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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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GUEST COMMENT Video ROI: How to measure what video adds to your bottom line

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by Dr Melody King

By now it’s old news that retailers are investing in product videos to drive more sales online. But as with many online marketing efforts, just how much of an impact those videos are having on the bottom line may be an unknown for many companies. In my many years of experience, lack of measurement usually stems from one or both of two things: limited time or uncertainty about how and what to measure.

Below are some guidelines retail marketers can follow to determine the ROI they’re getting from their online videos. And whilst the initial steps to perform the appropriate analytics might take some time (unless you’re able to get assistance from your video provider), once you’ve set it up it should be fairly easy and straightforward to continue the measurements over time.

Control Groups

The most effective way to measure the effect of videos is by comparing the behaviours of shoppers who see videos versus the behaviours of shoppers who do not see videos when visiting a particular product page. To do this, you need to set up a control group – a percentage of your visitors who are NOT shown videos when they click on product pages. That is, for the control group, the product page should remain as before, completely devoid of a video option (player or button), while the rest of the page visitors will have the video option activated.

How you determine the size of the control group is based on a couple of factors, like how much traffic your site gets and how quickly you want to see the results, although we do advise that the more time a test is run the more accurate the results will be.

By setting up the control group you gain a clear understanding of the isolated impact that video offers, when all other circumstances are the same and when they occur in the same timeframe. You can then examine the effect of video on conversion rates by comparing the conversion rate of the control group with the conversion rate of the video group.

To set up the control group test you need a measurement tool. Ideally, such a tool is included in your video platform for a comprehensive solution. With the control group you can also measure the effect of the presence of video, whether it’s watched or not, on conversion rates. You might be surprised to discover that the mere presence of video on a webpage increases conversion rates, even when it’s not clicked on. To measure this you need to look at the number of page views for products with videos compared to the overall number of video views, and then look at the number of page views for the control group.

Another metric to measure with the control group is time spent on site, including how many pages were viewed by each group as well as the amount of time spent on each of these pages. You’ll likely see that video keeps shoppers onsite longer, that they’ll visit more pages and generally stay more engaged. Higher engagement translates to a better site experience and ultimately, more sales. While there’s no harm in continuing to run a small control group at all times as a measurement tool, you may want to move past this method and strictly perform A/B testing after the effectiveness of video has been sufficiently proven.

A/B Testing

While setting up a control group will show you the benefit of having video on your site, it cannot show you the impact of different variables within a video. Once you’ve determined whether video is having a positive impact, continual A/B testing can help you maximise the increase.

There are many isolated elements for which you can conduct A/B tests. To get started I suggest some basics like background music (which style works best?), voice-over (should you have it or not?, should it be male or female?), and different calls to action. Ideally your video platform will include an option for proper A/B testing.

In order to effectively A/B test, you will need to have more than one video version per product (you can’t accurately A/B test anything between different products). An automated video solution is the best and easiest way to create multiple, similar versions of video for the same product, isolating individual elements, one at a time.

Once you have the different video versions created, you should set up your site so that each version is shown to a percentage of your visitors, and then you can determine which variables have the biggest impact. To get a precise understanding it’s best to just test one variable at a time.

Sometimes the smallest changes can make a huge difference for online stores. One of our retail clients, for example, tried adding a ‘play’ icon to the first frame of every video thumbnail. After A/B testing thousands of page views, it was found that the addition of the ‘play’ prompt greatly increased video views. In fact the ratio of video views per page doubled, going from 2.7% to 5.4%. As viewing videos has proven to increase conversion rates, this seemingly inconsequential adjustment to the video player has had a significant impact on the retailer’s bottom-line sales.

Measuring the indirect benefits of video

While the overall impact of video on your bottom line can be measured and you can easily ascertain your ROI based on conversion rates, there are also a number of 'immeasurable' factors.

For example, videos are known to be a great way to strengthen a brand’s reputation. Having videos on your site makes your online storefront look more professional and trustworthy, which gives shoppers more confidence to buy. It also helps make your site more memorable, due to the inherent interactivity in video viewing.

There is also a social marketing benefit as video is often shared and ‘liked’ on sites like Facebook and YouTube. Through sharing on these sites you also increase brand recognition and expand your impact beyond your own proprietary website.

When you’ve gone to the trouble to add anything to your site, particularly video, it’s important to see how it’s working. By properly A/B testing you can easily implement small tweaks to maximise performance. It’s an ongoing effort, but the pay-off is a better online experience for your customers, a stronger reputation for your brand, and ultimately a nice boost to your bottom line.

Dr Melody King is VP of marketing, Treepodia

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