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Flawed analysis of statistics on web video conversion rates

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Web video’s meteoric rise

Web analytics firm, KissMetrics.com today blogged about the success of video in converting web traffic into buyers, based on data collected by the Austin-based video company, Invodo.

KissAnalytics wrote, “The great thing about online video is that people vastly prefer watching over reading (just consider the last time you watched the news versus reading a newspaper!) It spans nearly every industry and demographic. Organizational housewares e-tailer StacksAndStacks.com reported that visitors were 144% more likely to purchase after seeing a product video than those who did not.”

Without a doubt, web video is increasingly popular, with an average of 200 billion video views per month now and rising, and the time spent watching video is simply skyrocketing. Consumers want video, they crave it, they are coming to expect it, we offer no argument there.

Invodo cites MediaPost, noting “product videos play a key role in consumer purchase decisions, citing a 9x increase in retail video views at the start of the 2011 holiday season.” That is an amazing jump in video views and is quite impressive.

Where the argument gets sticky

Any seasoned marketer will tell you that increased foot traffic does not always mean increased sales – the pricing could be wrong, the packaging or presentation might be off, or the wrong demographic targeted, leading to stagnant sales regardless of traffic. Additionally, increased sales does not imply increased foot traffic. The two are linked, but are relatively independent while depending on a variety of factors.

The argument is being floated around blogs nationwide, not just at KissMetrics that somehow increased traffic or sales implies that people prefer video over reading or that increased video views means rising sales, and it is simply not proven by the statistics quoted. A retailer noting that visitors that watch a product video are more likely to buy is not necessarily true either, as the analysis does not take buyer intent into consideration – it is possible that what is equally likely is that buyers that intend on purchasing at the outset are more likely to watch a product video to affirm their decision.

The analysis that web views and sales rising is akin to saying a retailer has doubled foot traffic in January (likely because of an ad they ran in the PennySaver) and sales rose (likely because they dropped their prices by half). There are too many variables to simply decide that a rise in video views or sales means consumers prefer to watch video or that they are basing their decision on video – it is just as likely that they are affirming their decisions based on video.

What the data does prove is that the number of web video views are skyrocketing which shows a consumer demand for video, without a doubt. The data also proves that web sales are on the rise (which may or may not be linked to video viewing as buyer intent is unclear), as they are every year as online shopping has become mainstream.

More studies of the growing video industry will prove one way or the other in coming years – the current analysis may or may not be a misinterpretation of a complex set of numbers.

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33 Comments

33 Comments

  1. Russ Somers

    January 17, 2012 at 12:37 am

    Lani, thanks for creating an opportunity for everybody to better understand this. It's a high-interest topic so a lot of stats are put out there. Sounds to me like unrelated stats in the same post are being mistakenly read as though they're supposed to be related. "Sales are rising because video views are rising" isn't the Stacks and Stacks story – or the story of our many other clients who see benefits from video – at all.

    You're right that the difference in purchase behavior between video viewers and non-viewers doesn't prove causality – but it is a strong correlation and consistently seen across our client base. An interesting side note is that the correlation increases when the data is multisession. That makes sense when you consider a research-intensive purchase like a laptop or a smartphone. Viewed that way, single-session data on a purchase likely to involve any amount of research may in fact be understated.

    The online retailer has an advantage over the offline retailer running both the Pennysaver ad and the sale. Online retailers can, by A/B testing, control out intervening variables. When our clients have done this, they've confirmed conversion lift from video.

    The interesting thing to me is that conversion lift is not always the biggest decision driver for the retailers and brands we do business with. Site experience is hugely important to them, as are user engagement and SEO.

    FYI, at the start of February we'll release some research done in conjunction with the e-tailing group. It's designed to directly understand how consumers engage with video in shopping contexts. From what I've seen of the numbers so far, it'll contradict some conventional wisdom – looking forward to getting it out.

    Thanks again for raising the issue!

