone and will drive engagement of some sort, the bar for your storytelling is high. When you are doing it right, you shift from telling a story about your product to telling a story that helps your customer learn and derive some kind of value. Where marketers often go wrong, and you can see this showcased on YouTube repeatedly, is when they make content that is really intended for paid strategies, but they attempt to make it work for owned/earned strategies. A typical example is when a marketer simply takes a commercial that was shot for TV and they post it on a YouTube channel. Audiences on YouTube are not there to see commercials, which is why YouTube even allows you to skip pre-roll, so it’s no surprise that the performance is typically abysmal with this kind of strategy.
So before embarking on a video campaign or program, take a hard look in the mirror to acknowledge which game you want to play. Are you playing with paid or are you playing with owned / earned? Ideally, you’ll find the right mix off all three as your business progresses through different stages of growth.
Establish Key Performance Indicators (KPI’s) for Video and avoid old man metrics (e.g. likes)
This may sound simple, but it is a step that many skip, even some experienced professionals. There’s so much excitement and glamour associated with video that there is a tendency to immediately start brainstorming ideas before before knowing what the goals are. Are you after awareness? Purchase intent? Leads? Sales? Depending on your industry, some of these may not be even be good KPI’s to consider.
Also, as you’re thinking through the appropriate KPI’s there are some important considerations. For one, and given the micro targeting capabilities of Facebook, how will you measure them relative to your target audience. If you are trying to drive awareness, you may hit 1MM people with a Facebook video, but if only 5% of them were in your target audience, you really only helped raise awareness for a small group of people.
Moreover, verify that you have reliable mechanisms for measuring your KPI’s. Depending on what KPI’s you choose, you may quickly realize that you’ll have to pay extra to measure something like purchase intent or brand lift. And if your campaign or plan is “low budget”, it certainly won’t make sense to pay to get these measurements. In the case of sales, you’ll almost never have a fully accurate way to determine attribution, even with a pixel. So you’ll have to settle for a measurement that is based on a corollary (e.g. we spent X and made Y sales, even though Y sales could be attributed to another factor).
Find Out What Your Competitors Are Doing.
This may sound like marketing 101, and that’s because it is. Most business will do a SWOT analysis and through that exercise find out what their competitors are doing. Unfortunately, the SWOT analysis rarely gets down to the level of video. However, when it comes to marketers, it very well should.
Consider that if you are a small business, only 9% of your peers are using YouTube as a channel for marketing. And given how many low cost production tools are out there, this presents a great opportunity to start creating some content that will stand out. So if you are a small business, you may very well want to verify what some of your local competitors are doing. You may have an outstanding chance to capture all or a majority of the share of voice through certain video channels.
If you are in the B2B space, 70% of your buyers are going to watch video for EVERY step of the process. Once again, if your competitors don’t already have video, you have a tremendous opportunity to step up. At the same time, you’ll be helping your SEO out was well.
And if you have a website, which I’m not sure which business does not these days, adding a video can increase your conversion by up to 80%. So, if your competitors don’t have video (or even have a weak video), again you have an opportunity to exploit that. You can even go one step further by using platforms like Unbounce to A/B test your landing pages. At Marching Penguin, we’ve employed this technique on a number of client landing pages to boost conversion rates anywhere from 25% to 225%. We’ve even tested videos with different endings to optimize performance.
Wrapping It Up
Video is hard. Anyone that says the opposite is either lying or has never produced a video. Yet by understanding the mechanics of video ROI, you can better allocate precious resources to make video a truly powerful tool. There is no doubt that video is huge and here to stay. The tools for producing it only continue to get cheaper and better. So, all that is left is finding a way to align video to your goals. Once you do that, video doesn’t become easy, but it certainly gets easier. You can choose video strategies that deliver against the KPI’s that are important to your company and industry; you can keep internal stakeholders happy / engaged; and, you can find ways to stay ahead of the competition. All of that sounds like a great recipe for ROI.