A comprehensive breakdown of the video marketing process by costs and returns, including a detailed savings checklist
By Tim Cumming and Helen Pain, 21 Feb 2021
- The boundaries: a business video is one of the most pliablely priced business services going - anywhere between £50 and £50,000 for about 2 mins, depending on about 16 factors.
- Rule of thumb: in budgeting, aim for 10-20% of your desired gross margin return, up to a reasonable limit. For example say you want to win 10 new £50k accounts, with a GM of 60%. That's a £300k GM return, and a rule of thumb would suggest £30-60k video marketing budget (possibly half on films, half on outreach).
- Super-shrewd: if you want real value, you should buy beyond video - specifically response - and that means buying the big four components in appropriate measure: quality, duration, visibility and discovery.
Woah! The vast price range
From DIY templates at £50 to glamorous crewed productions at £50k, choosing a price tag for a business video can look bewildering. When it's too high and too low, you probably have a preference for a goldilocks price, right? But if you're quoted £5k, is that right for you? Is £25k? Let's demystify video pricing for you, and give you some buyer advantages.
Before you call round a few video firms for ballparks - as you certainly should do - spare a few moment's thought for your purpose. You'll cleverly save yourself a lot of hassle and time - and, most importantly, cash - if you just nail this early.
Think: Goal, Risk, Scope, Reliers
Four shrewd steps to video budget confidence
There are four big drivers in video projects - the drivers of all marketing projects. Often-neglected, hidden in the mists of our marketing minds, these wisdoms are actually easy to define. The components of purpose. They are:
The Four Cost Drivers for Video
- Goal - setting a goal for the video marketing project
- Risk - largely, ameliorating the risks of poor deployment and audience placement
- Scope - stretching this to include measurable repsonse
- Reliers - knowing what else is - or should be - riding on the video marketing (for example, sales)
Get these clear and you'll have an easy job of setting a sensible budget. And that means choosing a video company's going to be way easier.
Step One: Goal - or better put, Ambition
How far do you want this video project to go? Is this a step-change, or a top-up? A moderniser, or a fit-alongside? How much does this video project need to change behaviour? And whose?
If your answers feel modest, uncertain, or you haven't got the time, you might reflect on why you're doing video at all. An infographic or photography might suit you better. If, on the other hand, your answers feel mountainous and far-reaching, you might consider a pilot to keep things real, and avoid over-investing. That'd be canny.
And if your answers feel just right - kind of goldilocks - just put a number on the desired returns. Let's say a sale is worth £50k lifetime value to you, and you close one in five leads. That makes an enquiry worth £10k. So, if your ambition is for 100 new enquiries within a year, this makes your ambition worth £1m. You're wiser to an eventual budgetary size.
The maths of this ambition
100 enquiries x £50k / 5 = £1m of new business value.
Now you've got a rough number, you could even ask yourself if video is the best investment here - would it be wiser to invest in remote sales agents, or inbound marketers? They're all means to the same end. It's worth the thought.
Step Two: Risk
No matter what end of the risk spectrum you're on personally, your business is a different entity and it needs caution, protection from risk. In a video project or campaign, that translates into how much activity - and its associated risk - your firm is capable of handling in-house.
Can you properly host, embed and SEO? Can you absorb the risk of wrong-doing? Can you place well on social media, on forums or national media? Can you build lists around the target audience, and find the right locations for their reasonable attention? What happens if you fail?
It's reasonable to discuss this with colleagues and go with your communal gut. Because, it'll take a fair bit of effort to calculate the risks. Unless you're an actuary.
In your risk meeting, you might find that you're fairly confident embedding the videos on your website, but a bit uncertain on SEO, schemas, video site maps, groups and influencer outreach. In which case, ask your video marketer to carry that work. A good one will be up on SEO, configuring and populating a Youtube video channel properly, social and other media placement, engagement, prospecting, analytics, sentiment and data capture.
Let's say you're confident of being able to handle 10% of the deployment and placement work in-house. That's a helpful contribution to the 100 enquiries within a year, £1m. A pattern must be forming here, surely.
The maths of this risk
Absorb 10% of the risk in-house, expect a 10% saving on deployment or placement.
Step Three: Scope
Simple question this, but what exactly do you think you're buying? A video? A video embedded on your website, optimised for search? A video seen by some people out there? A video seen and loved by many? A video that changes attitudes and beliefs? Or are you buying a measurable response?
