invodo watch this_2012

T h e O n l i n e R e t a i l e r ’ s G u i d e t oV i d e o M e r c h a n d i s i n g S u c c e s s

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table of contents

www.invodo.com | © 2012 Invodo, Inc. All Rights Reserved.

• Introduction .............................................................................................. 1

• Why Video Matters More than Ever to Online Retailers ...................... 2

• Why View Rate Matters .......................................................................... 3

• Research Results ..................................................................................... 4

• Beyond Merchandising: Solving the Online Retail Video Problem ... 9

• Summary ................................................................................................. 11

• Talk to Us ................................................................................................. 11

• About Invodo ......................................................................................... 11

• References ............................................................................................. 12

Introduction In 2010, we launched groundbreaking research highlighting the

impact of video merchandising on retail websites. It was the first

study of its kind, providing a guide to best practices for brands and

retailers who wanted to increase online retail video views and,

therefore, increase video impact. We at Invodo used this data to

create and implement video strategy for our clients.

However, a lot has changed in a short two years. Do the original

hypotheses still hold, and what has shifted? What new insight is out

there that enables retailers to improve their online video strategy?

We visited data from a subset of Invodo client product pages, and

we’re pleased to present the results of our updated research.


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Before we jump into the research, let’s review some tasty third-party statistics to remind ourselves why we should care. Comscore reports that in April 2012, nearly 85% of the US audience viewed online video1, and Cisco claims that video now accounts for over half of all web traffic2.The average viewer watches 21.8 hours of video per month, nearly twice the amount as in 20101. These numbers show the rapid shift from the first screen, the television, to other screens, including computers, smartphones, and tablets.

Video continues to shine in e-commerce, and was named a key digital trend for 2012 by eMarketer3. 76% of marketers planned to increase their video marketing efforts in 20124, and with good reason: research shows that video works for e-retailers. Consumers who view product videos are 85% more likely to buy according to Internet Retailer5. Additionally, numerous sources have documented significant conversion rate increases, which can be attributed to the fact that videos educate consumers with product information and specifications, engage the 60-70% of shoppers who learn visually or audibly6, reduce cart abandons, and reinforce your brand through increased consumer loyalty and differentiation. Fewer returns and improved SEO are also clear benefits7.

Why Video Matters More than Everto Online Retailers


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IncreasedConversion Rate

Reduced CartAbandonsReduced Returns

Improved SEO

The key metric here is View Rate (VR). Expressed as a percentage, VR is the ratio of Views (number of video plays) to Impressions (number of pageviews). To make it very simple, a 5% VR means that if a webpage with a video was served 100 times, end users chose to view some portion of the video 5 times.

Assume that a particular product page on your site receives 100,000 hits per month. The product costs $100 and currently converts at 3%, generating $300,000 in monthly sales. Let’s say that a video is added to the page, and the conversion rate for video viewers is 6%. That’s a big jump, but it only holds weight if a significant number of people actually watch. If your VR is 1%, the product’s monthly sales total increases to $306,000. However, if the VR is 5%, the monthly sales total increases to $330,000. That’s a compelling difference, especially when hundreds more product pages are added to the mix. VR has a compelling effect on revenues site-wide, so it’s important to make your VRs as high as possible for the greatest impact.


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0% 2% 4% 6% 8% 10%

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0

Higher View Rates Increase Revenue

Why View Rate Matters

In this study, we reviewed video view rate data over a three month period between March 2012 and June 2012 from a wide range of our online retailer clients, including Sports Authority, Verizon, Moosejaw, Lenovo, and many more.

How can an online retailer maximize video View Rate?We tested our hypotheses and found the following results.

Research Results


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Hypothesis 1:

Larger Calls to Action Increase View Rates.

Size Impact on View Rate

Actionable Recommendation: Ensure that your call to action is large enough to attract the consumer’s eye. Then, make it bigger. It makes a difference.

Calls to action come in many different shapes and sizes, and can vary widely based on each retailer’s preferences. We thought small CTAs, images less than a 5,000 pixel dimension (if image height x image width = area), might suffer in comparison to larger CTAs, but we wanted to run the numbers to verify or disprove that claim.

