How to calculate ROI of a video with A/B testing

A blogger recently showed in a post, how to calculate the ROI of a product video by using visitor segmentation. The author defines a segment with visitors that watch the entire product video and another one that doesn’t watch the video at all. For both segments, he calculates average sales per visitor, the break-even point and the ROI.

In my opinion, the ROI should better be calculated by using A/B testing.

Why?

Visitor segments to help us to put all our visitors in certain classes or groups.

With the segmentation we generate knowledge about visitors. In the example of the mentioned blog post we make a statement about visitors who show an interest in product videos, and visitors are not interested in product videos – and their respective willingness to buy.

O.K. we know that visitors who have enough patience, to watch a whole product video, are probably more interested in buying and will cause more revenue than visitors that are not interested in our videos.

Probably we would like to buy traffic with as much interested visitors as possible. Without doubt, this traffic would be more valuable to us than traffic with visitors that show less interest in promotional videos.

By segmenting visitors we learn a lot about visitors and the quality of our traffic.

But we do not know if the video has led to the purchase or whether the visitor would have bought anyway.

So how do we find out whether the product videos actually have a positive impact on the behavior of our visitors?

With testing (A / B tests). This means that show a variant of the shop with videos (experimental group) to one half o the visitors and the other a variant without videos (control group) to the other half of the visitors. Which variant is show to a visitor is purely coincidental.

In both groups of visitors, we collect all relevant information, such as the number of visitors, visits, conversion rate and the order value.

With the data collected on both groups of visitors, we compare the alternatives and we examine whether an investment in product videos makes sense for our business.

Because both groups will have sales, we need to calculate the ROI from the difference in sales.

(Image: berlin-pics / pixelio.de)

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