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Is Video Marketing a Good Investment?


For small businesses with a tight marketing budget, it's important to make sure that every dollar spent on marketing that will have the best return on investment for your business. By asking yourself a few simple questions, you can prove your video ROI, helping you make better-informed decisions to ensure you get the most value out of video production.


What’s the purpose of the video?

Let's imagine you're a company who runs tours and you want to produce a highlights video showing that off. The purpose of the video is to let customers know about the tour you offer.


What’s the video’s value to your viewer?

The value to the viewer is that they get a preview of the tour, so they know what to expect before booking.


What action do you want your viewer to take after watching your video?

In this case, you would like the viewer to book a tour. Displaying the video somewhere where a button or link allows viewers to book immediately, such as a website or Facebook will lead to a higher number of conversions.


Does that action lead to a conversion that contributes to your return on investment?

In this case, more customers booking a tour is the "value," on the video or "investment." We can calculate the ROI by taking the cost of the video and dividing it by the value provided by a conversion. For example, let's imagine the video cost $2,000 to produce, and the tour costs $100. The video will give a return on investment if 20 people book the tour, and every booking after that is pure profit. A video can increase landing page conversions by 80%, which is why 83% of businesses say videos have a good ROI.


Note: the crucial essential thing to note about a video is that although it has a higher upfront cost, it can be reposted and lead to conversions long after being produced. It doesn't matter which industry you are in, by calculating your videos ROI you can better understand whether video marketing is the right choice for your business.