How to Prove ROI for Video Production
Video marketing is one of the most effective ways to connect with your audience, but demonstrating its return on investment (ROI) is often a challenge for marketers. Stakeholders want to see clear evidence that their investment is delivering results. The good news? Proving ROI isn’t just possible—it’s essential to justify your efforts and refine your strategy. In this blog, we’ll explore actionable steps to prove ROI from video marketing projects, with a focus on animated explainer videos.
1. Start with Clear Goals and KPIs
The foundation of proving ROI is knowing what you’re measuring. Define clear goals for your video marketing projects. Common objectives include:
- Brand Awareness: Increased reach and visibility
- Engagement: Boosting likes, shares, comments, or time spent viewing
- Lead Generation: Capturing email addresses or inquiries
- Sales: Direct purchases or conversions
Once your goals are set, identify key performance indicators (KPIs) to track. For example, if your goal is lead generation, track form submissions or downloads linked to your video.
2. Calculate the Total Cost of Your Video Projects
Understanding the total investment is critical for calculating ROI. Include all costs associated with producing and distributing your video, such as:
- Pre-production planning and scripting
- Animation and editing
- Voiceover talent or music licensing
- Paid ad placements or platform boosts
Having an accurate cost baseline ensures your ROI calculations are grounded in reality.
3. Measure Revenue Generated
Determine the revenue your video has directly or indirectly generated. This might include:
- Direct Sales: Track purchases made after viewers click on a video’s call-to-action (CTA)
- Attribution Modeling: Use tools like Google Analytics to attribute website traffic and conversions to your video
- Lead Value: If your video generates leads, assign an average revenue value to each lead to estimate revenue impact
4. Leverage Tracking Tools
Use data analytics tools to connect the dots between your videos and business outcomes. Examples include:
- Google Analytics: Monitor video traffic sources, on-site behavior, and conversions
- Video Hosting Platforms: Tools like Wistia, Vimeo, and YouTube provide insights into views, watch time, and engagement
- CRM Systems: Connect your videos to customer relationship management software to track lead and sales generation
5. Incorporate UTM Parameters
UTM parameters are tags added to your video’s URL that help track the performance of your campaigns. Use them to see how specific videos drive traffic, leads, and sales. For example:
`www.yourwebsite.com?tm_source=video&utm_medium=social&utm_campaign=explainer`
By analyzing UTM-tagged links, you can pinpoint which videos are driving the most value.
6. Compare Against Benchmarks
Understanding ROI requires context. Compare your video performance against industry benchmarks or past campaigns. For example, if your explainer video has a 15% conversion rate and your previous videos averaged 8%, you’re clearly improving.
7. Present Both Quantitative and Qualitative Results
While hard numbers matter, qualitative results also play a key role in proving ROI. Highlight benefits like:
- Increased brand awareness or credibility
- Improved customer understanding of your product or service
- Positive feedback or testimonials from viewers
8. Conduct A/B Testing
A/B testing allows you to refine your approach by testing different video elements. Try varying the script, visuals, or CTAs to see which version generates better results. Testing ensures you’re constantly optimizing for the highest ROI.
9. Use ROI Calculations
Once you have your cost and revenue data, use the formula:
(Revenue Generated - Total Costs) / Total Costs = ROI
For example, if an animated explainer video generated $15,000 in sales and cost $3,000 to produce and distribute, the ROI would be 400%.
10. Showcase Long-Term Value
ROI isn’t always immediate. Some videos continue driving traffic, leads, and sales for months or years. Highlight long-term benefits to stakeholders, emphasizing the enduring value of your investment.
In Conclusion
Proving ROI from video marketing projects doesn’t have to be complicated. By setting clear goals, tracking performance, and tying your efforts to measurable outcomes, you can demonstrate the undeniable value of animated explainer videos. Whether it’s increased sales, greater engagement, or stronger brand loyalty, the impact is real and quantifiable.
Ready to create a video that delivers measurable results?