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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

10 must-listen-to podcasts for business owners

(MARKETING) If you’re a business owner and want to learn something…anything…give one (or all) these podcasts a listen.

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As podcasts grow more and more popular, it has become increasingly difficult to sort through the sea of excellent options out there.

From interviews with business leaders to industry-specific advice from experts, podcasts are an incredible free and convenient way to get a small dose of inspiration and knowledge.

This short list offers just a taste of the myriad of business podcasts available. Whether you’re an aspiring entrepreneur looking for some tips on breaking into a new industry or a seasoned vet hoping to get some new inspiration, we hope you’ll find something here worth listening to.

How I Built This, hosted by Guy Raz.

Podcast fans will recognize Guy Raz’s name (and voice) from TED Radio Hour. While that show can be a great source of inspiration for businesses, one of the most consistently inspiring shows is his new project that shares stories and insight from some of the biggest business leaders in the world. In just four months, Guy has talked to everyone from Richard Branson and Mark Cuban to L.A. Reid and Suroosh Alvi. While there are plenty of excellent interview-driven shows with entrepreneurs, if you want to hear about the world’s best known companies, this is your best bet.

The Art of Charm, hosted by Jordan and AJ Harbinger.

The Art of Charm is a business podcast by definition, but the advice it provides will definitely help you in other parts of your day-to-day life as well. With over three million listens a month, the incredibly popular show provides advice, strategies and insight into how to network effectively and advance your career and personal life.

StartUp, hosted by Alex Blumberg and Lisa Chow.

If you’re an entrepreneur, there is no excuse not to be listening to StartUp, the award-winning business podcast from Gimlet Media. The show’s talented hosts come from incredible radio shows like Planet Money and This American Life and bring a top-notch level of storytelling to the show, which provides behind the scenes looks at what it is actually like to start a company. Now on the fourth season, StartUp is one of those business podcasts that even people not interested in business will get a kick out of.

The Whole Whale Podcast, hosted by George Weiner.

One of the best things about podcasts is the wide variety of niche shows available that go in-depth into fascinating topics. One of those shows is the Whole Whale Podcast, which shares stories about data and technology in the non-profit sector. You’ll get detailed analysis, expert knowledge and can hear from a long list of social impact leaders from Greenpeace, Change.org, Kiva, Teach For America, and more.

Social Pros Podcast, hosted by Jay Baer and Adam Brown.

Navigating the surplus of social media guides online can be a nightmare, so look no further than Social Pros. Recent episodes talk about reaching college students on social media, the rise of messaging apps, and making better video content for Facebook. Plus, there are great case-studies with companies doing social right, like Kellogg’s, Coca Cola and Lenscrafters.

Entrepreneur on Fire, hosted by John Lee Dumas.

One of the original entrepreneurship shows, Entrepreneur on Fire has logged over 1,500 episodes with successful business leaders sharing tips, lessons and advice learned from their worst entrepreneurial moments. Sometimes humorous, sometimes heartbreaking, always inspiring, this show is sure to have at least one interview with someone you can learn from.

The $100 MBA, hosted by Omar Zenhom.

Think of The $100 MBA as a full-fledged business program in snack-sized portions. The daily ten minute business lessons are based on real-world applications and cover everything from marketing to technology and more. Cue this show up on your commute to or from work and watch your knowledge grow.

This Week in Startups, hosted by Jason Calacanis.

This is your audio version of TechCrunch, Gizmodo, or dare we say The American Genius. Each week, a guest entrepreneur joins the show to talk about what is happening in tech right now. You’ll get news about companies with buzz, updates on big tech news and even some insider gossip.

The Side Hustle Show, hosted by Nick Loper.

This is the show if you want answers for the big question so many entrepreneurs face. How do I turn my part-time hustle into a real job? Featuring topics such as passive income ideas, niche sites, and self-publishing, host Nick Loper is upfront and honest about the tough world of side hustles. The show features actionable tips and an engaging energy, and may just be that final push you need to grow your gig.

Back To Work, hosted by Merlin Mann and Dan Benjamin.
Focused on the basics that you don’t think about, Back To Work looks deep into our working lives by analyzing things like workflow, email habits and personal motivation. Somewhere between self-help, and business advice, Back To Work takes on a new topic relating to productivity each week.

