What’s the ROI of an explainer video

Businesses are constantly seeking new ways to engage their audience, increase brand awareness, and drive conversions.

And the explainer video is a powerful tool that has emerged as a popular choice to help achieve these goals. These short, concise, and visually appealing videos have proven to be highly effective in conveying complex messages, simplifying concepts, and capturing the audience’s attention.

But beyond its creative appeal, what truly sets explainer videos apart is their potential return on investment (ROI).

Here is an explainer video from our video animation company. Our team made this for a client.

The client loved it and their feedback was great too. See for yourself.

If you want a similar explainer video with great ROI, get in touch with us today. Our team would love to bring your ideas to life.

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In this article, we will delve into the concept of ROI for explainer videos, exploring the various factors that contribute to their success and quantifiable benefits.

Defining ROI for explainer videos

ROI, or return on investment, is a critical metric that measures the profitability and success of an investment relative to its cost.

When applied to explainer videos, ROI provides insights into the value generated by these videos in terms of improved brand performance, increased conversions, and enhanced customer engagement.

Calculating the ROI of an explainer video involves examining both tangible and intangible factors to determine the impact it has on business objectives.

Increased conversion rates

Explainer videos are powerful tools for driving conversions. Studies have shown that including an explainer video on a landing page can increase conversion rates by up to 80%.

By presenting information in a visually engaging and concise manner, explainer videos capture attention, build trust, and guide viewers toward taking desired actions, such as making a purchase or signing up for a service.

We’ve all seen this video from Dropbox, but little do we know it was a game changer for them. This simple explainer video helped them with conversion rates like no other campaign before.

Improved brand awareness

Engaging explainer videos have the potential to go viral, generating significant brand exposure and awareness.

Through social media sharing and online platforms, explainer videos can reach a wider audience, creating a ripple effect that amplifies brand recognition.

This increased visibility can have long-term benefits, as it contributes to the growth of a loyal customer base.

Enhanced SEO performance

Explainer videos embedded on websites can improve search engine optimization (SEO) efforts.

Search engines prioritize websites with engaging multimedia content, resulting in higher organic rankings.

As a result, explainer videos not only increase website traffic but also attract relevant visitors who are more likely to convert.

Competitive edge

In a crowded marketplace, businesses need a unique edge to stand out.

Explainer videos offer an innovative and modern approach to communication, differentiating a brand from competitors.

By showcasing creativity and adaptability, businesses can gain a competitive advantage that sets them apart in the eyes of consumers.

Crazy Egg put this video on their landing page. Not only it helped them stay ahead of the completion but also generated crazy income.

Effective communication

Explainer videos excel in simplifying complex ideas, products, or services, making them easily understandable for viewers.

By breaking down information into bite-sized, visually appealing segments, explainer videos enhance communication and comprehension, leading to increased customer engagement and satisfaction.

Brand storytelling

Explainer videos provide an opportunity to tell a compelling brand story.

By leveraging captivating visuals, persuasive narratives, and emotional connections, these videos create a memorable brand experience.

Effective storytelling can foster a sense of brand loyalty and resonate with customers on a deeper level.

Versatility and multi-channel integration

Explainer videos are versatile assets that can be utilized across various marketing channels and platforms.

Whether it’s embedded on a website, shared on social media, included in email marketing campaigns, or used during presentations, explainer videos can consistently deliver a unified message and reinforce brand identity.

This adaptability allows businesses to maximize the reach and impact of their investment in explainer videos.

We can take an example from Scott Thrift achieving their Kickstarter goal through an explainer video.

Measuring ROI for explainer videos

Determining the ROI of an explainer video requires tracking and analyzing various metrics, such as conversion rates, website traffic, engagement levels, and sales figures.

By comparing these metrics before and after the implementation of an explainer video, businesses can gain insights into its impact.

The digital nature of explainer videos allows for precise tracking and analytics.

Through tools like Google Analytics, businesses can monitor the performance of their videos, track viewer engagement, and identify patterns or trends.

This data-driven approach enables businesses to optimize their videos, make informed decisions, and continually improve their ROI.

Before we get into the metrics to measure ROI, let’s watch another explainer video review for a video our team created.

Tracking metrics to measure ROI

When measuring the ROI of an explainer video, you can track the following metrics to assess its effectiveness and impact:

Website traffic

Monitor the increase in website traffic after the video is implemented. Analyze the number of visitors, page views, and bounce rate to understand if the video is driving more people to your website.

Click-through rates (CTRs)

Track the CTR of any call-to-action buttons or links included in the video or video description. This metric indicates the level of engagement and interest generated by the video.

Engagement metrics

Analyze metrics such as average view duration, play rate, and drop-off points within the video. These metrics provide insights into viewer engagement and whether the video effectively retains their attention.

Social media shares and engagement

Measure the number of shares, likes, comments, and other forms of engagement the video receives on social media platforms. This metric indicates the reach and impact of the video within your target audience.

Conversion rates

Measure the percentage of viewers who take the desired action after watching the video. This can include making a purchase, signing up for a service, filling out a form, or subscribing to a newsletter.

To give you an example, the video released on YouTube by Dollar Shave Club resulted in 12,000 new orders within a span of two days.

Lead generation

Track the number of leads generated through the explainer video. This can be measured by the number of inquiries, sign-ups, or downloads resulting from viewers’ interaction with the video.

Cost per acquisition (CPA)

Calculate the cost per acquisition by dividing the total cost of producing the video by the number of conversions generated. This metric provides insight into the efficiency of your investment in the video.

Revenue generated

If possible, track the revenue directly attributed to the explainer video. This can involve measuring the increase in sales, average order value, or lifetime customer value resulting from viewers’ engagement with the video.

Customer feedback and surveys

Gather qualitative feedback from viewers through surveys or interviews. Assess their perception of the video, their understanding of the message, and the influence it had on their decision-making process.

Return on investment (ROI)

Calculate the ROI using the formula: ROI = (Revenue – Investment) / Investment x 100. Compare the revenue or cost savings generated by the video with the total investment to determine the overall ROI percentage.

By tracking these metrics, businesses can gain a comprehensive understanding of the ROI of their explainer videos, enabling them to make data-driven decisions, optimize future video strategies, and assess the impact on their business objectives.

Conclusion

Explainer videos are not only visually appealing and engaging, but they also offer a solid return on investment.

From increased conversions and improved brand awareness to effective communication and competitive differentiation, the benefits of explainer videos extend beyond their initial production.

By considering both the tangible and intangible aspects of ROI and leveraging the versatility and tracking capabilities of explainer videos, businesses can unlock significant value and drive their marketing efforts to new heights.

If you are looking for someone to make an explainer video for you then feel free to reach out to our team of professionals.