Return on investment started out in life as a neat accounting term summarizing the yield from business activities. The formula would be ridiculously simple except not everything is easy to reduce to dollar values.
Nonetheless, this calculation does provide a useful starting point.ROI = (Benefit from the Investment LESS Cost of the Investment)
Cost of the Investment
Therefore, if we were selling chicken burgers at a bazaar in aid of charity, and giving of our time, we could determine our ROI as follows:
- Cost of buns, patties etc. to make 50 chicken burgers: $150
- Selling price of chicken burgers: $5 each
- Total value of sales $240 (cook and assistant ate one chicken burger each for lunch)
- ROI = ($240 LESS $150) DIVIDED BY $150 =0.6
In this case, the ROI is positive and we made a profit. If our ROI was negative, we made a loss.
Before you decide it really is that easy, how do we measure the pleasure our customers experienced while dining on the chicken burgers? To get that bit right, we need to some planning first up front.
How to Set Things Up to Measure the ROI of Video Marketing Campaigns
STEP ONE: Decide What Constitutes Success
Clearly, we need to decide how we want to influence customer thinking with our video before we start trying to do so. There is no one-size-fits-all objective in video marketing. Do we want to provoke a click through or an outright purchase, for example? One thing’s for sure. We cannot achieve a goal with certainty, unless we can define it and measure our success.
Moreover, our choice of goal pervades the video style and content. Remember Alice in Wonderland saying, “Would you tell me, please, which way I ought to go from here?”, and the White Rabbit replying, “If you don’t know where you’re going, any road will take you there.” We do not need that approach in video marketing. We need to know the answer before we start.
STEP TWO: Decide Who Gets Our Video, and How
The video style and content must match the target audience. It must also suit the ways we plan to deliver it. It makes sense to use promotion media that we control, at least at first, and to an extent. Ones that spring to mind are blog pages, email newsletters, social media pages where we are popular, and business YouTube channels. It is essential we build our video so it fits YouTube requirements. No matter where our customers click, the feed will come from there. We can explore other methods later, as our video marketing program expands. For now, let’s stick to what experience teaches us will work.
STEP THREE: Select the Benefits We Want to Measure ROI
The input measures, or costs are easy to calculate, and we can rely on our accountant to run the numbers for cost per subscriber, cost per download, and cost per purchase. However, as we shall see the benefits of video marketing are less tangible. Thus, we have rely on measures like:
- The demographic spread of video viewers
- The extent to which they shared the video
- The percentage that watched to the end
- The points at which the others clicked away
STEP FOUR: Strategize on How to Measure Direct Benefits
Thus far, we have only really dissected the input side of the ROI equation. We cannot purchase anything with clicks, likes, downloads, and views. Our analytics must be smart enough to relate actual purchases to these. We can only calculate actual ROI when we know the value of attributable sales.
However, we can also track non-monetized benefits, including new social media followers, new subscriptions, and the quality of interactions. Moreover, we can gauge our relative success by comparing results from blog pages, email newsletters, social media pages, and our business YouTube channel. This is useful input to where we could direct spending for the next video marketing campaign.
STEP FIVE: Find Someone to Help Us Analyze the Metrics
Metrics, which are just ways of measuring things, have become a specialist topic since the roll out of digital marketing. Sure, there are many apps for sale and some of them work well. But, do we really understand the values they churn out, and how these interrelate? At times like these, it may pay to hire an analyst for a fraction of the cost of the campaign itself.
STEP SIX: Develop Enthusiasm for Experimentation and Change
We all fall in deep ruts, and plough narrow furrows unless we watch ourselves. It’s a natural human thing to do, and a way of coping with the infinite variety of things around us. There is no one-size-fits-all in the video marketing world. The words are http://tubularinsights.com/resources/2015-b2b-video-content-marketing-survey/. No two marketing mixes are the same.
The Three Most Important Metrics for Video Marketing Campaigns
The Web Video Marketing Council is an important source of information for professionals. In 2015, it ran a survey of the effectiveness of the marketing medium. After consulting 358 B2B marketers, agencies, and professionals, it concluded that 44% had trouble with measuring ROI. Other significant findings included:
- 96% of B2B organizations are engaged in video content marketing
- 94% of respondents are involved in the decision-making process
- 73% say that video has positively impacted marketing results
- 41% plan to increase spending on video marketing in 2015
- 83% are using video content for website marketing
- 50% are using video content for email marketing
- 75% are optimizing video content for SEO
Here are our Top 3 Best Ways to decide whether your video marketing campaigns are worth your time and effort, and whether you might benefit from expert advice.
One: Lead Generation and How to Track Progress
Leads are potential clients whose initial interest we need to progress into sales. This process begins with generating their interest. In this article, we focus on doing this with videos, although they may also discover us through research. Videos are a proven, cost-effective way of generating leads.
They work best when we:
- Use our specialist knowledge to teach people how to do things
- Include hard-to-resist calls to action to visit our sales page or site
Of course, it’s important to track the progress of new leads through the funnel. Infusionsoft confirms many leads are lost because they do not receive the necessary attention. The key is harvesting contact information early, and using it to stay in touch.
YouTube has onboard tools that allow us to take our viewers to a registration page where we can encourage them to provide their email in exchange for a gift. Once we have their demographics, we can start working on them. Google Analytics can provide a broader view of where we are getting our traffic. This comes in handy when we do A/B Testing to fine-tune our marketing videos.
Two: Tracking How Much Cash is Coming In
When we know how much income a video is yielding, we can bring our ROI calculation to life, just as we did in the chicken burger example. Here’s the formula again, so we have it handy at this critical stage:ROI = (Benefit from the Investment LESS Cost of the Investment)
Cost of the Investment
Of course, there are still limitations to the accuracy of the numbers. Few people will purchase the product solely because they watched the video. Possibly our competition did the spadework but we won the day. However if we spot an uptick in sales while our video is running, we can probably ascribe the income to it.
Some video hosting platforms include effective analytic apps in their products. These can, for example provide overviews of subscriptions, clicks through, rewinds, fast-forwards, return views, and so on. Some, like Pardo and Hubspot report on what other videos our paid subscribers are seeing. This is seriously valuable market intelligence.
Three: The Video Sweet Spot: Actual Engagement
The ‘sweet spot’, in ball games like baseball and tennis is the contact point that sends the ball flying the best. This is a superb opportunity to make sales, since our video has fired up their imagination and enthusiasm. If we don’t notice engagement happening, we may not deserve the ROI that trickles in.
The first phase of engagement is when leads’ eyes fall on our screen. This is where we start building relationships. Not all may buy today, but at least all of them know us, and that’s step in the right direction. In this regard, the following are all important video engagement metrics:
- How many people watched at what time? How long were they online?
- Where are these people coming from, are the two metrics interrelated?
- How many subscribed, or copied the share link for their social pages?
Social media platforms provide a great service when it comes to understanding these trends. Twitter can tell us if our videos are in our top tweets, while Facebook Insights compare the buzz around our videos with our other posts. These almost tangible returns we get from videos may not convert readily into ascribable dollars. In this sense, marketing videos have immediate and longer-term gains. So jam today, and jam tomorrow too, despite what the White Queen told Alice.