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Business Marketing

Why your coworkers are not your ‘family’ [unpopular opinion]

(MARKETING) “I just want you to think of us as family,” they say. If this were true, I could fire my uncle for always bringing up “that” topic on Thanksgiving…

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family coworkers

The well-known season 10 opener of “Undercover Boss” featured Walk-On’s Bistreaux & Bar. Brandon Landry, owner, went to the Lafayette location where he worked undercover with Jessica Comeaux, an assistant manager. Comeaux came across as a dedicated employee of the company, and she was given a well-deserved reward for her work. But I rolled my eyes as the show described the team as a “family.” I take offense at combining business and family, unless you’re really family. Why shouldn’t this work dynamic be used?

Employers don’t have loyalty to employees.

One of the biggest reasons work isn’t family is that loyalty doesn’t go both ways. Employers who act as though employees are family wouldn’t hesitate to fire someone if it came down to it. In most families, you support each other during tough times, but that wouldn’t be the case in a business. If you’ve ever thought that you can’t ask for a raise or vacation, you’ve probably bought into the theory that “work is a family.” No, work is a contract.

Would the roles be okay if the genders were reversed?

At Walks-Ons, Comeaux is referred to as “Mama Jess,” by “some of the girls.” I have to wonder how that would come across if Comeaux were a man being called “Daddy Jess” by younger team members? See any problem with that? What happens when the boss is a 30-year-old and the employee is senior? Using family terminology to describe work relationships is just wrong.

Families’ roles are complex.

You’ll spend over 2,000 hours with your co-workers every year. It’s human nature to want to belong. But when you think of your job like a family, you may bring dysfunction into the workplace.

What if you never had a mom, or if your dad was abusive? Professional relationships don’t need the added complexity of “family” norms. Seeing your boss as “mom” or “dad” completely skews the roles of boss/employee. When your mom asks you to do more, it’s hard to say no. If your “work mom or dad” wants you to stay late, it’s going to be hard to set boundaries when you buy into the bogus theory that work is family. Stop thinking of work this way.

Check your business culture to make sure that your team has healthy boundaries and teamwork. Having a great work culture doesn’t have to mean you think of your team as family. It means that you appreciate your team, let them have good work-life balance and understand professionalism.

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Business Marketing

Market your side hustle with these 6 tips

(BUSINESS MARKETING) It can be hard to stand out from the crowd when you’re starting a new side hustle. Here are some easy ways to make your marketing efforts more effective.

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Side hustles have become the name of the game, and especially during these turbulent times, we have to get extra creative when it comes to making money. With so many of us making moves and so much noise, it can be hard to get the word out and stand out when sharing your side hustle.

Reuben Jackson of Big Think shared five ways that you can market your side hustle (we added a sixth tip for good measure), and comment with your thoughts and ideas on the subject:

  1. Referrals: Don’t Be Afraid to Ask!
    If you’re going to make a splash, you have to be willing to ask for favors. Reach out to your network and ask them to help spread the word on your new venture. This can be as simple as asking your friends to share a Facebook post with information that refers them to your page or website. Word of mouth is still important and incredibly effective.
  2. Start Where You Are
    Immediately running an expensive ad right out of the gate may not be the most effective use of your (likely) limited funds. Use the resources you do have to your advantage – especially if you’re just testing things out to see how the side hustle goes in the real world. You can do this by creating a simple, informational landing page for a small fee. Or, if you’re not looking to put any money into it right away, create an enticing email signature that explains what you do in a concise and eye-catching way. Check out these tools to create a kickin’ email signature.
  3. Gather Positive Reviews
    If you’ve performed a service or sold a product, ask your customers to write a review on the experience. Never underestimate how many potential customers read reviews before choosing where to spend their money, so this is an incredibly important asset. Once a service is completed or a product is sold, send a thank you note to your customer and kindly ask them to write a review. Be sure to provide them with links to easily drop a line on Yelp or your company’s Facebook page.
  4. Be Strategic With Social
    It’s common to think that you have to have a presence on all channels right away. Start smaller. Think about your demographic and do some research on which platforms reach that demographic most effectively. From there, put your time and energy into building a presence on one or two channels. Post consistently and engage with followers. After you’ve developed a solid following, you can then expand to other platforms.
  5. Give Paid Marketing A Shot
    Once you’ve made a dollar or two, try experimenting with some Facebook or Twitter ads. They’re relatively cheap to run and can attract people you may not have otherwise had a chance to reach out to. Again, the key is to start small and don’t get discouraged if these don’t have people knocking your door down; it may take trial and error to create the perfect ad for your hustle.
  6. Go Local
    Local newspapers and magazines are always looking for news on what local residents are doing. Send an email to your town/city’s journal or local Patch affiliate. Let them know what you’re up to, offer yourself for an interview, and give enticing information. The key is doing this in a way that your hustle is seen as beneficial to the public, and is not just an ad.

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