Until recently, video content was seen as an investment where performance KPIs were vanity metrics such as the number of views and vague measurements around brand awareness. These limited success metrics make it difficult to understand true value driven in terms of sales and the ability to improve future videos based on performance.
Given the huge investment brands are allocating to video content creation, new interactive and shoppable video formats provide an incredible new opportunity to understand in-depth analytics data from videos and live streams. This data can be used for performance reporting purposes as well as understanding creative insights for improved future content creation.
One of the most important metrics for measuring core return on investment (ROI) is through the concrete sales that have been generated. Of course, the way people shop is very complicated, and getting to a conversion includes a large number of different factors. Experts suggest a range from anything between 20 to 500 or more touch points are needed to get to a conversion. Additionally, factors such as category, sales cycle, price, brand perception, brand loyalty, consumer demographics, etc influence the number of interactions a brand's consumer has to have before making a purchase.
The number of different touchpoints with your brand will be essential for sales to take place, however, no matter what you are selling, the importance of quality touchpoints greatly outweighs the focus on quantity.
Shoppable and interactive video formats, such as shoppable videos and live shopping, have been proven to provide high-quality touchpoints which drive both direct conversion as well as attributed conversion.
There are different types of sales which can be used to understand ROI from shoppable videos and live shopping.
This is revenue generated as a result of a direct journey from a viewer of a shoppable video or a live shopping event clicking on a product, selecting their size/colour preferences, adding the product to their shopping cart, and checking out. This is the revenue channel which is the simplest to track. Depending on the tracking logic set up by a specific e-commerce site, the revenue generated in this way may be lost if the user adds other items to their shopping cart after the items are added from the shoppable videos. Hence, using this metric alone will provide a very niche use case for revenue generation.
Shoppable videos and live shopping events can often be a source of inspiration which start a shopping journey where the products purchased may not necessarily be the exact products that were showcased in the video itself. For instance, there may be a pair of trousers featured in the video where the user clicks through to that pair of trousers and sees the jacket which is recommended for the look, and adds this jacket to their shopping basket. This is again revenue generated as a result of the shoppable video or a live shopping event and can be tracked against shoppers who interacted with the video.
Live shopping events in particular try to encourage shopping within the same session by offering time-sensitive discounts and deals. However, in reality, we know that most shoppers don’t make impulse purchases, especially for higher-ticket items. They can discover products through shoppable videos and live shopping events, think about them for a time, and then decide to make a purchase. This cannot of course be tracked for all customers, but where this is possible, it is very useful to also understand this broader impact within a 14-30 day window from watching the shoppable video or live shopping event.
In addition to the sales happening on the same channel where the shoppable videos or live shopping originally existed, there will of course be a much broader and difficult-to-measure impact cross-channel. For instance, a shopper may have seen products in a live shopping event and later purchase these in-store, or receive retargeting ads on social media and make a final purchase through this channel.
When measuring ROI for video content, analytics tracking can be set up to gather concrete data for the first 3 types of sales. The last impact is harder to measure and needs to be added on as an additional consideration as a “bonus”.