Are your videos making you money? If you’re like many marketers or business-owners out there, you might not have a clear answer to that question.
In the rush to create content and keep up with consumer expectations, it’s important to press pause and check that what you’re doing is actually working. In this post, we’ll show you different ways to tie revenue back to a specific video.
Why Track Revenue Per Video?
When it comes to the bottom line, revenue is the metric that counts. It allows you to clearly demonstrate the value your videos are providing to your business and marketing efforts.
This data can be used in numerous ways. For instance, you can evaluate video ROI, and set benchmarks for comparison, either to other videos or to other types of marketing collateral.
How to Analyze Revenue Per Video
There are several different approaches to calculating the financial impact of a specific video. The right method for your business depends primarily on how you’re sharing your videos.
Below, we’ve broken out the most common ways businesses leverage video as a revenue driver, with clear instructions for each.
Video On Marketing Website
Most websites have at least one video these days, but far fewer attempt to tie their video directly to revenue. Think explainer videos, testimonials, product features, and similar marketing videos. The accepted wisdom is that these types of videos help boost conversion rates, but it’s important to try to quantify their impact to ensure your content is actually effective.
The best approach for this type of video focuses on conversion rates. Ideally, you want to compare your website conversion rate with video to its performance without video, or with a different video.
Known as a/b testing, this type of comparison is designed to isolate variables and demonstrate the impact of a particular piece of content. You can devise this type of test in a few different ways.
While not the most accurate format for a test of this nature, looking at historical data can give you a sense of whether changes you made to your video are moving in the right direction. You’ll need a website analytics platform, like Google Analytics or similar, to conduct this analysis.
- Navigate to a report that shows conversion rate data for your website. In Google Analytics, a good choice is the Channels report under All Traffic in the Acquisition section.
- Select a time frame that includes your video on your website in its current format. Aim to include at least one month of data.
- Select a traffic segment to focus on if you want to exclude certain segments from this analysis.
- Use the variable drop down menu to select a Goal Conversion Rate. This is usually a custom goal that you’ve set up with your analytics platform. For example, it could be free trial signups, purchases, or form completions, etc.
- Compare this time period to a previous period without video, or with a different video. You’re looking for an improvement in your conversion rate following the addition of your current video.
True A/B Test
If you have a website testing platform available, you can run an a/b test of the traffic on your site to directly compare a specific video against an alternative, or no video at all. Most platforms allow you to pick conversion rates as the metric to use to evaluate your test, and automatically calculate the significance of the result.
The general idea is the same no matter which platform you use for your a/b test. One variant in your test is your website or landing page with your current video. The other variant(s) would be the same exact page, but with a different video or no video at all (consider using an image instead).
Once you have your a/b test setup with the platform of your choice, you’ll have to wait for the data to roll in. You’re looking to see which performs best based on the conversion rate.
Tying Back to Revenue
A higher conversion rate means a higher percentage of your traffic is making a purchase, completing a form, or scheduling a call. If your goal metric is a purchase, the tie-in to revenue is straightforward.
For example, if the video resulted in a 10% conversion rate compared to a 5% conversion rate for the segment without video, all you need is the total traffic per segment, and your average order value to estimate the revenue boost from the addition of your video.
To illustrate, say you had 1,000 website visitors in each segment. The segment with the video converted at 10% whereas the segment with just an image converted at 5%. If your average order value is $50, the video segment will generate $5,000, while the non-video segment will generate only $2,500. Summing it up, the increase in revenue attributable to the video would be a total of $2,500 over the control group.
|Ave. Order Value
Video As A Product
If you’re selling video as your product, analyzing revenue generated by a particular video is usually fairly simple. Most e-commerce platforms report units sold per SKU, or similar data that make it clear how much of each product you sold.
If you’re selling subscriptions, you can simply tally up the total revenue generated by your subscribers in a given month, and divide by the total videos included in their subscriptions. For example, if your monthly subscriptions total $1,000 and you have 10 videos in your subscription plan, each video is generating $100 in revenue.
Alternatively, you could adjust this calculation according to the popularity of each video. This could be useful to evaluate which videos are keeping your subscribers engaged and more likely to renew. It can also help inform decisions about what types of videos to create for the future.
First, get the total number of plays for all videos in a month. Then, calculate the percentage of plays each video is responsible for. Finally, use the percentage of plays to calculate the share of revenue each video represents.
For example, say you have three videos and earned $1,000 in a month. One video is much more popular than the other two. Here’s what that might look like:
Video For Lead Generation
The right approach here depends on your business. There are two main ideas. You can calculate the value of each lead generated by each video, or you can track the full conversion pathway from lead to paying customer. The former is useful for forecasting, while the latter is more accurate.
Video can be used to capture leads in multiple ways. For starters, you can enable lead capture on a video, and send contact information straight to the marketing platform of your choice. Or, you can use a post-play screen to display a call-to-action, signup form, or link to a lead capture landing page.
Calculating Lead Value
One approach is to work backwards from your customer lifetime value. Simply multiple your customer lifetime value by your lead conversion rate.
For example, if you know your customer lifetime value is $500, and you convert leads to customers at a rate of 20%, the value of each lead would be $500 x 0.2 = $100 based on their likelihood to convert.
Another option is to calculate the value of a lead based on the revenue generated by closed leads. You can look at this data for a given period of time or from a particular source of leads.
For instance, if you converted 100 leads in a month and earned $10,000, each converted lead is worth $10,000 / 100 = $100. Then, to get the value of each lead (including those that didn’t convert), multiply your converted lead value by your lead conversion rate. Say those 100 closed leads represent 20% of your total number of leads (500) in a month. Each lead is therefore worth $100 x 0.2 = $20.
Tracking Full Conversion Pathway
In order to do this, you need to be able to identify the cohort of leads who signed up after watching a specific video. There are different ways to track leads in this manner, from using dedicated lead capture pages for each video, to flagging their contact record with viewing activity by using a marketing integration. The right method will depend on how you are generating leads.
No matter how you identify your cohort, the important takeaway here is to set it up from the get-go. It’s much easier to analyze your leads if you tracked them properly in the first place.
Tying Back To Revenue
If you’re basing your estimates on lead value, once you know the value of a lead, you can calculate total estimated revenue from your video. Simply multiply the number of leads generated by the value per lead. If you acquired 500 leads with your video as in our example above, and they’re each worth $20, you can estimate that video will generate 500 x $20 = $10,000.
If you’re tracking the full conversion pathway, you will have to wait for the actual data to roll in. Track each lead by source, and see if they convert to a customer. Then, tally up the total revenue generated by each video. If one video generated ten leads, and two eventually converted, simply add up the revenue for the two converted leads.
Underpinning all of these calculations is reliable data. SproutVideo provides powerful marketing integrations on all subscription plans which are essential for lead capture and tracking. On top of that, our exportable reports, detailed analytics, and viewer engagement metrics can help you understand the value of video to your business.
Questions about leveraging your video data? Curious to see what video can do for your business? You can test out the tools we have to offer while on a 30 day free trial of our platform.