Calculating Your YouTube ROI

A professionally produced video can be expensive; however, when a video is well done it is  a great marketing tool. Video gives you a great method for communicating with your website visitors; because it is more than graphic or photo, it is a presentation in action.

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High quality video adds a whole new dimension to any type of website.

A well-produced video increases traffic and reduces bounce rates. Having your own YouTube channel archives all your videos so that people can watch them at any time. You can also program the videos for paid subscriptions through your website. In other words, if you want to house a video specific to a subscription you are offering, it can be housed on YouTube, but no one would be able to see it, unless they subscribed to your website’s offer. And, just last month, YouTube announced a paid subscription option directly through their video website.

Videos can pay off in the short term, like when you’re announcing a product launch, or producing a video blog. Videos also pay off in the long term, as people find them with search engines or while browsing YouTube. This improves your YouTube rankings. But videos have to earn their keep too, because they can be expensive to make. Here’s what you need to know to be able to calculate the return on investment (ROI) for your site’s videos.

Types of Video ROI

How you measure ROI depends on what you want a video to do for your site. Know the goal of a video before you make it. Some goals behind producing a video may be to:

  • Help audience development
  • Increase social sharing from your website
  • Increase revenue by prompting subscriptions, purchases, “freemium” site memberships, or some other revenue-producing action.

If you hire a video production company to do your video, you’ll need to consider that cost against what your video eventually produces for your business. If you do your video in-house, you’ll need to consider the time and the personnel resources that were invested to create the video, as well as the quality of the video outcome.

Important Video Metrics

For most organizations, the four most valuable metrics are views, time watched, channel subscriptions, and shares.

  • Views: Tells you how many times the video has been viewed. It also indicates how many of those were unique views. View sorting includes date range and geography.
  • Time Watched: Similar to the “time on page” metric for your site’s pages. This lets you know if people are engaged enough to finish watching the video or if they click away soon after it starts. This is an important indicator as how to set up the format or layout of your future videos. It will tell you what holds the attention of your audience and for how long.
  • Subscriptions: New subscriptions to your YouTube channel indicate that your video is of high enough quality and informational value that people want to see more and that they don’t want to miss new videos.
  • Shares: Just like every other social media outlet, when people share your videos frequently on Twitter, Facebook or another means, it’s their “seal of approval” that they find your content worthwhile. It extends your content’s reach.

Considerations When Determining Video ROI

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Make sure metrics used after adding video to your site give you an apples-to-apples comparison.

When determining ROI for a video, you want an apples-to-apples comparison. If adding video is part of a major site overhaul, you may not get a clear picture of how the video helped (or didn’t help) due to other changes made at the same time. It’s best if you introduce the video without other site changes so you can see the effect it had. Also, you’ll want to compare time periods, such as the same month, year over year. For example, if you generally have a lot of seasonal traffic around Christmas, and then introduce video content in January, you’ll want to compare video performance using the previous January’s metrics (or another similar month of the year) due to skewing effects of the extra Christmas traffic. The key is to make sure you recognize data over the same month year over year.

Using Metrics to Calculate ROI

The first step when calculating ROI is to define specifically what you want to measure. Do you want your video to increase site traffic? Do you want it to sell products? Is there some other site metric you want your video to improve (like social shares)? When you determine what you want to measure, gather relevant existing data for comparison.

Your YouTube, along with other site analytics, allow you to know if the video had an effect on the metric you wanted it to influence. Did conversions increase or decrease after the video was added? What percent did the video share impact traffic? How do numbers measure up in the 30 days after the video was introduced compared to a similar previous 30-day period? Did the video hold the viewers attention longer or shorter than the last video posted? Did my video appeal to a specific geographic location?

Another way some site owners calculate video ROI is by doing A/B split testing. This is where the site owner runs two home pages simultaneously and then use Google Analytics to determine which home page performs better after a set period of time has passed.

Video can be a terrific addition to your website even though videos take time and money to make. When you first start using videos, you’ll want to use your site and video metrics to determine if the time and money spent is worth the investment. Usually, high quality videos are a boon to traffic development, and they can be great for revenue development as well if they drive sales of products, subscriptions, or services.

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