How To Identify The Right KPIs And Measure ROI Of Video Marketing11 min read
When it comes to measuring a video ad’s success, views aren’t everything. This article is the first in a series to support marketers that want to learn how to measure video marketing ROI. Our mission is to help you identify the right Key Performance Indicators (KPIs) of video marketing campaigns and ultimately achieve clarity around measuring video ROI.
ROI: The New Standard For Marketers
The marketing world is in the midst of the buyer-first revolution. Today’s customers use the internet to research purchase decisions. More and more they rely on reading and watching high-quality content to find the perfect solution or service for their needs. Every second, there are more views on YouTube than searches on Google. To succeed in this environment, marketers must target, engage, and convert customers using video content.
As buyer preference continues trending toward video, the need for marketers to measure video marketing ROI is critical. Marketing department budgets are bigger, and that means more scrutiny on results. Furthermore, the stakes are higher because buyers are making decisions based on content. According to HubSpot’s State of Video Marketing 2018 stats, 69% of people have been convinced to buy a piece of software or application by watching a video. This means the price of failure is steep – there is a greater risk of losing sales and customers. With this change comes additional responsibility. Marketing departments are increasingly responsible for revenue-making accountability and measuring results. Data-driven marketers need hard numbers to justify their investments and prove performance.
Modern data-driven marketing, however, isn’t easy. Data is fragmented across multiple silos. Changes are constant and quick. Often, finance departments view marketing expenses as extra because marketers lack the tools to measure their bottom line impact. Also, marketers lack a metric model to map the complexity of different funnel stages.
Brite developed a measurement framework to make video marketing accountable and measurable. To begin building this model, we researched and talked to dozens of customers, partners, and experts to define the value of a view. Because of the infancy of the video marketing space, we didn’t find anything definitive. Moreover, we collected dozens of different definitions of value, ROI, and performance.
This is an important issue so we set out to build a rock-solid framework for measurable video marketing. We turned to the finance sector to develop a model that works for measuring the value and performance of video. So how do you measure the Value of a View?
“The value of a view is the sum of the price you pay plus down-funnel value elements”
First, think of a stock that pays dividends, like GE. To value GE’s stock you add the price you pay for the stock itself at the market price (GE $29.55) plus the future dividends that you receive as an owner of the stock. It’s an investment that keeps on giving. Views on TrueView, YouTube’s video ad format that allows viewers to skip the advertisement after five seconds, work the same way. You pay for the view through a bidding process (just like AdWords for PPC). This bidding approach sets the market price, allowing you to bid the amount you believe the view is worth (compared to competitive bidders).
As a result, the Cost Per View (CPV) is the metric that matters most because it’s the proxy to all the down funnel events. Once a viewer watches your ad, a series of down-funnel events occur (i.e. the dividends). Some viewers will click on your ad. These clicks lead to some users becoming valuable leads and some users taking further action to make purchases and become customers. This is a classic progressive marketing funnel. The sum-total of down-funnel activities adds to the value of your purchase. Brite’s Full Funnel model measures each stage to show measurable events (impressions, views, clicks, conversions and more).
How To Measure ROI Of Video Marketing
We are in the midst of a radical change in the way businesses interact with customers. Customers today do their own product discovery and research; consuming content as they move through their own unique journey. In today’s market, customers are in charge, and they make decisions based on what they want and need.
As such, online video is dominating the marketing landscape. Millions of people watch billions of videos – every day. 64% of customers report watching a YouTube video before purchasing something. A reported 70% of millennials believe that they can learn anything on YouTube. In the twenty-first century, the world is now video-first.
As a result, smart marketers are looking for ways to take advantage of these trends. Seeking opportunity, these marketers invest in media and software. In Brite’s 2017 State of Video Marketing Survey, 59% of marketers had plans to increase investment in video marketing by 10% or more.
Early tests and pilots have been successful, and as a result, investments in video marketing now consume sizable percentages of marketing budgets. However, Business performance and ROI are now under greater scrutiny.
This video marketing ROI series provides a framework to understand the upside outcomes and cost factors in video marketing. It also provides a way to measure performance and calculate ROI from your video marketing.
Start With Your Business Goals
The first step in measuring the value of video marketing is mapping out your business objectives and assigning a value to each goal. Two questions to ask are: what do you want to do? And, how will you measure it, if it’s successful? Some of the most common business goals for video marketing are:
- Increase revenue
- Drive lead generation
- Increase awareness
- Grow margins
- Increase customer retention and reduce churn
- Grow web traffic
- Generate brand lift
To measure the total value of a video marketing strategy, marketers need to look at the entire strategy, across the tried-and-true marketing funnel. Using the funnel allows you to quantify the entirety of a marketing effort – including awareness, engagement, conversion, and expansion.
Buyer’s today have an organic and unique journey to their purchase, yet measuring this process using familiar funnel stages remains an effective model.
Measuring awareness involves measuring impressions, views, skippable views, efficiency rates, brand lift and share of voice.
Measuring engagement means looking at clicks, interactions, deep content downloads, earned views, personalized offers, and pixeled users.
Measuring conversion involves looking at revenues, MQLs, expansion and up-sells, retargeted conversion and multi-channel attribution.
Ready To Go Deeper?
In the blogs ahead, we’ll look at an issue most marketers need to get ahead of – aligning your marketing funnel with video marketing KPIs.
So many smart marketers approach video campaigns with awareness goals and measure the success of their campaigns with conversion metrics. It’s likely this mismatch is happening within your organization as well. That’s why in the coming posts, we’ll dig deep into each funnel stage, which goals are appropriate for that stage, how to measure success, and why it’s important.
All the things you need to know about generating revenue with video marketing In 2018.
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