Unless you've got a sophisticated marketing or educational programme going, it's hard to justify anything but the last option. When you think about it, you're probably not buying a video, nor a video with an uncertain deployment onto site and search, tied to some vague placement on social and other media. You're not even buying viewings, or 'eyeballs' as they're known in social marketing. Nothing short of response should suffice.
For example: 1,000 call-to-action (CTA) responses to the video, converting 10% to 100 new enquiries within a year, worth £1m. Hmm, familiar ring to that. Then you can cost.
The maths of this scope
1,000 CTA clicks x 10% = 100 enquiries, worth £1m in new business.
Now you're warming up your shrewd. Your video firm should have a good idea of what CTA would work here. Don't expect the crystal ball; all good marketers (that's you, Petunia) know that trial-and-error is the only way to go.
Step Four: Reliers
Who or what is riding on this? A huge revenue recovery programme, or just looking a bit sharper online? The productivity of all client services, or perhaps a first attempt at upselling? The importance of the dependency is useful to know as it drives the level of acceptable ROI.
It's always wiser to invest in essential items than discretionary ones. You NEED the essentials to happen; you'd LIKE the discretionaries to. So, essentials generally suit lower ROI, and discretionary, higher. Let's suggest an ROI spectrum of around 400% for essential, ranging to 800% for discretionary.
Once you name a dependent outcome, you can easily estimate the contribution of video. And voila, you have a number.
Let's presume that 40% of your client's decision making happens online (most B2B decision surveys say it's now over 60% and rising), and you attribute only a quarter of that to new videos. You'd be apportioning 10% of the new £1m enquiry flow to video - that's £100k in value. And as it's essential, a £25k investment yielding a 400% ROI would give you £100k.
The maths of this dependency
40% / 4 x £1m / 400% = £25k budget.
And there we have our four quick drivers. Hopefully, you'll feel more confident about what you're really buying, its value to the business, and your desirable ballpark.
It may be that, as you explore these drivers, you realise that you don't like what you find, for example your ambition or dependencies are too modest. Or, your scope or risk are too big. Frankly, it's better to know that now than wade into a video project and discover an ugly truth too late. Sadly, we see many firms feeling that, and it leads to nothing but pain. Four moments of reflection (and maybe four minutes of rough maths) can remedy that.
Next, we'll explore ways to budget for the actual items and services you're buying, and to shrewdly eliminate unnecessaries.
The ultimate video savings checklist and steps
Armed with your approximate figures for purpose, we come to the big checklist - everything you wanted to know about price, but were afraid to ask. What you spend on video and what you get back are, of course, closely related. More than anything, try to remember that you're not really buying video, you're buying response.
- Quantity: How much video should you buy? Put simply, enough to get your messages through to enough people to hit target. That might be five two-minute explainers, making ten minutes total duration. The total number of minutes that you're offering to your audience will impact directly on the diversity of message and relevance that you can offer. Map out your marketing and sales pipelines and see where you most want a video nudge, then prune with caution; messages conveyed both deeply and broadly enough in under six to eight minutes total (two minutes of proposition, two to four explainer and two of reassurance or convincing) is possible but rarely seen.
- Economy: Can you have just one video? Of course. Single videos generally need to be mighty to stand on their own and generate response, for example, to a detailed answer to a common and sizable problem that your clients have. If you're considering just a single home page taster video that sets out your proposition, try to see it from your buyer's perspective. Will a taster alone make your buyer enquire? If not, what else could you support it with? The fewer videos you buy, the harder they have to work to generate response. If your budget is tight, and you can only afford one good video, try a persuader video (designed to drive viewers to a specific action) or a convincer (designed to develop a sales lead), not a proposition piece.
- Capability: check out the portfolio and reputation of your chosen video company - one of the biggest single factors of them all. Bigger, more high-end firms will largely give you more skills, planning time, reasoning, and thorough preparation. Smaller firms may tend to wing it more, focused on making, and have smaller audience winning expertise. Freelancers may be super-affordable for the creative part, but may leave you lacking in the planning, deployment and placement departments.
- Quality: What level of quality should you seek? The level that best matches your professional heft. Not technical quality, just the quality of your narrative, your story; the clarity and engagement with which it's expressed. Just as design communicates your worth, narrative quality communicates the reason to buy. That's important for every business. It takes thought and care to express your proposition, process or customer experience, in a way that feels just right to the buyer. Sadly, blandness and caution are everywhere, such as in B2B services. A quality narrative will counter that, and help you to stand out. Generally, this is one area you really shouldn't scrimp on.
