People use production companies because they know they make amazing, eye-catching videos. But as engaging as videos can be, how do we know what they are actually accomplishing? How do we know what the ROI of our videos are? Measuring views alone is very outdated. Luckily for all of us, video is one of the most trackable content marketing media outlets out there. Determining ROI is easy, and there are several tracking methods depending on what your revenue goals are. Here are the three basic steps:
Step 1: Track campaign costs
This part is pretty simple. It’s the cost of your video production, plus any internal costs you might have. Maybe you are writing the script yourself or using employees as actors. Just add your internal hours and costs to the video production fee to get your total.
Step 2: Measure the financial impact of your video
This is the step you’re likely looking to learn by reading this article, so we’ll spend a little more time here. Depending on the goal of your video, here are a few options of how to track the increase in revenue your video generates:
Goal: Increase revenue
When additional sales is your endgame, tracking ROI is very simple. This is especially easy for eCommerce sites, phone sales, and in store sales. While you won’t be able to capture every single sale that occurs due to your video, you can get a solid idea of the sales that it generates by using one or more of these methods:
- Embed links to track sales that flow directly from your video to a conversion. Google’s URL builder is a great tool for this, and Animoto could be used to create buttons for these links.
- If you are unable to track sales through links, you can use direct response methods such as a custom sales phone number or url and then look at total revenue from those leads.
- You could also use a special promo code that is unique to each video, especially if you are trying to generate in store sales.
- This method is the least accurate, but you could also compare sales to similar product pages without video to get an estimate of the difference in sales.
Goal: Generate new leads
If you have a firm understanding of your conversion rate, tracking new leads from your video will give you enough information to calculate a sales estimate. If you know you convert a certain percent of your leads and know your average revenue amount per new lead, you can estimate the total sales based on your video this way. Here are a few ways to track the leads generated from your video:
Goal: Engagement and Brand Awareness
While this is the most difficult goal to calculate an actual ROI for, it is still an important aspect to review. Or perhaps you want to track engagement and awareness on top of actual ROI. Either way, here are a few ways to track your success:
- Use a heatmap, which is another feature included with Wistia software.
- Use brand specific analytics tools like Brandwatch.
- Track clicks, watch time, shares, and reach. Social sites like YouTube Analytics and Facebook Insights have most of the tools you could ever imagine, and you can get even more info from a third party app like SproutSocial.
Step 3: Do a little math
The equation to calculate your video ROI is (sales – cost) / cost, or in our case (Step 2 – Step 1 / Step 1). Take the revenue total you tracked in step two and subtract the total campaign costs from step one. Then, divide that number by the total campaign costs from step one. And voila, there is your video ROI!
How to improve your video’s ROI
Now that we know how to track ROI, what are some actions we can take to make sure we’re achieving the highest ROI possible? Here are a few quick tips to increase the effectiveness of your video:
- Make sure your video is targeted to your core demographic.
- Have a clear call-to-action in your video.
- Adjust the length of your video based on your posting medium – shorter for social media than YouTube or your website. Analyze dropoff rate on different media and adjust as necessary.
- Add titles on Facebook and YouTube so people can still understand your video if they are watching it on silent while at work or in public.
- Test, test, and test some more. A/B test your video, analyze the results, and use this info to improve your future marketing.