The data confirms the hypothesis. Large CTAs generate a VR of 8.14%, more than double

that of the 4.07% for small CTAs. This means increasing the size of the CTA makes the single

greatest impact amongst all other hypotheses we tested. Something to consider is that a

smaller CTA often lacks the flair that a larger image has room for – they are frequently less

colorful, lack text, and have less detail overall. We’ll do further research here. Exactly what

makes a larger image so much more successful? Is it really all about the size, or is it some

detail within the image itself?


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4.07%

8.14%

Small Large

Hypothesis 2:

Video above the fold garners greaterView Rates than video below the fold.

The concept of “above the fold” originates in the newspaper industry and refers to the choicest location on the front page - visible when the newspaper is folded in half and displayed face up on the newsstand. In web design, the term refers to the portion of a webpage that is visible without scrolling. Of course, the exact location of the “fold” differs based upon browser and monitor resolution. We looked at websites in 1366x768, 1024x768 and 1280x800 – the top three resolutions according to StatCounter.com which together comprise 50% of all resolutions worldwide.

Not surprisingly, this proves true. Video achieves an average VR of 5.24% above the fold,

over 1.5 times greater than the 3.43% for video below the fold.

It’s important to consider the explosion of smartphones and tablets. Mobile web usage

increased fivefold in the past two years, and now accounts for over 10% of all web traffic8.

The fold looks quite different on a handheld device than on a computer, and mobile users

fully expect to scroll through webpages. This means that while the fold still matters, the exact

location of the fold is increasingly elastic. Even in the constantly changing scope of the

internet, retailers who place video calls to action above the fold will continue to receive

better view rates and, therefore, more sales.


Actionable Recommendation: Focus on premier placement for your videos by getting them above the fold.

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Above the Fold

5.24%

Below the Fold

3.43%

Placement Impact on View Rate

Adding video with a text call to action(“Click to play,” “Click to view”)increases view rate.

Hypothesis 3:

Impact of Text Call to Action on View Rate

Just as the salesperson bags the deal by asking for the business, the online marketer increases conversion by asking for the click. That’s the idea.

But there are calls to action and calls to apathy – some videos have more than just a play button, but stop short of an actionable request. Examples of this include text that says “video” or “video here.”

The theory holds, with a VR of 6.16% for videos with a text call to action (CTA) versus 4.75%

with an image only. Interestingly, calls to apathy are 12 times less likely to be played than

videos with very clear text CTAs. It seems that a play button is more widely interpreted as an

invitation to watch a video than the simple statement that a video exists.


Actionable Recommendation: When possible, include a text call to action (“click to view” or similar) with the video player, but take absolute care to affirm that it makes a clear, actionable request.

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“Video”

“Click to Play”

No Text CTA

6.16%

0.50%

4.75%

Hypothesis 4:

View rate declines with an increasingnumber of elements competing forclicks on the page.

Impact of Competing Elements on View Rate

The common-sense rationale is that clicks are a zero-sum game: the more elements on a page that compete for a click, the less often any one element actually gets clicked. In analyzing the number of competing elements, we excluded global headers and footers since we believe users are focused on the center of the page if they are actually interested in the product.

The results of this hypothesis are a little different than we originally expected. Though pages

with fewer than ten elements have the highest VR overall at nearly 6%, it appears that VR

otherwise rises as the number of elements increases. This suggests that online shoppers

choose video when they need help making sense of large quantities of information. We

know that videos convey messages in a simple manner, which ultimately satisfies consumer’s

cravings.


Actionable Recommendation: Try to incorporate videos on pages with as few competing elements as possible. However, if a significant amount of information is necessary for a product page, add videos to help visitors make decisions.

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6-10 11-15 16-20 21+

7%

6%

5%

4%

3%

2%

1%

0%

4.22

%

4.39

%

5.97

%

5.76

%

Beyond Merchandising:Solving the Online Retail Video Problem

.

www.invodo.com | © 2012 Invodo, Inc. All Rights Reserved.www.invodo.com | © 2012 Invodo, Inc. All Rights Reserved.

