Video Essentials

Social Video ROI: Why it Matters for Marketing

Social Video ROI (return on investment) has finally come into prevalence, a claim based on two key survey results from Social Media Examiner’s 2012 Social Media Marketing Industry Report:

  • Video marketing holds the top spot for future plans: A significant 76 percent of marketers plan on increasing their use of YouTube and video marketing, making it the top area marketers will invest in for 2012.
  • ROI has become a top-priority. The number-one question marketers want answered is how to track the ROI of social media. (It can be presumed that ROI expectation applies just as much to video as any other media or social channel, if not more so.)

The Challenge of Measuring ROI of Social Video
First, there’s the challenge of how to align the engagement data provided by social video key performance indicators with real-world economic objectives that nearly every business today deals with: sustainability and profitability. The problem is that too many marketers involved in social media today, including with video, ignore this. Thinking that it’s simply enough to be part of the community and engaging with others online, they are quick to dismiss that there needs to be the kind of qualifiable and quantifiable outcome.

One notable thought leader in the social video arena is Kevin Nalty, a popular YouTube partner and the author of Beyond Viral: How to Attract Customers, Promote Your Brand, and Make Money with Online Video. He’s also the consumer product director of psychiatry consumer marketing at Janssen-Cilag (Johnson & Johnson), and a former product director at Merck, so he has a strong grasp on the business side of marketing initiatives, especially with online video. Nalty stresses that that while he believes it’s true that ROI’s connotation has evolved, social video still has to meet the traditional standard of ROI for it to be a sustainable business practice, no matter what the size of the enterprise may be:

“On the ROI front, the technical difference between ‘return on investment’ is usually a quantified financial return (the revenue divided by the cost). So the statement that if it ‘betters our lives, it has ROI’ doesn’t quite make sense to me as a business guy,” says Nalty. “For instance as a marketer, I can create a lot of entertaining or educating web content to support my target customers. But that’s not directly tied to revenue… it’s goodwill or indirect marketing. Hopefully that content does help people, but if that was my only goal then I’d not likely try or succeed measuring it from an ROI perspective.”

For mid- to large-size enterprises, getting different department to agree on an ROI measurement also be especially challenging.

“My initial thought/concern is that these various pieces are often executed (at least with larger companies) by different departments that measure success quite differently.” says Nalty. “As an example, I’m guessing most PR folks (who often engage in the ‘top-of-funnel’ activities) don’t know or care about CRM.” For those new to the area, top-of-funnel means attracting new customers, while CRM is customer relationship management,

The ROI opportunity for social video is that it can be integrated into both top-funnel activities (such as marketing and public relations with reach and awareness), and also mid- to end-funnel activities (such as customer service and sales). A single social video initiative within a larger enterprise can require different measurements of success, depending on which department is asking.

Social Video ROI Doesn’t End with the Sale
Lee Odden is the CEO of TopRankMarketing and a popular speaker on the search and social media circuit. He is also the author of the newly released book, Optimize: How to Attract and Engage More Customers by Integrating SEO, Social Media, and Content Marketing. For businesses to realize social video’s true ROI value, it needs to be measured not only across the buying cycle, but also across a customer’s entire lifecycle, says Odden. This includes not just monetary purchases, but also relationship building activities, such as consumer advocacy, contributions, and collaborations with others.

So, Can You Calculate the ROI of Social Video?
Yes, says Dr. Natalie Petouhoff, director of the UCLA Executive Education Program for Social Media. Petouhoff is a former Forrester analyst, and is also the author of the Radian6 white paper, “ROI of Social Media: Myths, Truths, and How to Measure.” To demonstrate this point, Dr. Natalie created an entertaining and easy-to-follow video trilogy with Salesforce on it’s YouTube Channel: How To Build a Business Case for Social Media, How to Measure Social Media ROI, and How Social Media Benefits the Entire Company.

Conclusion: Time to Get Serious with Measuring ROI in your Social Video
As social activities become essential for businesses, measuring ROI will take on a greater role.

Businesses serious about social video need to recognize that ROI is a good thing. While it’s fine to experiment with social video at first without measuring the benefits, eventually you’ll need to show a payoff. While social activity helps companies build much-needed relationships, ultimately it’s ROI that gives everyone participating that kind of focus needed to create the best possible outcomes.

Chart image via Shutterstock.


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  1. Very important points. Agree that ROI for Social Video is key.

    It’s not all about the views. It’s about who is viewing? Is your demographic watching and taking the action you want?

    Agree with the piece is the video promotion. Promotion is your responsibility! How are you getting the word out about the video? It’s the SEO, Social Media and Content Marketing as well as making a dynamic video.

    Thanks for writing this! It is extremely important and the people you quote add dimension to the discussion.

    Posted by Pat Ferdinandi | May 9, 2012, 9:17 am
  2. Measuring social video ROI can be a daunting challenge for retailers today. In fact, ROI can be often overlooked in social video initiatives when marketers choose to focus on the less tangible goal of customer relationship building.

    Posted by Shamelle | May 9, 2012, 11:10 am
  3. Thanks for your comments, Pat and Shamelle! I can add that even with customer relationship building is something you can turn into a tangible goal, just when you ascribe it to something that’s value-based beyond immediate economic transactions. There’s a term I like called “causation theory,” where you can turn intangible items into tangible items by showing their relationship to each other in the customer funnel. That’s why I recommended Dr. Natalie Petouhoff’s video series, since I think it does an excellent job of showcasing this, including ROI goals from customer service.

    Posted by Grant Crowell | May 9, 2012, 12:38 pm
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