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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

How to be the best potential employee in your job hunt [INTERVIEW]

(BUSINESS MARKETING) Struggling in the job hunt? You’re not alone – but Nicole Clark, a Senior Professional in HR, has some advice to help you stand apart from the crowd.

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Interviewer writing on clipboard talking to person across a table during their job hunt.

The job hunt is a journey not often enjoyed by the potential employee. It can take a lot of searching, a lot of resume tweaking, and a lot of interviewing, in order to find a good fit. Sometimes, it takes more than that, and you need a little insight from an expert about how to go about the job search. Luckily, we have Senior Professional in Human Relations (SPHR), Nicole Clark, on tap to give us the inside scoop.

Taylor Leddin: What’s the number one thing a HR specialist looks at when reviewing a candidate?
Nicole Clark: When reviewing a candidate’s resume, it’s always imperative to ensure they have the fundamental skills needed in a position. When I move forward with conducting a phone screen or in person interview, it’s always important to ensure they’re a good fit from a cultural standpoint. Every company has its own unique culture and it’s important for hires to fit that culture otherwise it will eventually lead to issues down the line. With that being said, every candidate has their own personality and unique traits that they will bring to the role. However, the best hires are those that are able to make strong individual contributions while also working well within a team setting, which is why cultural fit ends up playing such an important role.

TL: What’s your biggest pet peeve with the job application process?
NC: My personal pet peeve is when candidates are not honest about their salary expectations during the beginning stages of the interview process. It’s frustrating when a candidate is in the final stages of an offer being made and they suddenly have high earning expectations that are not aligned with the company’s salary structure. I do not at all mind when candidates negotiate and are aware of their worth, but it’s a different story when all of the sudden candidates are asking for way more money than what we initially discussed. It’s important for candidates to be honest throughout the process about their expectations to ensure everyone is on the same page.

I also find it disheartening when candidates are only focused on the benefits and perks of the position as opposed to their job responsibilities. I understand that benefits are important, but it’s a red flag when candidates are asking me about how many days off they are going to receive during the initial phone screen. It makes me question candidates’ work ethic and also their priorities. I enjoy taking time off too, but those benefits will be discussed when the timing is appropriate, so it’s best to let the company lead that discussion when the timing is right.

TL: What advice do you have for people currently on the job hunt?
NC: Searching for a job is not easy and it can be a very demoralizing process. I think it’s important to not limit yourself during the initial application process. When I was job searching, I would apply to as many jobs as possible even if they did not appear to be “perfect” on paper. Every interview you have is good practice and allows you to better understand what exactly you are looking for in a position. Also, it’s important to remember that there is no “perfect” job! Every job is going to have downsides, but the best jobs are those where you enjoy both the work and the people who you are working with.

TL: Since you’ve been on both sides of the interview table, what would you say is the most important thing about interviewing?
NC: To me, the most important thing about interviewing is to be yourself and to remember that you’re interviewing the company too. While they are looking for the best person for the role, you’re also looking for the best position for the next step of your career. It’s important to ask questions and really understand the role that you’re going to have in the company. While it’s completely understandable to be nervous during the job hunt, it’s important to remember that they want to find the best person for the position and for them to do so, they need to really meet the real you.

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Business Marketing

How becoming better listeners eliminates our culture’s growing isolation

(BUSINESS MARKETING) We have all be frustrated by someone who doesn’t listen to us; so why not make sure that you are taking the steps to not be them, and be better listeners.

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good listeners breed good listeners

We all want the same thing: to be heard. In this digital age, we’ve created an endless stream of cries for attention via comment sections, forums, and social media feeds—shares, retweets, tags, videos, articles, and photos. Worse, our words echo in our digital bubbles or specific communities, doing nothing but making us lonely and isolated. However, in the midst of a divided political climate, we can all stand to strengthen our ability to listen.

Me? A bad listener? What are you trying to say? I got enough flaws to worry about and don’t wanna hear about another skill to improve. Oh, the irony.

“Bad listeners are not necessarily bad people,” assures Kate Murphy in her new book You’re Not Listening. “Anyone can get good at it. The more people you talk to, the better your gut instinct. You’re able to pick up those little cues. Without them, you’re not going to get the full context and nuance of the conversation,” she says in an interview with The Guardian’s Stephen Moss.

Our bad listening aside, we can all remember a time when we weren’t treated with the attention we craved. Moments where you’d do anything for the person you’re conversing with to give a sign of understanding—of empathy—to validate our feelings, to acknowledge the vulnerable piece of ourselves we’ve entrusted to them is cared for. Nothing is worse when we’re met with blank expressions and dismissive gestures or words. These interactions make us feel small and lonely. And the damage can stay with us.

So what can we do to ensure we’re the listeners we’ve always wanted from others? Being a good listener does take time, energy, and tons of practice. There are easy tips to keep in mind:

  1. Show you care by making eye contact and putting away your phone.
  2. Patience. Everyone opens up on their time.
  3. Ask open-ended questions. Yes/no responses inhibit the flow of conversation.
  4. Repeat what you’ve heard. This clarifies any misunderstanding and validates the speaker.
  5. Give space. Let the conversation breathe—silent pauses are healthy.

By becoming better listeners, we show care. We become curious about and empathetic towards others, leaving our bubbles—we become a little less lonely.

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Business Marketing

Audio branding: Is this the next big boost in brand recognition?

(BUSINESS MARKETING) Brands have invested heavily in audio branding in 2021, here’s how that is changing up the branding rankings for businesses.

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Person at audio mixing table, preparing audio branding

Media consumption and engagement with brands across digital platforms is increasing, according to sonic branding agency amp; and companies investing in audio branding are creating a significant competitive advantage. The Best Audio Brands (BAB) index created by amp uses 5 key criteria to measure audio investment performance: Customer recognition, customer trust, customer experience, customer engagement and customer belonging. The agency claims that companies investing in high quality audio assets for their brands have gained ground by establishing a recognizable audio identity.

Michele Arenese, amp CEO said, “Making a brand heard is more important than ever before. The past 18 months have accelerated the importance of sound and voice as vital elements of the brand identity and customer experience toolbox. Meaningful and purposeful brand communication takes advantage from a ownable and authentic sound ecosystem.”

For the second consecutive year, Mastercard ranked highly across all key criteria measured by the BAB and topped the list. Other brands that fared well on this year’s index were Netflix, which moved up 27 places by using it’s famous “ta-dum” more widely and Coca-Cola which collaborated with Tyler the Creator and invested more in bespoke music. In addition, 5 new brands to make the top 10 this year were Audi, Mercedes, Netflix, Hyundai and Siemens. The highest climbing brands were in the financial sector: HSBC, American Express and J.P. Morgan. The highest climbing sector, however, was beverages followed by automotive. Brands that dropped in the rankings this year were Google, Amazon, Colgate, Goldman Sachs, and Danone.

Björn Thorleifsson, Head of Strategy & Research, amp said: “This year has shown that those who were already embarking on their sonic branding journeys have increased their lead on trailing rivals – now clearly falling behind. Given the evolving ability of sound to reach consumers whatever the device or channel they’re on, we expect to see increased investment from brands looking to stand out amongst the online noise. There are already best practice examples from leaders, such as Mastercard, and we’d encourage those who want to improve brand recognition and even performance, to adopt a little less conversation on sonic branding, and a little more action.”

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