THE ROI OF VIDEO IN MARKETING

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1 THE ROI OF VIDEO IN MARKETING Written by David Daniels, The Relevancy Group, LLC Tactics to Increase Marketing Revenue by Forty Percent May, 2013

2 The ROI of Video in Marketing Tactics to Increase Marketing Revenue by Forty Percent Written by David Daniels, The Relevancy Group, LLC StreamSend Executive Summary Consumers are flocking to online video, watching more than four billion videos on YouTube each day. Among 18- to 34-year-olds, smartphones now match desktops and laptops as a video delivery device, facilitating the ability to stream video in and other message formats. In a survey of 266 marketing executives, The Relevancy Group found that twenty-five percent of marketers are currently utilizing video in . Our survey found that marketers that utilize video in have increased their click-through and conversion rates, and are generating forty percent higher monthly revenue than those that do not use video. To execute video in effectively, ensure that videos have the ability to be configured with call-to-action links, sharing mechanisms and auto-responders. List of Report Figures Figure 1 Marketers Use of Video in Marketing Figure 2 Inhibitors to Using Video in Marketing Figure 3 Plans to Use Video in Marketing Figure 4 Benefits of Using Video in Marketing Figure 5 Average Monthly Revenue and Deliverability No Video Versus Using Video In Marketing For more information on The Relevancy Group s services, visit call (877) , or on Reproduction by any method or unauthorized circulation is strictly prohibited. The Relevancy Group s reports are intended for the sole use of clients. For press citations, please adhere to The Relevancy Group citation policy at All opinions and projects are based on The Relevancy Group s judgment at the time of the publication and are subject to change. Page 1

3 Introduction: As Internet and mobile infrastructure matures, consumer video usage is on the rise. Consumers love video. YouTube logs more than a billion unique visitors around the globe every month. If YouTube was a country, it would be the world s third-largest. YouTube is also the second-largest social network, and spurs active collaboration among online viewers. Eighteen-to-thirty-four year-olds are spending seventyfour percent more time watching YouTube on their smartphones than they did last year. For the first time, this number is equal to the number of people from this demographic that check out the video platform on desktop or laptop computers. i Consider these YouTube statistics: 60 hours of video are uploaded to YouTube every minute, or one hour of video every second More than four billion videos are viewed each day One billion unique users visit YouTube each month Users watch more than three billion hours of video each month on YouTube In 2011, YouTube had in excess of a trillion views; more than 140 views for each person on Earth More video is uploaded to YouTube in one month than the three major U.S. networks created in 60 years YouTube is localized in 39 countries, for 54 languages Seventy percent of YouTube traffic comes from outside of the U.S. The rising popularity of Facebook, Twitter, and other social networks has accelerated the growth of online video and put YouTube at the core of social collaboration: 500 years of YouTube videos are watched on Facebook every day 700 YouTube video links are shared on Twitter every minute Millions of people subscribe to YouTube every day 100 million people take a social action (likes, shares, comments, etc.) on YouTube every week More than half of YouTube videos have been rated or commented on Millions of videos are favorited every day ii An auto-shared tweet results in an average of six new YouTube.com sessions Video in Marketing Is Still Nascent With consumer adoption of video so high, more marketers are beginning to distribute videos through , still the most popular communication channel. To date, there have been few solutions available for embedding video in marketing messages. However, recent changes in many webmail and software clients now make it possible to play videos directly within an . The Relevancy Group surveyed 266 marketing executives in February 2013 and found that twenty-five percent of marketers are currently using video in their marketing messages (Figure 1). This rise in the adoption of video by marketers highlights the increased number of Marketing Service Providers offering video solutions. Page 2

4 Figure 1 Marketers Use of Video in Marketing Question: Do you currently utilize video in your marketing messages? (Select one) Source: The Relevancy Group, LLC Executive Survey, n=266 2/13, United States Only Lack of Content and Perceived Costs Inhibit the Widespread Use of Video in Marketing The primary reason that marketers report not using video in marketing messages is a lack of content. Forty-three percent of marketers report that they don t have any video content (Figure 2). Video content is worth creating. Video is particularly useful for complex products that need more extensive explanation. Video can also be used for customer testimonials, as well as general branding. Most marketers that use video are leveraging the content from existing sources, though there are many inexpensive options for producing video today. The perception that video is difficult to play in clients will soon be a distant memory. Widespread use of HTML5 is making video streaming ubiquitous, and minimizing video impact on delivery. Most reader software and mobile browsers now support video. For those instances when the video is incapable of playing in the software, marketers should always add a link to view the video on a website. This call-to-action drives engagement. Page 3

5 Figure 2 Inhibitors to Using Video in Marketing Question: Why don t you utilize video in your marketing messages? (Select all that apply) [Selected: Marketers that do not use video in marketing] Source: The Relevancy Group, LLC Executive Survey, n=200 2/13, United States Only Marketers Are Optimistic About the Use of Video in Marketing With increasing numbers of marketers adding video to marketing to engage consumers, inboxes everywhere will soon become more crowded. Eighty-one percent of marketers surveyed said that they are very likely or somewhat likely to utilize video in future marketing efforts (Figure 3). Marketers are particularly optimistic regarding video because it has proven to capture the subscriber s attention, drive engagement, and bring a return on investment. Nothing connects people to a message as quickly as video. Video is easy to understand and has a more instant emotional impact than text or static images. But in order to grab a user s attention and convince them to take action, the video must captivate and activate during the first five seconds. Page 4

