Here at Video Power Marketing we like testing things.  It is the only true way to know what works and what does not.  In our testing we came up with a question that could have profound effects on the outcome of our In-Stream video campaigns: “What kind of video works the best?”  A.K.A. Does the quality of your ad really matter on YouTube?  So like the Curious George that we are, we decided to test it out.

We started testing different video ads in the same campaign. All targeting groups were the same and the purpose of each was to generate leads.  The ad would take people to a landing page, where they would enter their name and e-mail address.  In return they got access to a free video course in which we would later upsell them to an actual product.

Low Quality In-Stream Ads: Shot From My iPhone

• CTR: 3.14%
• Conversion Rate: 14.3%
• CPA: $0.98

The first of the  In-Steam ads was a lower quality video that was actually shot on an iPhone.  We thought, as most of you are probably thinking right now, this would be our worst performing video.  However, life is full of surprises.  This video was actually our best performing ad.

Let’s compare the numbers of the first “low quality” ad with our next “high quality” ads.  This video ad was both shot on a green screen with professional lighting, filmed with a nice DSLR, took multiple takes, and then had an hour or two of post-production work.  Once again, a conversion was getting a name and an email.

The High Quality In-Stream Ads: Shot On Green Screen

• CTR: 1.95%
• Conversion Rate: 3.6%
• CPA: $1.84

This ad performed the worst between the two ads with a lower conversion rate and a higher cost per conversion.  It is funny that this is our worst performing ad, because most people kill for these kind of numbers in their TrueView ad Campaigns.  We must know what we are doing or something.

But here’s the Twist…

Now that we have looked at the numbers, let’s take a step back.  We were pretty astonished when we saw the results of this experiment.  It went against everything we thought we knew about video marketing.  So we went digging a little deeper to try and understand how this happened.  The purpose of the campaign was to acquire leads, but the ultimate goal of acquiring a lead is to turn that lead into a customer.  So we took a look into our sales funnel analytics to find what the ultimate conversion value of these new leads were.

Although the Video Ad shot with the iPhone had a higher conversion rate and a lower CPA, the conversions (Leads) that came from the “Higher Production Video Ad” were almost 2x  more likely to purchase later on.

Basically, what this means is that the value of a conversion for the higher quality videos was almost twice as high as the conversion value for the iPhone video.  So, based on leads that converted into customers, the high quality videos were the better performing videos.  At the end of the day we want ads that would get us leads with the highest value.   We are more concerned about the quality of the leads, not the quantity.  We would much rather have the video that produced less leads, but would eventually produce more customers.

The Student Becomes The Teacher

We learned from this that quality breeds quality.  While we may be able to obtain more leads from a lesser quality video, they are lesser quality leads. Quality customers come from quality leads. And yes, that last sentence does sound like something Spiderman’s uncle Ben would say.

Every part of a campaign should be focused on obtaining customers, even the video. That is why your entire video strategy should be based on conversions. It is also why we test, so we can help you create a great strategy, because every little thing matters when you investing in your future customers.

In the words of Tommy Calahan (Tommy Boy)  “I could get a good look at a T-Bone steak by sticking my head up a bulls ass, but I’d rather take the butchers word for it.” We are the butcher for TrueView and In-Stream Ads.

* Important Note: This test was ran for 2 weeks with an ad spend a little over $200 giving us a small sample size to base decisions.  These are the results we saw.

About the Author

In 2013, Google made 58.8 billion dollars on advertising.  It  is safe to say that Google is taking over the world, and you are paying for it.  The PPC model is at the heart of this subtle take over.  Keyword bids continue to rise as their demand increases.  Take for example the word “insurance”.  The average bid for the keyword “insurance” is up to 55 dollars per click.  To me that is absolute madness.  How does the average business owner expect to see great returns on such a hefty investment?

Avoid the Great Bidding War

Imagine if you had gotten into AdWords in the early part of the millennium (AdWords was introduced in 2000, self service accounts became available a couple years later). AdWords was a new platform. Bids were low and therefore the opportunity to maximize your return was high.  If you look in the right place you can find that this opportunity has re-presented itself to us. In 2006 Google bought YouTube, and just over two years ago they added TrueView (YouTube) Advertising to the AdWords family.  Much like where PPC was 10 years ago, opportunity is ripe in TrueView.  The same bid for the keyword “insurance” would cost you no more than 10 cents on TrueView.  Compared to 55 dollars on PPC ads, that ain’t half bad.  For you PPC buffs thinking you can jump right into this and find success, you need to slow your roll a little bit.  While TrueView is managed in the Adwords platform it is a whole different ball game.  You have to put in the offseason work before you get into a regular season game.  The main reason for the difference in strategies is linked back to the difference in models: PPC (pay per click) vs. PPV (pay per view).