- Animation: You might want animation, because it's faster, cheaper. Templated animation certainly is (for example, from build-your-own-video animation sites), and these may well help you get a clear message across at low cost. And if you position on price, templated animation will help you convey that. It's great for explaining a complex or a new process, where live action or dramatisation will be too costly. Custom animation isn't cheap, generally. You can sketch a figure of £20-£40 per second of custom 2D animation and £30-£70 for custom 3D animation, including story development, and original artwork or models. You can get this lower if you buy warehouse models or stock artwork. A word of caution, however - animation can help you to hide; it rarely builds trust because audiences aren't meeting your team or hearing your beliefs, ethos or empathy. A useful question to ask yourself: is trust more important than process? If the answer is yes, it's probably best to avoid animation. And potentially save.
- Visibility: High visibility isn't just about website prominence, or Youtube standout, it's also about search. Getting the right keywords and copy, transcript and thumbnails, in all the right places. Having a video sitemap. Ringing all of Google and Bing's nicely. And underpinning your overall SEO with new harmonious video SEO. It's worth saying that, if you're not serious about SEO, don't even think about doing this. SEO is a long game, and it's costly. This is a potential saving area.
- Reach: How many people do you need to reach? Handy tip: 'as many as possible' isn't really a viable answer. Just put two numbers on it - viewings and responses. Responses to measure against your goal. And viewings to work out the response rate, which is a measure of the relevance of your message. These numbers will guide any decent video marketer on the amount of placement work that your project needs. If you're not seeking a measurable response (er, why?) this feature can be dispensed with.
- Graphics: refine the amount of graphics work - this kind of work can add much to cost. It's great to clarify or reinforce points with graphics, but simple and affordable often works as well as beautiful and sophisticated in this context.
- Editing Pace: the cut rate - i.e. the average duration of a shot, directly influences the amount of work an editor has to do. A pop video is usually around 50 to 60 cuts a minute. A fast-paced business promo might be 30. A typical explainer, perhaps 12-15. And an emotional advert or poignant convincer might be six to eight. In short, there's room for savings if you've an appetite for slow pace.
- Locations: cutting the number of filming locations will help. If you're having remote filming done, this isn't an issue at all, but if you're having local filming - at your workplace or key premises - costs can climb when they move beyond a single location.
- Interviews: if you can hold down the number of filmed interviews, you'll trim a little budget here. But it's small. You might actually want to add extra interviews to boost the visual variety, and to show the 'stick of rock' effect - you're all aligned in your ethos and beliefs, all the way through the whole company. Worth bearing in mind that there's a minimal saving on offer.
- Richness: This is one of the hardest parts of cost-cutting because you need a clear sense of what you're cutting. Dropping from 12 to eight shot types can stifle a promotional film, making it look lifeless or wrong. On the other hand, if you've got an intimate exec profile, that number would work well. The visual richness of films - the variety of shot types - is always reducible, but it needs deft creative handling. Always worth asking your video firm to clarify that.
Getting a Quote - Avoiding the Pitfalls
Now you know the bounds of your project, and which economies you're prepared to make to get maximum value, you can call around and ask for quotes. Remember to stay shrewd - and, below, we explain how to watch out for under or over detailed proposals.
The over-detailed proposal
To get you to price, many video firms will earnestly take you through a step-by-step process to define a brief first. Any video firm worth its salt will want to inspire you, demonstrate thoroughness and clarify all the deliveries. In all honesty, that's a fairly lengthy process and at the initial stages of scoping a price, you're probably just not ready for all that.
A further problem is that building the brief over several meetings allows your video firm to gently talk you into a larger project than you need. Many will avoid the marketing consequences of the video's business purpose because they're limited to production alone, lacking the skills needed to deploy or place your videos. Firms making bland videos that remain unseen and ineffective is a sad consequence of buying badly.
The under-detailed proposal
At the other end of the scale, you may be drawn to others who may just ballpark you to win the contract quickly, and if you're budget oriented and happy to go along with that, they'll work to it. It's a weird way of working though. You're always collaborating with a feeling that nobody really knows if you're over or under-spending.
If you want a price for a measurably rewarding video, you should consider the following:
- Intention: define your purpose clearly
- Placement: buy beyond the video itself - into web deployment and social or paid placement
- Rightsizing: polish off with an informed gallop through the gamut of cost-saving ideas above
In video marketing, hardly anyone buys wisely. A small burst of thinking, and you'll be ahead of your competitors.
So, now you're budgeting wisely, you've moved towards your goal. Time for a chat about process?