Strategies for Assessing the Return on Investment of Your Explanatory Videos: A Comprehensive, Actionable Blueprint for Quantifiable Results
### Maximising the Return on Investment (ROI) of Explainer Videos
In the digital marketing landscape, explainer videos have emerged as a powerful tool to engage audiences and drive business growth. To justify investments, optimise future efforts, and gain a competitive edge, it's crucial to measure the ROI of these videos effectively.
To calculate ROI, several key metrics must be taken into account:
1. **Conversion Rate**: This is the percentage of viewers who take the desired action after watching the video, such as filling out a form or purchasing a product. 2. **Click-Through Rate (CTR)**: This measures how engaging the call-to-action (CTA) in your video is. 3. **Cost per Acquisition (CPA)**: Calculate the cost of acquiring a new customer or lead through the video. 4. **Revenue Growth**: Assess whether the video contributes to increased revenue.
The ROI formula is:
\[ \text{ROI} = \left( \frac{\text{Gain from Video} - \text{Cost of Video}}{\text{Cost of Video}} \right) \times 100 \]
Where: - **Gain from Video** is the additional revenue generated that can be attributed to the video. - **Cost of Video** includes production costs, distribution costs, and any other expenses related to the video.
## Enhancing Explainer Video ROI
To improve the ROI of your explainer video, consider the following strategies:
### 1. Optimise Content - **Engaging Storytelling**: Use narratives that resonate with your audience to increase memorable brand association. - **Clear Messaging**: Ensure the video clearly communicates your product's value and benefits. - **Compelling CTAs**: Use strong, clear calls-to-action to encourage viewers to act.
### 2. Targeted Distribution - **Select Platforms Wisely**: Identify platforms where your target audience is most active, such as YouTube, Facebook, or LinkedIn. - **Embed on Landing Pages**: Integrating videos into landing pages can significantly boost conversions.
### 3. Measurement and Analysis - **Track Key Metrics**: Regularly monitor conversion rates, CTRs, and CPA to understand how the video is performing. - **Adjust Based on Data**: Use insights from metrics to refine your video content and distribution strategy.
### 4. Budget Allocation - **Invest Wisely**: Allocate budget based on the expected return from the video.
By focusing on these strategies, you can enhance the effectiveness and ROI of your explainer video in digital marketing efforts.
Remember to account for distribution and promotion costs when calculating ROI, and avoid common pitfalls such as ignoring the "full cost," focusing only on views, lack of clear goals, poor attribution, and one-and-done thinking.
With the right approach, explainer videos have the potential for exponential returns due to dramatic increase in conversion rates, enhanced product understanding, reduced friction, significant reduction in support and sales costs, boosted SEO and organic traffic, increased customer lifetime value, and real-world impact.
[1] Wyzowl (2021) The State of Video Marketing 2021. [Online] Available at: https://wyzowl.com/state-of-video-marketing-2021/ [2] HubSpot (2021) The Ultimate Guide to Video Marketing. [Online] Available at: https://blog.hubspot.com/marketing/video-marketing [3] Vidyard (2021) The Ultimate Guide to Video Marketing ROI. [Online] Available at: https://www.vidyard.com/resources/video-marketing-roi/ [4] Forrester Consulting (2020) Total Economic Impact™ Of Vidyard Video Marketing. [Online] Available at: https://www.vidyard.com/forrester-tei-report/ [5] HubSpot (2021) Video Marketing: The Ultimate Guide. [Online] Available at: https://blog.hubspot.com/marketing/video-marketing-strategy
To heighten the effectiveness of explainer videos in business and investing, it's essential to optimize content, target distribution carefully, measure performance accurately, and allocate budget thoughtfully. This holistic approach can lead to significant improvements in the Return on Investment (ROI), a key performance indicator commonly used to gauge the success of such videos. By focusing on engaging storytelling, clear messaging, and compelling calls-to-action in content optimization, strategically choosing platforms, tracking key metrics like conversion rates, and refining strategies based on data, businesses can boost the ROI of their explainer videos. Wise budget allocation, mindful of the expected returns, plays a crucial role in this process.
