The ROI of Video Marketing: Why Video Will Boost Your Bottom Line

While every business is dedicated to providing top-tier services or high-quality products, the ultimate goal of any company is to make more money. Among the most efficient ways to improve your profits is by adding video to your current marketing efforts.

The ROI of video marketing is easily recognizable when done properly. As you put in the effort to make content that provides viewers with value and clear information, you’ll see an increase in your business financials.

To learn more about the ROI of video, you will want to identify how to measure it, how it has helped others, and how you can use it to your advantage.

What is a Video ROI and How Do I Calculate It?

The popular term of ROI stands for “return on investment” and represents the ratio you get of your net profit versus the initial cost put into something. In the case of a video marketing ROI, your return depends on the goals you have for your campaign.

ROI of Video Marketing

While you may not want to concern yourself with the math involved with calculating a return on investment, it’s important to know the various ways to determine how successful your video efforts have been. Follow this simple calculation to determine the value of your investment in video content:

  • Determine the initial cost of your investment, which is how much you paid a video production team or the hours you spent handling the video on your own.
  • Subtract this amount from the final value earned because of this investment, also known as your net return.
  • Divide the net return by the initial investment cost to narrow it down.
  • Then, multiply that new amount by 100.

While this is often considered a universal way to calculate an ROI, it may not always factor in the invaluable aspects that don’t involve specific numbers. Other details can always be found and added to the overall ROI of your video content.

Factors to Measure Your ROI of Video Marketing

Any successful business wants its biggest video ROI to come in the form of dollars and cents. But you’ll also find that video can boost many other facets of your company’s brand and popularity. Let’s take a look at a few additional factors to keep in mind as you identify your video marketing ROI.

Number of Views

Your view count is a great number to use when it comes to calculating your video content ROI. It helps you see how many people are watching your video and gives you a general idea of how popular it is. If one of your videos only gets 100 views while another one gets 10,000 views, it will be easier to review and adjust future content to follow the second example moving forward.

Video Engagement

You can determine how engaged people are in your videos by seeing how long they are watching and where individuals might be clicking away. If you’re finding a large number of viewers are hitting the Back button around the same time, you’ll have a pinpointed idea of what is leading them in the other direction.

Engaged in a video

Overall Conversion Rate

Video already has the highest conversion rate of any other type of marketing tactic. But it’s still important to determine whether viewers are taking the desired action you want them to after watching your content. Your video marketing ROI can be narrowed down as you see people click through to landing pages, like your page, or make a purchase.

Sharing on Social

One of the ultimate factors in the ROI of your video marketing is recognized in how many social shares your content gets. When a video really gets through to someone, they are much more likely to share it with their family, friends, and coworkers.

Feedback & Reviews

Reading online feedback is a key way to determine how well your videos are being taken by viewers. While you’ll always have “trolls” who leave negative comments simply to get a rise out of people, most commenters will share honest thoughts about what you’ve had to say. This can be used to change your outlook and efforts in future campaigns.

Cost-to-Profit

As we said before, the most important ROI of video marketing is how much money you are making from your videos. Pay close attention to your marketing funnel and see what is leading people to make purchases and the role video played in that. When you narrow down where the traffic is coming from, you can increase your efforts in that space and get even more conversions.

Video Marketing ROI Statistics

With thousands of businesses now using video marketing, any companies that aren’t taking advantage of this powerful tool are now part of the minority. The internet has millions of resources that prove how effective video content is when it comes to boosting your ROI. That’s why it’s important to consider ROI statistics about video marketing as you learn more about how it will impact your business.

  • Nearly 90% of video marketers find video provides a positive ROI.
  • About 87% of marketing professionals said video increased their website traffic.
  • 83% of marketers have stated that video boosts their lead generation efforts.
  • 4 out of 5 video marketers said they saw a video ROI specifically in their sales numbers.
  • 91% of marketers are pleased with the effect of video marketing on their social channels.

One of the most incredible video marketing ROI statistics we’ve seen comes from the efforts of the software company called SAP. Because of a heavy focus on video marketing, they got more than 9 million impressions, which led to a huge return on their initial investment.

How to Improve Your Video ROI

If you are already creating video content but you’re not seeing an impact on your profits, then there is likely a disconnect happening somewhere in your process. This could be anything from the quality of your videos to where you are sharing them, or even that they aren’t being marketed properly. Luckily, there are a handful of steps you can take to increase the ROI of video marketing.

1. Identify Your Target Audience

If you want your video content to do well, it is absolutely critical that you know your target audience. You cannot simply create videos and send them out into the void of the internet hoping that someone will find it and come your way. Every piece of content must be catered to a specific demographic, a general location, or some other niched down audience.

Find your target audience to improve video ROI

2. Create Meaningful Goals

How are you supposed to measure your video marketing ROI if you don’t know what you’re trying to achieve in the first place? Before making videos, sit down with your team and identify goals that will give you a clear direction as the content is created. They should always be measurable so that you can make changes as needed to improve the process as you go.

3. Take Advantage of New Technologies

As with all types of technology, new video tools are coming available almost every day. Do your best to keep up with these changes so you can stay ahead of the competition and see a better return with your content. This could mean anything from using brand new tech like Virtual Production to hiring a professional video production company that creates high-quality video content.

4. Do A/B Testing

It can be difficult to know how effective a video is without having something to compare it to. That’s where A/B testing comes in as you share two pieces of content at the same time. Create multiple videos about the same topic but with different points of view to more easily understand how well they are converting.

5. Know Your Distribution Channels

Where will the types of videos you’re making be most effective? As you determine the best place to share your video content, you will see a better video ROI as time goes on. Making social media packages will be beneficial for sites like Facebook and Instagram, while you should also be making landing page videos for your own website.

Only High-Quality Video Content Will Help Your ROI

While you should do everything you can to add video to your marketing strategies, you shouldn’t do it without a clear plan of action in place. Subpar videos will not boost your return on investment and may even have the opposite effect.

Always ensure your content has the highest quality to see the best video ROI possible.

A reputable video production company will be able to streamline this process and make videos that are designed to convert. As you think about what will be ideal for your marketing, consider how a professional video team will improve your ability to see a return on investment.

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