Video effectiveness can be measured in many ways - incremental reach and brand uplift are the most common, but how does Video impact on sales and ROI?
New research from Videology and Gain Theory has analysed the impact of video in driving offline, in-store sales – revealing positive return on investment figures. The brands in the study – titled Video Works – had varying budget levels, target audiences and creative messages for their TV and video campaigns, and the results showed that all brands had a positive ROI on their video investment, with 95% of sales occurring offline. The study also demonstrated the impact of inventory quality on ROI, showing that clients who have higher percentages of video budget devoted to broadcast content have a higher video ROI relative to TV.
When looking at analysis of digital video activity vs. TV, the average gross revenue ROI of video was 1.27x higher – so for example, a brand getting £2 ROI for TV would be getting £2.54 ROI for Video. The main factors impacting on level of ROI was amount of Broadcaster presence on Video and varying burst activity.
In order to understand how to optimise to ROI, Gain Theory looked at the current percentage of online video planned as part of the AV budget and found that brands were vastly underspending, averaging at 5% of the brand’s AV mix. Conversely, they found that the most gross revenue was gained on a mix including 12.8% online video, suggesting that in most cases, brands should be increasing their presence in this environment for optimum returns.