Proving the positive ROI impact of video marketing as compared with outbound strategies or other inbound strategies is tricky. You can turn to stats pulled from marketing surveys — but that proof doesn’t always reveal the meaningful insights you need.
For example, the Web Video Marketing Council in its 2015 B2B Video Content Marketing Survey Results notes that “73% of B2B marketers say video positively impacts ROI.” That's great, but it's also hearsay. Maybe some of those marketers don’t really know if video positively impacts ROI — after all, if marketers just spent a lot of money on a video campaign, would they all be totally honest when asked if it worked?
Others, like HubSpot, report similarly eye-turning stats, like the fact that “76.5% of marketers and small business owners…who have used video marketing say it had a direct impact on their business.” Impressive, but what exactly does "direct impact" mean?
HubSpot also reports that “4X as many consumers would prefer to watch a video about a product than to read about it." But does the fact that consumers prefer watching videos to reading blogs mean they’re more likely to make a purchase after seeing a video than they would after reading a blog? One can claim that it does — but that's inference.
Hearsay and inference don’t pass muster in a court of law, and they probably won’t convince your boss or the C-Suite either. Those CEOs and Marketing VPs are making business decisions, and they want cold, hard metrics that demonstrate unequivocally that video marketing is a smart investment. So, how do you get those metrics?
You Need to Create an ROI Model
Gathering real data means carefully tracking all costs associated with your video marketing campaigns and finding a way to measure how many sales they produce.
Here’s a 3-step ROI model that’s sufficiently rigorous and data-driven to make your case:
- Find Out How Much Your Campaign Costs
Break down every cost associated with your video campaign, and don’t cut corners: you don’t want to step on your own message with specious metrics. Include total marketing hours, and add at least 20% to the total to account for any unexpected costs, like needing an extra day or two to finish your shoot, or a last-minute decision that a $5,000 drone shot will take your video from passable to stellar.
Of course, working with a video marketing agency will make this part of the job a lot easier for you. It will probably also give you a more professional and effective video.
- Figure Out Your Break-Even Point
It’s difficult to determine which sales are directly tied to your video marketing campaign, but do your best, and remember that your numbers need to reflect your best faith effort and be persuasive, not dropped from the sky. That said, calculate how many sales you need to make to equal the total cost figure from #1. For example, if your total cost is $4,000 a month and you’re selling widgets at $100 each, you need to sell 40 widgets a month to break even. Every monthly widget sale over that number is profit. Be sure to track sales month-to-month and year-to-year to account for seasonal changes.
- Determine Which Sales Are Linked to Your Video Campaign
That means demonstrating that certain sales flow directly from your video campaign, and not from some other source. There are several online tools which will help you do this by embedding links specific to your video. For example:
- Tools like Clicky segments visitors to your website based on demographics and tracks their activity there in real time
- Google Analytics Acquisition Reports will show you where website visitors are coming from (such as organic search and “referrals” from other websites)
- YouTube Analytics lets you embed marketing prompts into your YouTube videos and funnel viewers directly into a sales channel
Bear in mind that this methodology puts you at a bit of a disadvantage since it only tracks sales from buyers who went directly from your video to your website, not those who view your video and go to your website directly two or three days later.
Implicit in your ROI model is a 4th step: using results for continual improvement in subsequent video marketing campaigns. ROI isn’t a one-shot deal. The metrics that your ROI analysis uncovers for one video are critical to knowing what’s working and what isn’t, and for improving ROI in the next campaign, and the one after that.
To learn more about the ways video can help your business grow, visit our website today and download our free eBook, "Creating a 2017 Video Marketing Strategy”.