online video for retailers
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Online Video Drives Conversion and Traffic While Reducing Returns and Service CostsTRANSCRIPT
WATCH THIS! The Online Retailer’s Guide to Video Merchandising Success
• Introduction
• Why Video Matters More than Ever to Online Retailers
• Research Results
• Beyond Merchandising: Solving the Video Problem
• Summary
• Talk to Us
• About Invodo
• References
Contents
Why Video Matters More than Ever to Online Retailers
IntroductionWe’re pleased to present the results of our research on how online retailers can get the biggest impact from
their video merchandising. We analyzed data on how video was performing on fifty-three of our customers’
websites, with an average of 138 products with video per site. That works out to 7,314 product pages sampled
in this data. To our knowledge, that’s the largest sample size in any eCommerce video study to date. The
results give you, the online retailer, insight into how to merchandise your videos online for the greatest possible
impact. We’ve detailed our findings and condensed them into a set of actionable recommendations.
But first let’s review some tasty third-party statistics to remind ourselves of why we should care. Comscore
reports that as of the end of 2009, nearly 85% of the US online audience viewed online video, with the average
viewer watching 12.2 hours of video during the month of November1. Those numbers show the rapid shift from
the first screen, the television, to the second screen, the computer. Mobile – the third screen – is coming up fast.
And the fourth screen, out-of-home digital, will likely rely on video as a core element.
Internet Retailer and eMarketer surveys both report that many online retailers are adding video to their web-
sites, with video being one of two top priorities. Reduced returns, reduced cart abandons, and increased sales
are the clear benefits2, along with SEO impact that Forrester quantifies as increasing the chance of a front-
page Google result by 53x3. That led 43% of retailers to plan to add video at the start of 20094, and that number
is now over 64%5 as of January 2010. The increase in sales is especially compelling since numerous sources have
documented conversion rate increases of 30% or more6,7.
30% Increased Conversion Rate
Increased Sales Reduced Returns Reduced Cart Abandons
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Let’s do the following quick math to show why that matters. Assume you get 500,000 visits per month, each one
viewing two product pages. If you currently convert at 3% with a $100 average transaction, you have
$3,000,000 in monthly sales. A 30% increase in conversion would bring your conversion rate to 3.9% and add
$900,000 in monthly sales. That’s a compelling case for adding video – even before benefits in terms of SEO,
decreased returns and cart abandons, and enhanced customer experience are factored in.
Visits per Month 500,000
Product Page Views per Month 1,000,000
Number of Transactions 30,000
Monthly Sales $3,000,000
Product Page Views per Visit 2
Conversion Rate 3%
Average Ticket $100
Conversion Rate Increase 30%
Additonal Transactions 9,000
Business Impact of Video
New Conversion Rate 3.9%
Incremental Monthly Sales $900,000
Current Business
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
Research ResultsThe key metric here is View Through Rate (VTR). Expressed as a percentage, VTR is the ratio of Views (videos
watched) to Impressions (video players served to web pages). To make it very simple, a 25% VTR means
that, if the player was served 100 times, the end user chose to view at least a portion of the video 25 of
those times.
We reviewed video VTR data for a three-month period from fifty-three of our online retailer customers
covering a range of verticals including home décor, sporting goods, music, toys and consumer electronics.
The customer size ranged from small retailers to Internet 50 powerhouses, and the time period covered
November 2009 – January 2010. The average retailer had 138 product pages with video, so 7,314 product
pages are represented in this data set, as we mentioned in the introduction. That’s enough data to claim
significance and breadth across categories, making these results broadly applicable and, we hope, useful
to the online retail community.
The VTR in the sample ranged from 5% to almost 70%, with a weighted average of around 22%. (We threw
out a few outliers, notably pages with only a few impressions where the VTR was 100%, to avoid skewing the
results). The research question we asked ourselves was this: How can an online retailer maximize View
Through Rate? We tested four hypotheses and found the following results.
View Volume and View Through Rate
80%
70%
60%
50%
40%
30%
20%
10%
0%
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA BB CC DD EE FF
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
(Customer)
Views Total VTR
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Actionable Recommendation: Focus on premier placement for your videos
and get them above the fold whenever possible. If you can’t get them
above the fold, use merchandising tools like icons and image overlays to call
attention to your videos.
