Online Video Creates Profit Centers For Companies

Have you thought about using online video to create income for your company? If you have you, like many others, probably looked at your budget first, thought about the expenditures, and began talking yourself out of using video. Yes, it involves cost. You’ll need to create content for your online viewers to watch when they visit your website. Yes, it will take a defined strategy, time and energy. And, yes…..the payoff will be there. Your return on investment (ROI) will be enhanced. Commit now to view your online video tactics as contributors to your profit center. Begin today to use video to create sales for your organization. The money you invest in creating video will return to you in sales conversions. Isn’t that what you want, more sales?

Let’s look at some numbers to help understand how you will profit from online video as a marketing tactic. United Surf Supply (USS) is a hypothetical company that sells equipment and supplies to those that enjoy ocean surfing throughout the world. USS has $100,000 reserved each year in their budget for online marketing. They spent the full amount last year and have not yet incorporated any online video in their sales activities. They received 100,000 clicks to their website’s landing page. The page they are targeting and referring visitors to has one product showing for sale. Pricing of this product has been steady at $100. USS found that visitors to this particular webpage converted at a rate of 2 percent. Translated, that means that after every 100 clicks to the page they would receive $200, or a total of 2 sales. Applying that to their $100K marketing budget for online sales, they could create a total of 2,000 sales each year. Each of the sales would bring in $100 so this means that their $100K marketing budget would be fully recovered because the 2,000 sales at $100 per sale would total $200,000. They recouped their costs with $100,000 profit which is will fund their online marketing budget the following year. Keep in mind that USS has not provided their viewers with video content on their webpage.

If USS would include video on their page, their rate of sales conversions could increase by 20 percent. It’s reasonable and it does happen in the real world. Case studies and industry data indicate this is completely possible. In the case of USS, their conversion rate could increase 0.4 percent by adding online video. Doesn’t sound like much of an increase, so let’s look at the numbers using the same circumstances above. A 2.4 percent conversion rate on 100,000 clicks equals 2400 sales. At $100 per sale those sales total $240,000. The sales USS made just increased by $40,000. And, video does cost to incorporate into the online marketing budget. Would it be realistic for USS to add it from a numbers perspective? They would have to come up with the investment for production costs, delivery costs, and other costs associated with implementing video into their campaign. If the production of their video is $3,000 and the annual delivery cost of the video content to their viewers is $500, then the video would cost them $3,500 to include in their marketing strategy. The increase in sales yielded USS $36,500 after the expense of adding video is subtracted. USS can expect that annual delivery of their video would run about $500 if they wanted to continue converting webpage views into sales.

Simply by adding video to their sales cycle USS increased their revenue. Television marketers often create television spots and spend $100,000 to $300,000 for one spot or commercial. If that is what your company does, you want to shift some of that budget into creating and implementing video to increase your online sales conversions. You can do this during the same shoot even if you’re working on a television commercial now. Television commercials are typically created in two ways: (1) the television shoot takes most of the time and the entire budget, or (2) the television shoot and video footage are created on separate occasions.

If your company currently creates commercials for television, then you can shift some of your budget into video content by connecting the two events. This means you shoot television content and video content during the same session. Producing them both during the same session, you can create content to capture the attention of both audiences without the double expense of independent filming sessions. Using this strategy you can reduce budget spikes with one filming session. To make this work it’s necessary to think of your online video as a profit making opportunity rather than an additional expense for your company. In the end, the content you create and use for online video will enhance your sales conversions and more than increase your ROI.

Online landing pages with video included are known to increase sales conversions and ROI. Online Video Revolution: How to Reinvent and Market Your Business Using Video by John Cecil walks you through the elements necessary to successfully add video to your own landing pages and it’s online now at Amazon.com.