Budgeting for Video Marketing: Where to Start

nConnect Urban ForestryIt can be difficult knowing just how much you should budget for media marketing. Here are some factors that will help you know how much to spend.

First lets look some statistics. The Online Publishers Association says 80% of people remember watching a video on a website they visited in the last month. Of those, 46% took action and 12% purchased the specific product featured in the ad.

According to ComScore, website visitors are 64% more likely to buy a product after watching a video.

A typical business will spend between 3% and 8% on marketing.

Conservatively, you can then break that down into spending about 5% of your marketing budget specifically on video, or about 5% of the expected profits from a campaign.

However, many spend considerably more than just 5% on video marketing simply because video can be so effective. For example, if video is a key component for an event that includes your primary call to action, you could justify spending 50% or more of the event budget on the media piece.

You can also get more bang for your buck by using a specialized media company. For example, my company can usually deliver 10% to 40% greater results than media clients create in house or by using other companies. That difference is due to a 15 point analysis I’ve developed for my non profit clients. (We will save the topic of how not all video marketing or fundraising is created equal for another post.)

Lets look at a small campaign where the goal is to raise $100,000. If you use a video to make your key appeal at an event, you’ll likely increase your returns by at least 10%. So by spending under $10,000 on a video fundraising piece, you will likely still make a profit. In fact you could make $20,000 to $40,000 or more.

In a larger campaign, say a $1,000,000 campaign, the results could be even better. You could bring in as much as $200,000 to $400,000 more. Again, I have to stress these results would only come from a stratigic media piece and not likely from a video created by a volunteer or internal staff member who “does video on the side.”

Alternatively, you don’t want to spend too much on a video. If you are working on a smaller campaign and you expect the profits to be around $50,000 for example, it doesn’t really make sense to spend more than $5,000 where you would just be breaking even.

Keep in mind that a video’s worth is more than what it might bring in at a single event, since it will likely have a long shelf life and can be shown over and over again in various ways and places for a year or two.

Also, the bigger your budget is, likely the less you’ll need to spend on marketing. Walmart, for example, spends only 2-3% of its budget on advertising simply because it’s total budget is so large. However, the larger your available budget, the more you’ll want to maximize your resources by creating videos that focus on segments of your market or constituency, using surveys or focus groups to make sure you are meeting their needs and using higher end video production techniques, talent, graphics, etc. In a larger campaign, these elements will add hundreds of thousands, possibly millions of dollars, in income.

Questions or comments? Feel free to post them below or contact me personally.

Next month we’ll take a look at video analytics and what results you can expect from posting a single video versus multiple videos.

July Video Marketing Recap:
I had some good feedback from last months post, A Helpful Video Marketing Checklist. No takers on the survey however. Let me know if you have questions you would like addressed or topic suggestions for upcoming posts.

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