Do You Know How to Clearly Define the ROI on Video?

As a marketer, you need to judiciously spend your marketing budget on efforts that provide results. A solid strategy will help you quantify your goals, and a good story will help you accomplish them, but if your expectations do not align with your budget, ROI’s are difficult to prove. You need video production that works well within your budget and that delivers the results you expect.

Hopefully, you already have a plan of action in place where you’ve identified your primary objectives, defined your audience, and set clear KPI’s. If you’ve done this, then setting your video production budget will be easy because you already know what you hope to accomplish. Now you simply need to evaluate what you’re willing to pay to achieve these goals. In determining your video production budget, here are three things you need to consider.

Set Clear Expectations

Before you can measure ROI on your video, it’s important to place a valuation on your KPIs. For example, many brands measure the success of a video based on the number of impressions or views it earns. If this is how you’ll be measuring success, you should think through how much you’re willing to spend to earn the impressions? What are 5MM impressions worth to your brand?

Another valuable metric that brands use to measure success is customer acquisition cost (CAC). If you measure success by the number of new customers you earn (and presumably you know the customer lifetime value, or CLV), you should calculate how much you are willing to spend to achieve your goal. What if you know that it costs 1.5K to acquire a new customer and that each new customer is worth 7.5K over their lifetime with your brand? Does that change how much you are willing to budget to acquire customers?

Producing these numbers and setting clear expectations will take time and effort, but understanding what you will potentially gain will help you determine a reasonable video production budget.

Determine Production Quality

Now that you have a budget range based on your projected ROI, you can confidently search for the best video production solution. Depending on your production needs and project scope, video production costs can range from as little as 1.5K to as much as 1.5MM. Decisions like crew size, on-screen talent, equipment usage, etc., are all production elements that will be factored into the final cost.

Some brands choose to produce video in-house or hire a videographer/contractor to produce their video. This option will generally save you money but can limit professional/creative execution. But if your video concept is a basic interview plus b-roll (think “about us” style video), these production options can be pretty great.

Other brands hire a production company or advertising agency to handle their video production. This is generally a good option when the concept requires professional oversight (think scripts & storyboards, complete sets & acting). This option also generally includes professional roles like audio engineers, gaffers and a director.

There are, of course, countless exceptions to these over-simplified groupings, but the key is finding a solution that meets your needs creatively and helps you accomplish your goals while remaining within your budget.

Consider Media Buys

Have you considered investing in the distribution of your video to ensure its success? Producing a video and simply posting it on social media will likely not perform as well as you’d like. In order to get the most out of your video production, you should consider earmarking some of your budgeted dollars for a media spend.

Average media budgets can range wildly from a one-time spend of a few hundred dollars to a monthly recurring spend of 1MM. It all depends on your goals and available resources, but if you’ve never spent money on digital advertising, a good place to start is 10% of your production budget. And we’d recommend spending 10% each month for at least a 3-month feasibility test.

WANT TO GET RESULTS FROM YOUR VIDEO?

When you're ready to begin producing a video for your brand, let us help you. We'll walk you through our Script-to-Screen process to ensure that your video gets the best results for your budget.

ABOUT RED PRODUCTIONS

Red Productions is an Emmy award-winning film and video production company based in Fort Worth. We make beautiful, compelling videos that clearly communicate critical brand messaging. We’re a collection of writers, producers, directors, cinematographers, editors, and marketers, and we all trust in the power of good narrative and its ability to capture audiences’ attention.