6 Figure 3 Plans to Use Video in Marketing Question: How likely would you be able to utilize video in your marketing messages? (Select one) Source: The Relevancy Group, LLC Executive Survey, n=266 2/13, United States Only Video in Increases Engagement, Social Sharing, and Conversion Adding moving images to marketing makes those messages more engaging. Marketers that use video in report increases in every important key performance indicator: Increased click-through rates: Fifty-five percent of marketers report increased click-through rates in s sent with video as compared to s without video Increased engagement: Forty-four of marketers report that consumers spend more time viewing s that contain video versus s without video Increased advocacy and sharing: Forty-one percent state that their s with video were shared and forwarded more than those s without video Increased conversion and dollars: Up to twenty-five percent of marketers report increases in conversion, dollars generated, average order value, and ad sales for marketing messages with videos (Figure 4). With these figures in mind, s with video show a tremendous return on investment. Page 5

7 Figure 4 Benefits of Using Video in Marketing Question: What have been the benefits of using video in your marketing messages? (Select all that apply) [Selected: Marketers that use video in marketing] Source: The Relevancy Group, LLC Executive Survey, n=66 2/13, United States Only Video in Boosts Monthly Revenue by Forty Percent Increasing ROI When comparing the performance metrics of marketers utilizing video in marketing to those that do not, The Relevancy Group found that those adding videos to had a much higher return on investment. These marketers employing video reported higher delivery rates, open rates, click-through rates, and conversion rates. In addition, marketers using video in have a ten percent higher average order value than marketers not taking advantage of video. When we applied these metrics to those marketers sending one million messages a month, we found that marketers adding video had monthly revenues that were forty percent higher than those that were not using video in their marketing (Figure 5). Utilizing video in drives engagement, conversion, and revenue. Page 6

8 Figure 5 Average Monthly Revenue and Deliverability No Video Versus Using Video In Marketing Question: For each of the following metrics, please select what your average metric is for these performance measures (Delivery, Open, Click, Conversion, Average Order Value - select one for each). Monthly send=1mm/mo. Source: The Relevancy Group, LLC Executive Survey, n=266 2/13, United States Only Select An Marketing Video Solution That Includes Advocacy and Engagement Features While solutions for marketers abound, a successful video software must provide these features: Supports HTML5. Vendors should utilize HTML5 in their deployment of video messages. This is important to ensure that the video plays within the client. This improves the compatibility of the video in the , and enables playback across a wide variety of client software. Click-to-configure. This critical feature allows marketers to add phrases, marketing messages, and clickable call-to-actions over video. Click-to-configure increases the likelihood of engagement and customer action by inserting compelling language on forms and other links. The marketer can also change the call-to-action, or send the consumer on an alternate message path with different tailored triggered messages. Working with vendors that offer click-toconfigure tools helps marketers potentially source popular viral videos and embed their own calls-to-action within those existing videos. Sharing. This is an important feature, as consumers not only love video, but they love to share video on their social networks. Furthermore, the ability to identify these consumers as advocates and treat them differently in the segmentation plan allows marketers to alter messaging and spur sharing among advocates and non-advocates alike. Auto-responders. These ensure that the vendor can trigger messages and implement a cascade of messages based on the engagement behavior of the consumer interacting with the video. This experience can be further aided by consumers that share the video in social networks, thus triggering a specific auto-responder and deepening customer engagement. Page 7

9 End Notes i YouTube corporate statistics provided on 3/20/13 ii YouTube statistics provided by Techwelkin About StreamSend , ext. StreamSend offers an easy-to-use, affordable and dependable marketing software solution designed to help businesses make the most of their time and money. We are focused on developing and delivering elegant technological solutions to meet the communications needs of our customers. We believe in the value and freedom that comes with marketing, and stand behind several core principles of marketing for our company, product and service. And we also believe in having a little fun. Learn more at on or on Facbeook at https://www.facebook.com/streamsend About The Relevancy Group, LLC (877) Founded in 2010 by former Jupiter Research and Forrester executives and led by tenured industry analyst and marketer David Daniels, The Relevancy Group provides market research, survey design and consulting. The Relevancy Group s educational and advisory resources are designed to advance our clients and the markets understanding of relevance in order to deepen their customer relationships. In addition to consulting to some of the top brands and vendors in the digital marketing economy, The Relevancy Group (TRG) produces dozens of surveys, research reports and webinars each year. CEO and Co-Founder David Daniels and VP of Services Chris Marriott are highly sought after public speakers and they continue to entertain and enlighten audiences at conferences around the world. About The Author David Daniels on For 25 years, David has been an industry proponent. Currently as CEO of The Relevancy Group, David directs market research and consulting essential to digital marketing. Direct Magazine said David is one of the most influential experts in marketing, if not the most influential. Co-author of Marketing An Hour A Day, David has held senior level positions at Forrester and JupiterResearch, Apple, Anthropologie, MacWarehouse, Proteam and the earliest online retailers on CompuServe. David advises many industry associations including the Online Trust Alliance and The Direct Marketing Association. David writes a syndicated column for ClickZ and has been a contributor to the Weekend Today Show on NBC. David is also a contributing analyst to GigaOM Pro. A father, musician and NFL New York Football Giants fan, David lives on the beautiful New Jersey shore in Spring Lake, NJ. Page 8

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