Video ROI Ultimate Guide: What Is It & How To Improve It?

Creating videos is only half the battle. Getting a fantastic return on your investment is the real challenge.

You suspect your videos could deliver you better results, but you’re unsure on how to pinpoint the areas needing improvement. And without clearly understanding how your videos turn into sales and profits, it's hard to justify the time and money you put in.

That’s why it’s good to learn about video ROI. With it you can stop guessing games and make data-driven decisions that boost your profits. And that’s what this article is about.

We’ll discuss why tracking video ROI is important, the main metrics to watch out for, how to create a video ROI strategy, and how to increase your ROI. Let’s get into it!

What is video ROI?

Video ROI measures the profitability and effectiveness of a video marketing campaign. Think of it as your video campaign’s report card.

It compares the gains or benefits of a video campaign to the costs of producing and distributing video content.

Calculating ROI means tracking the numbers that tell you if your video is working. This might include views, leads generated, sales, etc.

Why should you use video for a high ROI?

The data is clear: 90% of marketers in 2024 said that video makes them good ROI. This figure has been nearly consistent throughout the years, hovering anywhere between 76%-92%.

Let’s look at more reasons why you should consider using video for a better ROI

4 Benefits of video for effective marketing

Video boosts conversions and sales

Plenty of stats prove that video boosts conversions and sales. Businesses that use video marketing experience 34% higher conversion rates than those that don’t. And A/B tests prove that using a video on a landing page increased conversions by 69%.

So in general, marketers (a whopping 88%) and businesses (91%) consider video as an important part of their marketing strategy.

In the same study, here are other wild conversion stats from the marketer's point of view:

• 87% said video marketing has increased sales
• 90% say it’s helped them generate leads
• 91% say it’s helped them increase traffic
• 95% say it’s helped them increase brand awareness
• 96% say it’s helped users understand their product or service

Audiences trust videos

Here, too the stats overwhelmingly favor video. 89% of people say watching a video has convinced them to buy a product or service.

It isn’t hard to imagine why this may be the case. A video of a product directly showcases the product (it’s hard to get a feel for a product through text). In a video testimonial, you get to see the authentic faces and expressions of the people praising the product.

In general, videos stir emotions and connect with viewers through storytelling, music, visuals, and shared human experiences.

Google loves videos

Articles with video content get 80% more traffic than articles without. And articles containing 3 or more videos get more backlinks than articles with no video content.

Video drives stronger engagement

66% of consumers reported that short-form video content helped them pay the most attention. It was also found that video generates 1200% more shares than text and image content combined.

Clearly video is the king in holding attention and keeping people engaged.

How to create your own video ROI strategy: 7 Steps

Here’s how to create a video ROI strategy:

Step 1: Define your goals

What do you want to do? Increase brand awareness? Generate leads? Drive sales?

Setting goals is tricky. But here's the key: make them realistic. Don’t be compelled to base them on industry standards; build on your previous successes. Don't worry about what others are doing.  Instead, focus on beating your own best.

For example, if you boosted video traffic by 5% last month, shoot for 7% this month – a challenging but achievable step up.

Step 2: Identify your target audience

Conduct market research to understand your target audience. Find out:

• Demographics: Age, gender, location, income, etc.
• Interests: Hobbies, passions, preferred content types.
• Pain Points: Challenges they face, problems your videos can solve.
• Online Behavior: What platforms do they use most? How do they consume videos? (Is this in short bursts or in-depth viewing)?

Step 3: Choose the right video depending on your audience’s buyer’s journey

You'll need to choose an appropriate video for the campaign based on where people are in their journey through the sales funnel.

Let’s understand this through an example. Say your target audience is office workers who experience back pain and discomfort.

At the awareness stage, the video could be an animated explainer video that explains how bad chairs can exacerbate back pain.

At the consideration stage, it could be an educational video comparing different ergonomic features.

And at the decision stage, you could use a product demonstration video of a chair from your brand that can solve your customer's back issues.

Here are some different types of videos you can use in your marketing campaign in general:

• Live videos: Connect with your audience in real-time.
• Customer testimonials: Build trust with authentic stories.
• Webinars: In-depth educational sessions for interested leads.
• Tutorial or explainer videos: Simplify complex topics in an engaging way.
• Commercials or promotional ads: Classic advertising with a creative twist.
• Product demonstrations: Show your product in action, highlighting its value.
• Social media videos or shorts: Short, attention-grabbing clips for platforms like Instagram or TikTok.

Step 4: Choose the right platform

Sleuth out where your audience hangs out. YouTube, Instagram, Facebook, or LinkedIn?

Once you find this, distribute your videos on platforms most frequented by them.

Step 5: Develop your video production plan

If you have the resources, you can develop your video in-house otherwise you will have to rely on outsourcing. In any case, you’ll need equipment and personnel (scriptwriter, videographer, editor).

You’ll also want to think about video creation software. For example, if you’re new to video production or you have a smaller team, you’ll want software that’s easy to use and helps you streamline your workflow. Riverside is a great tool, if this is you!

With Riverside’s 4K video recording, separate tracks, and an AI-powered editor, video creation is seamless. You can record with up to 10 remote participants which is great for interview-type videos, but you can also use our Editor to add text overlays, captions and automatically enhance your audio.