The concept of “Above the fold” originates in
the newspaper industry and refers to the choicest
location on the front page – visible even when
the newspaper is folded in half and displayed face
up on the newsstand. In web design, the term
refers to the portions of a webpage that are visible
without scrolling. Of course, the exact location
of the “fold” differs based on browser and monitor
resolution. We went with the OneStat.com
recommendation that assumes users have their
resolution set to 1024 x 768 pixels, since that
accounts for 54% of Internet users.
Not surprisingly, this proved true. The player achieved an average VTR of 25.7% above the fold – almost twice
the 15.1% for players below the fold. So treat with skepticism the leading-edge Web theorists who claim that
“the fold doesn’t matter anymore.” To online shoppers, it clearly does. And if you want those online shoppers to
be influenced by your video, the higher on the page you place it, the better off you are.
Further research will focus on the impact of going further and occupying the “hero position” typically reserved
for a still product image on the page. VTR has greatly increased when we’ve placed video here, but we need
further data to confirm that impact. We’ll also watch for changes based on the explosion of mobile commerce,
as above the fold is a completely different proposition on a mobile browser. M-commerce presents new chal-
lenges for the online retailer as well as opening up new opportunities, such as closer integration between
bricks-and-mortar and online stores.
Hypothesis 1:
Placing video above the fold results in
a greater View Through Rate than
video below the fold.
30%
Below the Fold Above the Fold
Placement Impact on VTR
25%
20%
15%
10%
5%
0%
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Actionable Recommendation: Consider carefully the potential impact of
competing clickable elements on a page. Monitor the impact as new
elements are introduced.
Hypothesis 2:
View Through Rate declines with an
increasing number of elements
competing for clicks on the page.
The common-sense rationale is that clicks are a
zero-sum game. The more elements on the page
compete for the click, the less often any one element
will be clicked. We excluded global headers and
footers from this analysis since we believe users are
focused on the center of the page in deciding where
to click unless they are navigating to another part of
the site.0% 5% 10% 15% 20% 25% 30%
Impact of Competing Elements on VTR
21+
1-5
6-10
11-15
15-20
We were pretty attached to this hypothesis and were surprised to be proven wrong – kind of. Video on pages
with 1-5 and 6-10 clickable elements outperforms video on pages with 11-15 and 15-20 clickable elements by
a significant margin. By that standard, fewer places to click equals more video plays. But the big surprise was
a 26.4% VTR for pages with over 21 clickable elements. This finding calls for further research. It’s possible that users react to a crowded and confusing page by
choosing video to help them make sense of all the information. We know that video excels at conveying
complex information in a simple form, so perhaps this explains the behavior. Perhaps the most likely
explanation is that the number of elements on the page is less important than what and where they are on
the page – in which case heat mapping would yield insights.
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
Adding a video with a text call to
action (“Click to play”, Click to view”)
increases View Through Rate.
Hypothesis 3:
No Text CTA Text CTA
Impact of Text Call to Action on VTR
25%
20%
15%
10%
5%
0%
And the theory holds, with VTR of 23.9% with a text CTA versus 21.4% without. With increasing adoption of
online video, the text CTA is probably less important than it used to be, as most viewers understand a ‘Play’
button. This impact is not nearly as striking as the impact when the player is moved above the fold, but
every point of VTR makes a difference.
Just as the salesperson bags
the deal by asking for the
business, the online marketer
increases conversion by
asking for the click. That’s the
theory.
Actionable Recommendation: When possible, include a text call to action
(“click to view” or similar) with the video player.
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
The Invodo Embedded Video Player (IEVP) renders as
480 x 720 pixels on the page. However, it can be
customized by sizing it down when needed. We had
cautioned retailers that rendering it too small might
decrease VTR – but we wanted to run the numbers to
verify or disprove that claim.
The data confirms this hypothesis. The full-sized Invodo Embedded Video Player implementations generated
a VTR of 22.5%, versus 19.0% for implementations scaled down to 250 x 140 pixels. Again, this benefit isn’t as
big as moving the player above the fold, but as a best practice, a larger player (within reason) is better.
We’ll do further research here: is a small player above the fold better than a large player below the fold? It
appears so, as the above the fold upside exceeds the resized-player downside, but a dedicated study on
the topic is needed to resolve the question.
Increasing the size of the video player
increases View Through Rate.
Hypothesis 4:
Reduced Size Full Size
Impact of Resized Player on VTR
25%
20%
15%
10%
5%
0%
Actionable Recommendation: Avoid resizing the player unless it is absolutely
necessary to get an above the fold placement.
