Before investing in video production – which can range in price from a few hundred dollars to tens of thousands – it’s a good idea to understand the value a video can provide. In this article, we’re going to talk about the value of video views on both an objective and subjective basis. If you’re a marketing manager trying to “sell” an investment in video to senior management, this article is for you.
The Lowest Possible Value Of A Video View Is About $0.25
Let’s start with a simple idea: A video view is worth whatever someone is willing to pay for it.
Google AdWords can be used to purchase YouTube video views (read more about CPV advertising here). The view costs range from as little as $0.03 to as much as $0.50, but (in our experience) $0.25 per view is a good round figure. By this metric, if you upload a video to YouTube that gets 1,000 views, than your video has “earned” $250.
1,000 video views, at a value of 25 cents per view, equals $250 in earned media (roughly speaking).
However, this calculation makes a couple of assumptions:
- That each video view is of equal quality
- That paid video views have the same impact as organic video views
These assumptions are both flawed, unfortunately. To the first point, video views range in quality – some people will watch a video for 30 seconds or so, others will watch to completion. Some will respond to your video by visiting your website, others will forget about your video seconds after watching it.
To the second point, consumers tend to “trust” content they find more than content that’s advertised to them.
So, it’s safe to say that $0.25 per video view is the bare minimum value we can assign.
Subjective Analysis Suggests A Video View Is Worth A Multiple Of $0.25
If we upload a video to YouTube and it earns 1,000 organic views, we know that a few things will happen:
- Some percentage of the viewers will respond to it by visiting our website and buying our product/service
- Some larger percentage of the viewers will visit our website, but will not buy
- More viewers still will not visit the website, but will remember something about our company, our brand, etc.
The best way to think about these viewers is to think about a funnel. Up at the top of the funnel, we have all video viewers. By themselves, these views have no value. But down at the bottom of our funnel, we have people that saw the video and converted into paying customers.
If you know how much a conversion is worth (on average), and you assume a conversion rate for your video, you can “back into” the value of a single video view.
Example: The average new customer spends $500 on parts over the course of 18 months. If we assume our video converts 1% of viewers into new customers, than we can assume a video view is worth $500 × 1%, or $5.
What’s more, viewers who come away with a positive “brand impression” have a value, as do viewers who spend time on your site without buying. These viewers might not become new customers today, but they might buy something in a few months.
Basically, video views are worth at least $0.25 each, and probably a multiple of that. The exact value will depend on how well your video generates conversions.
Testing Is The Key To Maximizing Video Value
If we focus on making videos that generate conversions, we can maximize the ROI of our investment in video production. The best way to do this is to test different videos to find a format that works.
The good news is testing is straightforward. Your video production team can use the same footage to create 2 or 3 different versions of your video (with slightly different scripts, edits, etc.), and then these videos can be tested by:
- Uploading them to your YouTube channel as “unlisted” videos
- Spending a relatively small amount of money (a few hundred dollars) to advertise each version
- Studying engagement and conversion rates for each video
When a “winner” is found, that video can be made public. Or, if you’re up for it, the video production team can re-cut the original footage based on the winning format, and you can run another round of tests.
On the low side, a single video view is worth $0.25. However, if a video can create conversions, than the value of a single video view could be several dollars.
But whatever the actual value is, the key is to invest in testing. It’s not enough to invest in video production that produces a single video. A good process will involve testing different video scripts and edits to see which is the most effective.