  2. Andrew Mooers

    January 20, 2012 at 8:27 pm

    The flavors offered are not just vanilla and chocolate any more. And the delivery methods of the media streams need to be varied. In the mode the real estate buyer and seller want, expect. Reach, frequency and impresssions. It all boils down to for ever hundred impressions, a desire result happens. It is a numbers game. And also, just because a set of eye balls and ear drums sampling today's local area or real estate are not called in to action does not mean that you don't need to build, feed that video channel for when they are ready to act.Video works, is more memorable and quickly uses two or more senses to connect, engage your audience. Give them some video they can relate to. On a regular basis to develop the habit. Get the results hitting the target.

  3. Carbonless

    January 23, 2012 at 8:14 am

    It's just another in a line of "quick fixes". Everyone should have a blog, everyone should add social media, everyone should add video.

    No – no – no!

    First, get clear about your market, their problems, your message, your brand, your offerings, your benefits…

    Then, if video is the right way to deliver that message, use it. If it's flyers, if it's direct mail, if it's email, if it's banner ads, use them.

    There is NO shortcut.

  4. Ruthmarie

    January 23, 2012 at 9:55 pm

    This is an interesting discussion. I sometimes try to put myself in the publics shoes by examining my own preferences. If it is a high-ticket item, I'm going to want to have some reading material, charts, graphs and information I can LOOK AT and analyze in my own good time. Video won't do that. Now since, I'm a real estate agent, that's important. This isn't an iPod, its a major purchase.

    The other thing is that as people flood into video….it will become less unique. So some of the advantage it may have had will be neutralized.

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Business Marketing

The Body Shop’s new policy is first come, first employed

(BUSINESS MARKETING) An issue that has been on a lot of peoples minds recently is fair hiring standards, be from sex, race, or age discrimination to former prisoners.

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The body shop hires prisoners

Anyone who has tried to get a job in the last decade can tell you that hiring is getting near dystopian. Everyone has heard jokes about needing 5 years of experience for an entry level job or the combined skillset of 3 positions to get one job. Things have gotten to the point where even some large companies are wondering if maybe hiring (and getting hired) shouldn’t be so complicated?

The Body Shop is making a radical change in the way they hire their retail employees this summer. They will be hiring on a first-come first-serve basis. Employees must meet three criteria to apply, but beyond that it’s open season – or “open hiring” as they are calling it.

1. Must be authorized to work in the U.S.
2. Can lift over 50lbs
3. Can stand for 8 hours

The company will not be performing drug tests or background checks for this “open hiring” round. The goal is to remove some of the barriers to entry for people seeking employment. This move will be hugely beneficial to the formerly incarcerated and people who have minor offenses on their record.

The Body Shop’s U.S. GM, Andrea Blieden, said, “When you give people access to something that they’re struggling to find, they’re very committed to working hard and keeping it.”

This isn’t the first time The Body Shop has tested out this hiring strategy. In December 2019, the company ran a pilot program at their distribution center. According to them, their employee turnover rate dropped from 43% to 16% and productivity improved.

This change could be equally beneficial to both employers and employees. According to PrisonPolicy.org, formerly incarcerated people are unemployed at a rate of 27%. To put that in perspective, that is higher than the overall national average during the Great Depression.

When established brands make big moves, people pay attention. If they continue to report success, The Body Shop’s hiring practices could be used as a case study for other businesses looking to shake up their hiring process. Perhaps in a few years, this type of hiring could become more common place among retailers.

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Business Marketing

Stay ahead by decluttering your Instagram accounts with this new feature

(BUSINESS MARKETING) Get a head start on your spring cleaning with Instagram’s newest feature. It may become your favorite way to views others accounts.

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instagram accounts

In a plot twist you weren’t expecting this week, Instagram is looking to make your life a little easier. Their newest app update includes a feature that groups accounts you follow into curated lists such as most and least interacted with or earliest followed to latest.

If you’ve ever looked at the number of people you follow on Instagram and wondered, “who the heck are these people?” then this update will make your heart sing. Instagram has been around for 10 years now, so it’s understandable that some of our follower lists have gotten a little out of control. Your friends and interests shift over time and it can be difficult to find time to actively curate your social media accounts.