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
Beyond Merchandising: Solving the Online Retail Video Problem
By this point you’re likely to agree that video
has clear benefit for an online retailer, and
that merchandising the video wisely as an
integral element of the page maximizes that
benefit. So what else stands in the way of
launching a video program? Unlike many
eCommerce enhancements, adding video
requires three very distinct competencies:
Content, Platform, and Network.
Few online retailers and fewer video provid-
ers are skilled in all three. A brief explanation
of the framework we use with our customers
at Invodo follows.
Reduced Product Returns
Increased Conversion RatesDrive Traffic
Invodo’s three-tiered solution increases traffic and conversion rates while reducing product returns.
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
Network. The more points of distribution for the content, the greater the
benefit. Getting on the product page, where the rubber meets the road in
terms of conversion, is a good start. But a video program adds more benefit
as it is expanded to include other points of consideration. Some likely targets
are category pages and video galleries on your retail site. Optimized
content distributed to social sites, like YouTube and Facebook, adds
incremental views and traffic rather than diluting the impact of the original
unique content. And video content on a mobile platform can meet
consumers wherever they are shopping and even bridge the gap to driving
sales in brick-and-mortar locations.
Platform. How will you host & stream the content across the site? Most video
platforms are not focused on the needs of the online retailer. Many charge
a premium for functionality that’s irrelevant at best and distracting at worst,
given an online retailer’s focus on driving conversion. Self-hosting may not
be the right answer for bandwidth-intensive content like video. Even if the
customer experience and branding were acceptable, do-it-yourself options
like YouTube and Vimeo come with a hidden cost: traffic that is diverted
away from the retail site to YouTube, and cannot be recovered.
Content. Where will you acquire the video content? If it’s from
manufacturers, how will you avoid having to create a ‘content wrangler’
position to manage multiple file formats and keep the content updated
and fresh? If you plan to create your own content or use a video
production company, what type of content will you create? How will you
be sure it is eCommerce-optimized in terms of content, length and
format? How will you create content in a scalable manner? Creating a
few videos is relatively easy. But creating eCommerce-optimized video at
scale is a very different proposition.
All three elements are needed for a successful eCommerce video program. But to
get the most out of it you also need merchandising expertise to ensure your videos
are viewed. The more your videos are viewed, the higher the impact on conversion.
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
Summary
Talk to Us
About Invodo . . . Video that makes a difference
We hope this information is useful to you, and we’d like your comments and
feedback. Share your thoughts by commenting on the Invodo blog at
http://blog.invodo.com/, reach us by email at [email protected] or by
telephone at 1-800-280-4122.
Video has clear benefit to online retailers and that benefit is maximized when the video is merchandised
appropriately. Key elements of that merchandising include keeping valuable content above the fold,
avoiding user confusion from too many options, asking for the click, and keeping elements large enough
to matter. Given its popularity and communication potential, video has a more powerful attraction than
many other elements and can be expected to outperform text, still images and other more traditional
elements. That leads the savvy online marketer to make video an integral element on the page rather
than adding it as an afterthought. Sometimes circumstances force a less-than-optimal placement, in
which case merchandising tools such as icons and image overlays can help increase VTR.
More Questions? Reach us at 512.279.4800 or visit www.invodo.com
Invodo helps businesses sell more through the power of video. The immediacy of video drives conversion
for retailers, consideration for manufacturers, and satisfaction for consumers. Invodo works with Internet
500 retailers and major brands to create eCommerce video that drives traffic, increases conversion rates
and reduces returns. Based in Austin, TX, Invodo is backed by Sevin Rosen and S3 Ventures.
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.
References
1 Comscore, ‘November Sees Number of U.S. Video Views Online Surpass 30 Billion for First
Time on Record’, January 5, 2010
2 eMarketer, ‘Video Usage in eCommerce: The Best is Yet to Come’, January, 2009
3 Forrester Research, “The Easiest Way to a First-Page Ranking on Google”, January 8, 2009
4 Internet Retailer, ‘More Than a Pretty Face’, January, 2009
5 Forrester Research, ‘Online Retailers’ Adoption of Video Content is Ahead of Consumers’
Preferences’, November 5, 2009
6 Practical eCommerce, ‘Video Boosts Online Sales, Merchants Confirm’, November, 2008
7 Internet Retailer, ‘Shoeline.com’s Videos Pay Dividends On and Off Its Site’, January, 2009
More Questions? Reach us at 512.279.4800 or visit www.invodo.com
www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.