PPC vs PPV

Situation 1: PPC

Let’s take a look at what your cost per click will look like in a Pay Per View model.  If we look at a phrase like “Real Estate Investing,” we find that keywords can be pricey.  That specific keyword is around 8 bucks per click.  The average cost per click for related keywords is above $20.  That’s absurd.  If you had a 1% conversion rate, which is actually pretty good, that means for every 100 clicks you get 1 conversion.  Based on a 20 dollar CPC you would be paying $2,000 big ones to acquire a customer.

Situation 2: PPV

Now let’s look at this from the the PPV point of view. This information comes from one of our clients.  If you look at their campaign, the total cost was $95.10. From that cost they had 83 clicks. That is a cost per click of $1.21. Comparing this to situation 1, if you get a 1% conversion rate it would take $121 to acquire a customer. If you gave me the choice between spending $121 or $2,000, guess which one I would choose?

Stealing Attention

In a pay per view model you are paying to steal someones attention.  Think about it, these people are not searching for your product with an intent to buy something. They are on YouTube to watch their video.  You can use the perfect keyword or the perfect placement to put your ad in front of the perfect person (someone who should be your future customer), but if your ad sucks they are just going to skip your ad and move on to their video.  They will not click your ad, they will not go to your website, and they will not become your customer.

What Does it All Mean?

There are two morals to the story.  The first, I believe, can be described in the words of Mr. Robert Goulet (or Will Ferrell on SNL), “You wouldn’t hire a clown to fix the John.”  In other words do not believe for a second that just because you know PPC that you can do PPV.  Second, while PPC is great, it does not offer the opportunity that is currently available with TrueView.  I don’t know about you, but I like lower costs, free traffic, and the possibility of higher returns.

About the Author

While everybody knows about YouTube advertising, not many people know how to utilize it. The real question is, how can your business benefit from YouTube Advertising? In my opinion there are two reasons why people do not advertise on YouTube.

Number one is the obsession over the viral video.  If you can get a video to go viral, good for you.  You might as well stop reading this right now.  For those who want to make money without having to wait for a viral video (which will most likely never happen), then keep on reading.  

The second reason people do not use YouTube advertising is because they do not understand how it works, nor do they understand the opportunity that comes with it.  I want to share with you this opportunity.

 Proof That It Works

 I currently have a client that is going gangbusters using the Trueview advertising platform.  Trueview is the technical term for YouTube advertising.  So, when we talk about Trueview advertising, we are referring to  YouTube advertising. This is all done using Google Adwords.  The first thing you should know about this campaign is that it took 3 months for us to start seeing a return on ad spend.

It starts out like an experiment.  You have to spend money to find out what works and what doesn’t.  However, when you find what works, it works well.

It’s not like a Viral Video that gets a huge spike in traffic and then goes away.  We’re talking about consistent guaranteed results.  Where you put in a dollar and get back a dollar fifty.

In the first two months with this client, we had an ROI of almost negative $14,000 dollars.  In month three we finally figured it out and started seeing a return on our ad spend.  In months three to five we have had an ROI of $30,000, $30,000 and $60,000 respectively.  So while for 2 months we lost money, today we have a total ROI of over $100,000 dollars solely based on the clients Trueview ad spend.  For every $1 we spend on YouTube advertising, we make $7 in revenue, so basically we’ve built a money making machine.

3 Secrets to a Good Campaign

There are certain things when you and your business need to think about when starting your campaign.

1. In your video, have a great hook.  How many of us have gone on YouTube and when the ad comes up, we skip it after 5 seconds.  You need a hook.  You need the people who are possible customers to keep watching you. People who aren’t possible customers are gonna skip it no matter what.  How you keep the possible customers watching is what makes a great campaign.

2. Targeting possible customers is an amazing part of TrueView advertising.  You can target any demographic you want.  It is also possible place your ads on certain YouTube channels and videos.  So go ahead and take your ads and put them on your competitors videos.  You can literally hijack traffic and customers from your competitors.

3. The main secret that many people do not realize about the YouTube ads is that they are clickable.  If you click them, people will be brought to your site.  The most beautiful part is, you do not pay for clicks, you pay for views.  For those that are familiar with Google Adwords, you are paying buckets for a click.  With Trueview (YouTube advertising) you are begging these people to click.  As long as they click before 30 seconds, you get them onto your website, for free.  I will say that again for you… Free.

Want to Take Advantage of YouTube Ads For Yourself?

There is so much more I can teach you. Sadly, it cannot all be put in one article.  The things I wrote about are just the tip of the Iceberg.  I guess you could say they were the “tips” of the iceberg (get it?).  If you really want to do this right, check out the Video Power Lab. It’s a collection of all of our tactics and strategies presented in easy step-by-step tutorials that will help you set up successful, converting Video Ad Campaigns.

If you’d like to work together, or if you’re unsure what you need, fill out an Opportunity Brief and we can discuss how to best help you over a Free Consultation