Working with this new feature is simple. To access it just head on over to your Instagram profile and click “Following.” You should see a couple of categories above the list of accounts you follow. As an added bonus, you can also change the sort feature on your follower list. It can be set to show oldest accounts followed first or latest accounts firsts.

instagram accounts

For entrepreneurs and freelancers who don’t have the luxury of a full social media team (or any team at all) small features like this can be a game changer. If this feature sparks you to finally clean up your Instagram, here are a few questions to ask yourself when you’re trying to decide who to keep and who to unfollow.

Why did you originally follow this account?

Does this account still serve your business interests?

What was your main purpose behind following this account? As a business owner you might follow an account on Instagram for any number of strategic reasons. Perhaps this account is a fellow business owner in your area, but they’ve since closed their doors. Chances are you’ll find more than one of these cases in your least interacted with group.

Were you looking for business advice or inspiration? When you’re just starting out with your business, you might have followed a few accounts that aimed to give advice to new business owners. Well, if you’ve been doing this for a few years, you probably already know the basic advice these types of accounts are pushing. It’s time to move on.

Do you know this account IRL? Maybe your business has moved locations or changed niche in the last few years. You might have made some great connections with fellow business owners back in the day, but you may no longer run in the same circles. If you know the person who runs the account IRL and you still want to stay connected there are two options. You can either go follow them on your personal account or you can continue following, but mute the account so it doesn’t clog up your Instagram feed.

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Business Marketing

2020 marketing calendar – plan this year’s marketing strategy

(BUSINESS MARKETING) Have you ever wondered when is the best time for your ad campaign, well look no further. This marketing calendar has every event listed, even weird ones.

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When you work for a small business or non-profit, marketing is one of those essential tools that can make a difference in your monthly bottom line or fundraising take. And yet it’s often a challenge for busy owners and employees to find — and take advantage of — fresh promotion opportunities.

Add this to your toolkit… a 2020 Marketing Calendar from the team at Liramail, making note of big events and days that you can use online and IRL to engage customers and donors.

February marketing calendar

Some dates are obvious… major holidays, for instance, particularly the gift-giving ones. But you can find success around other events as well. The Central Texas Food Bank uses the Super Bowl as a driver for one of their most visible annual events, the “Souper Bowl of Caring.” On a smaller scale this year, restaurants and shops around the Austin area and all over the country used January 25, Australia Day, to raise funds for bushfire relief—drawing customers into their businesses, creating community ties and doing good all at once.

This marketing calendar compiles dates both big and small, providing plenty of opportunities for tie-ins and promotions. Running a clothing boutique? Play with Fashion Week. Looking for a good cause to support? World Wildlife Day and International Women’s Day are just a few weeks away. Valentine’s Day, Mardi Gras, St. Patrick’s Day… and that’s all just in the next six weeks.

The calendar is as useful for engaging your social media audience as it is promoting IRL events. You don’t have to own a pizza place to make a post with your team celebrating International Pizza Day and quizzing your followers on their favorite topping. You don’t have to be a veterinarian to turn Love Your Pet Day into a way to engage people by encouraging them to share photos of their pets.

And if you do have a direct tie? Absolutely use it. Each March, for instance, the small Austin well-building non-profit Water to Thrive observes World Water Day with a quick Facebook fundraiser. One of the Austin-area businesses that participated in Australia Day, Bee Cave coffeehouse/boutique Runaway Luna Lifestyle, did so because of family ties there, raising several thousand dollars with an in-store event and social media promotion of a GoFundMe fundraiser.

So page through the marketing calendar, making notes of days that you can take advantage of. And don’t forget, if you’re inspired to create an in-store event or other promotion, be ready for it. Get the initial date on the calendar, and then work backwards to create a long-range plan to support your event. Check your inventory, possibly looking for related items to feature. Book your advertising, draft your newsletter, schedule your social posts. Let your audience know that something special is coming up.

Have fun with it. Add your own dates. Whether you zero in on Talk Like a Pirate Day or Make a Difference Day, you can create new opportunities for your business or non-profit and for your customers as well.

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