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If you want to stay relevant to your target audience, you can’t ignore video marketing. 

By 2021 video traffic will constitute 82% of all consumer Internet traffic. But why wait any longer if  43% of people want to receive new video content from marketers today. Brands that have already invested in video marketing receive 66% more qualified leads per year and witness a 54% increase in brand awareness on average. 

So should you prioritize video marketing over other marketing channels this year? Perhaps. This article will help you understand what impacts video marketing ROI and how to measure the effectiveness of your video marketing campaign. 

The Benefits of Video Marketing Over Paid Advertising

Paying for ads stands for instant results. You spend your dollar and receive a steady in-flow of clicks/leads/sales. Compared to that, investing in video production and distribution seems like a costly and labor-intensive undertaking. Yet, there are a few important points to remember here. 

While paid advertising brings instant leads, the problem is that up to 75% of them may not be ready to buy from you just yet. That’s exactly where video marketing can be used to nurture those leads and move them down the sales funnel. The draw here is that 71% of marketers report that video converts better than other types of content. Embedding videos in marketing emails can increase conversions by 200%-300% and adding one to a landing page can boost the opt-in rates by 80%. 

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Zappos was among the first e-tailers to feature educational product videos on their product pages. Those videos were estimated to have a 6% to 30%impact on direct sales. The particular appeal of video is that it can help you convert the hesitant browsers; drive new prospects to your website and organically spread your brand message across multiple channels. 

Paid advertising will only generate consistent results as long as you keep topping up your budgets. Video marketing as a subdivision of content marketing, on the other hand, delivers consistent compound results over time. Even if you choose to cut your spendings in half at some point, you will still enjoy a steady influx of new leads. In the long run content marketing pays off better. Compare the numbers from this case study

You can run a similar benchmark test and track how metrics such as visitors/clicks to product pages, raw and qualified leads will differ between a paid advertising and a video marketing campaigns.  

How To Measure The Effectiveness of Your Video Marketing Campaigns

To calculate the possible ROI of your campaign, it is important to set the right goals and adopt respective KPIs first. Google BrandLab developed this neat chart to help you do just that: 

Go on and pick your goal and establish the key metrics to track. There are a lot of platform-specific and external video analytics tools you can use for that. If you want to specifically measure how video marketing ROI compares with paid advertising ROI, you should track and analyze the following data gathered over a 3-6 month period:

Average Cost Per Click: Benchmark the average CPC of a paid ads campaign versus a video marketing campaign. To calculate video marketing CPC, you should first enable custom campaigns in Google Analytics to collect accurate data on referral traffic from published videos. Then divide your total video marketing budget by the number of all visitors acquired. For example, you have spent $20,000 on video marketing last year and received 30,000 clicks to your website. That means the average CPC is approximately $0.60 – not bad when compared to the average Google Adwords CPC.   

Average Click Through Rate: If you don’t have an analytics tool to estimate the average CTA for links placed in your videos/video descriptions, you can get a rough estimate by dividing the total number of video views by the number of referral visitors to your website generated by videos. 

Average Conversion Rate: It’s worth comparing the results based on different goals. For instance, a PPC campaign may be generating a higher number of calls/contact form inquiries, whereas YouTube videos tend to bring a steady inflow of new email subscribers. 

Your decision to invest in video marketing should be data driven. Launch a short “demo” campaign with a clear goal and KPIs in mind, measure the results and benchmark those against a paid advertising campaign of the same or shorter length. Don’t forget that unlike paid ads, video marketing casts a compound effect over time. The ROI will keep improving over time even if you chose to slow down the production and distribution of new videos. 


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