By this point, you’re likely to agree that video benefits online retailers, and that merchandising videos as an integral element of each product page maximizes those benefits. So what stands in the way of launching a video program? Adding video requires four distinct competencies: Strategy, Content, Platform, and Network.

Content Management

SEO

Social & Mobile

Video Strategy Session

Optimization

Pre-Production

Production

Post Production

Best Practices

Hosting & Streaming

Measurement Syndication

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.


All four elements are needed for a successful eCommerce video program. Successful implementations can lead to higher video view rates and,

therefore, increased conversions and sales.

Strategy - One of Stephen Covey’s Seven Habits is to “Begin with the End in Mind.” Doing so ensures that you head in the right direction from the outset. When key stakeholders agree upon what defines success, alignment with key business goals is maintained throughout the journey.

Strategy

Content – As with any content marketing initiative, first consider the audience, message, and desired viewer response. That will help create the roadmap for the type of content you need. Creating content requires the right equipment and a substantial degree of expertise. If you acquire it from third-party sources, you’ll need to focus on moderation to ensure a consistent experience and brand message.

Content

Network – Now that you have your videos, how do you implement them in a way that strengthens your whole business? Videos don’t have to be limited to the website’s product page. Social, mobile, and email provide additional reach for your videos. Video can also be used in-store on monitors and kiosks, as a consumer engagement piece with QR codes and near-field technologies, or even on a store associate’s handheld device.

Network

Platform – How will you host and stream video content across your site? Site experience, implementation flexibility, and SEO should all be taken into consideration when selecting a platform, but perhaps the most important thing to evaluate is measurement capability. If driving increased sales is your primary goal, you’ll want a video platform capable of measuring sales and conversion impact along with customer engagement.

Platform

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Summary

Talk to Us

About Invodo

More Questions? Reach us at 1-800-280-4122 or visit www.invodo.com


Video has many clear benefits for online retailers, which are maximized when the video is merchandised appropriately. Key elements of that merchandising include keeping CTAs large enough to matter and asking for the click, placing valuable content above the fold, and understanding the quantity of information on your product pages and implementing video accordingly. Given its popularity, communication potential, and attractiveness, video can be expected to outperform text, still images, and other traditional elements. That leads the savvy online marketer to make video an integral element on a page.

We hope that you find this information useful, and we’d certainly enjoy your comments and feedback. Get in touch with one of our experts by e-mailing us at [email protected], calling us at 1-800-280-4122, or commenting on the Invodo blog at http://invodo.com/blog.

Invodo offers the expertise and tools businesses need to develop and implement a scalable, high-impact video strategy. Invodo’s closed-loop video platform is proven to enlighten customers and influence behavior, leading to higher sales conversion rates, reduced returns and increased site traffic. The Invodo platform improves production workflow, enhances SEO and collects integrated analytics to optimize ongoing video strategy. For more information, please visit www.invodo.com.

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References


1 comScore. ‘comScore Releases April 2012 U.S. Online Video Rankings [Press release]’. May 18, 2012.

2 Cisco. ‘Cicsco Visual Networking Index: Forecast and Methodology, 2011-2016’. May 30, 2012.

3 eMarketer. ‘Key Digital Trends for 2012’. December 15, 2011.

4 Social Media Examiner. ‘2012 Social Media Marketing Industry Report’. April 2012

5 Internet Retailer. ‘Inside Search’. March 31, 2010.

6 Carbo, K. Dunn, R. Dunn. Teaching Students to Read Through Their Individual Learning Styles. 1986.

7 eMarketer. ‘Video Usage in eCommerce: The Best is Yet to Come’. January 2009.

8 StatCounter. ‘StatCounter Global Stats: Mobile vs. Desktop from Jun 2010 to Jun 2012’. June 2012.

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More Questions? Reach us at 1-800-280-4122 or visit www.invodo.com

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