Why Invest in Corporate Videos? / Measuring Potential ROI

Corporate video production is an investment, and like any investment, it should be approached with clear goals and measurable ROI in mind. Estimating the return on this type of investment can come down to projecting increased revenue or cost savings for the business. By building a solid understanding of how much impact the video will have, you’ll be better equipped to develop a budget that makes sense for your company.

Although it may be difficult to measure the exact ROI of a video, due to its subjectiveness and use for sales and marketing experiences, if you can predict any part of the return, you’ll be able to prepare an investment plan and business case.

Some key statistics on video stand out more than others, and here are a few of the most notable ones:

  • Video marketing provides marketers with an increasingly positive return on investment, as it efficiently drives traffic, leads, sales, and understanding from viewers.” – Hubspot
  • Outputs from a study conducted by Invideo reveal that, on average, people will spend 100 minutes watching online videos daily come 2022.
  • 72% of customers said they would rather learn about a product or service by way of video. In fact, 84% of people say they’ve been convinced to buy a product or service by watching a brand’s video (Optinmonster)

The following equations will give you a general idea of how much money you could potentially make from investing in videos that have analytics and ROI.

Internal Training Video Investment

(Hourly Rate For Trainer x Reduced Amount of Hours Spent Training x 5) x .1 = Video Budget

ROI = (Trainer Hourly Rate x Reduced Amount of Hours Spent Training x 5) / Video Budget

To calculate a ballpark ROI of investing in training videos, multiply the number of hours saved by internal or external training resources from creating the video times $35/hour. Then take that number and divide it by 10%. This will give you a budget that is appropriate for the investment.

If a video reduces the amount of time a trainer spends by 10 hours per week, and that person is paid $35/hour, then the ROI would be 10x if the video budget was $9000.

B2B Marketing Video

Website Traffic x (Conversion Rate of Website x 1.88) x Close Percentage x Average Project Sale) x 0.05 = Video Budget

ROI = Website Traffic x (Conversion Rate of Website x 1.88) x Close Percentage x Average Project Sale) / Video Budget

If you’re a B2B company using paid traffic to drive leads to your landing pages, you can measure the ROI of adding a corporate marketing video with this simple formula. Studies show that videos increase conversion rates by up to 80%, so if we take our current traffic numbers and multiply them by the increased rate of conversion, we can get an idea of how much more business a video could bring in. From there, it’s just a matter of calculating what budget makes sense for the video and its expected return on investment.

Therefore, if a landing page were to receive 10,000 visits monthly and had a current conversion rate of 1%, with an average lead close rate of 25% at $10,000 per sale on average, then the investment in a corporate video worth $23,500 would have an ROI (return on investment) of 20 times the original gross sales.

The following equations are for budgeting corporate video projects with assumed value and ROI. With these types of videos, the ROI is more difficult to track than the other use cases mentioned, but they’re still good starting points for preparing a corporate video budget.

Brand Video Investment

Annual Marketing Budget x .10 = Video Budget

If you want to get the most ROI for your company or product brand overview, a good rule of thumb is to invest 5-10% of your annual marketing budget into the video and plan on using it over a period of 5-6 years.

If a company has an annual marketing budget of $200,000, it might invest $20,000 into creating a high-quality brand overview video.

Event Videos Investment

Total Event Budget x .075 = Video Budget

Depending on your event, adding videos could make it more meaningful and memorable for your attendees. These videos could play at the beginning of the event or be cut-away experience pieces shown throughout the day or evening. In either case, a good rule of thumb is to invest 7.5% of your total budget into producing them.

Therefore, if the total budget allocated for your company’s yearly corporate event is $250,000, investing $18,750 to produce videos & content makes sense.

Recruiting Video Investment

Annual Recruiting Budget x .15 = Video Budget

A recruiting video has the potential to greatly improve how you communicate a company’s culture and job opportunities. A general guideline is to invest 15% of your yearly recruiting budget into producing the recruiting video.

Therefore, if you spend a total of $65,000 annually on recruiting (hiring staff, software costs, and job advertising), it would be sensible to invest $9,750 in a 5-year recruitment video.

If you use the above equations, you can establish a preliminary budget for your video that already has estimated value and support from your team. Obviously, these equation-generated numbers don’t consider all of your company’s unique spending habits, industry differences, or specific creative requirements – but they provide reasonable baselines for a fair initial investment.

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