We have a text-based editor, so trimming your video is as easy as deleting text. And, if you want to repurpose your recordings, try our Magic Clips tools to turn your videos’ key moments into shareable short content.

Whether you want to go live and interact with a massive audience (up to 1000 members) or create polished explainers and product demos, Riverside has you covered. Learn more, or sign up to create professional videos with less than half the effort.

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Step 6: Optimize your videos for engagement and conversions

Once you’ve finished producing the video, craft compelling video titles, descriptions, and thumbnails to grab attention and encourage clicks. (Our AI summary generator can help you do this at the tap of a button.)

We suggest you

Add interactive elements and lead capture forms to boost engagement and generate leads.

Insert clear calls-to-action in your videos to drive actions: convince people to visit your website, subscribe to your channel, or make a purchase.

Step 7: Establish key success metrics and track them

How will you measure success? There are multiple metrics (which we’ll cover later in more depth):

• Views
• Engagement (likes, shares, comments)
• Click-through rates (CTR)
• Website traffic
• Lead generation
• Sales conversion

Step 8: Measure, analyze, and optimize your results

Metrics are your best friend. Carefully track those we covered above – they’re the key to seeing what’s working and what isn’t.

No campaign is perfect right out of the gate. If something isn't hitting the mark, don't be afraid to tweak. Maybe adjust the targeting, try a different call to action, or experiment with a new video format.

Remember, video marketing is an ongoing process. Use the insights you gather to keep improving and getting stronger results over time.

How to measure your video ROI: 7 Metrics to analyze

Here are the top metrics you need to analyze to best measure video ROI

View Count

View count is the total number of times people have watched your video. Think of it as your video's popularity score. It’s a basic indicator of reach and potential impact.

Where to find:

• Native platform analytics of platforms like YouTube, Vimeo, Facebook, etc.
• Website analytics if your video is embedded on your site.

Engagement Rate

This metric suggests how much your video resonates with viewers and compels them to interact. Audience engagement is calculated by combining likes, shares, and comments, divided by the total number of views, and multiplied by 100.

Where to find:

• Native platform analytics
• Social media monitoring tools

Average view duration

This is an indication of how interesting or informative your content is to hold attention. It’s calculated by how much time people watch your video on average.

Where to find:

• Native platform analytics

Click-through rate

This is the percentage of viewers who clicked on your video’s call-to-action (CTA). A strong CTR means your video is entertaining, informative, and persuasive enough to make people take the next step.  

Where to find:

• Marketing automation tools
• Website analytics

Leads generated

This is the number of new potential customers acquired directly from the video. If attaining leads is your main goal (which it is for most companies), then this will obviously be a very important metric to follow.

Where to find:

• CRM/Marketing automation tools

Subscriber growth

This tracks the growth of your social media followers. It can indicate the popularity of your brand and at what scale your business is well-known.

Where to find:

• Native platform analytics

Revenue generated

This refers to the income generated either directly or indirectly through video marketing efforts. It can come through direct sales, where a customer makes a purchase. Or through lead generation, where a video generates leads that your sales team nurtures into customers. Or through brand awareness, where memorable videos influence customer choices down the line.

Where to find:

• Analytic platforms and marketing automation tools
• Promo codes that link the video to the purchase
• UTM parameters, which are short text codes you can add to video URLs to track performance

How to improve your video ROI: 6 Tips

Let’s look at 6 tips to improve the ROI of your video content

• Write compelling titles. These should grab attention and accurately describe the video.
• A strong thumbnail is crucial to increase clicks. Make it clear, eye-catching, and relevant to your content.
• Use A/B testing. You can do this for different thumbnails, titles, CTAs, or video lengths to determine what performs best.
• Be active on multiple platforms. Share your videos on YouTube, Instagram, Facebook, or even paid advertising.
• Be direct about what you want the viewer to do. This could be visiting a website, subscribing, sharing the video, trying a product, etc.
• Add captions and subtitles. 50% of people watch content with subtitles, and that number jumps to 80% with GenZ. You can add captions with Riverside, with its transcription feature.
• Above all, create quality content. It’ll boost your brand’s authority and credibility, making your videos a must-watch.
• Record high-quality videos for the best viewing experience. If you’re filming product demos, interviews, explainer videos, or testimonials, Riverside is great for this. With 4K resolution and lossless audio, it produces crystal clear video and audio, making the video look like it was made in a studio.
• Repurpose your videos into other formats, like Shorts or blog posts. Once again, Riverside has fantastic tools for this. Magic Clips automatically picks the most informative and viral portions of your video and turns them into short clips.

FAQs on Video ROI

How to calculate video ROI?

To calculate video ROI, here’s a brief breakdown of the most important steps:

• Define your videos goal (brand awareness, sales, etc.)
• Track relevant metrics like views or leads generated
• Calculate the total value generated from those metrics, whether in terms of direct revenue, cost savings, or other benefits
• Substract the total video costs from the total value generated to determine the net return
• Divide the above result by the total video cost, multiply by 100 to get the ROI percentage.

What is a good video ROI?

While there’s no golden rule for what’s a good video ROI (since it’s dependent on the industry, goal, budget, target audience, etc.), there are certain stats you may find helpful.

Organizations that use videos grow their revenue 49% faster than those who don’t

Video can increase your organic traffic by 157%.