The importance of online video analytics for video commerce
Video commerce is still in its infancy, yet online video is nothing new on the Internet. Unfortunately, many of the metrics historically used for measuring online video do not provide much help to executives seeking a greater understanding of what drives success in a video commerce program. For example, simply looking at bandwidth consumed by your organization’s online videos tells an executive nothing about the traffic the program drives, the sales it produces, the engagement of its viewers, or the relevancy of its content.
In the past, I’ve advocated strongly for using sales generated through video or sales lift attributable to video as the primary metrics by which the success of a video commerce program should be measured. I still believe these two metrics are ultimately what the majority of video commerce professionals care about most. Still, using only those metrics is a woefully inadequate way of assessing video commerce. Since producing video can cost more than producing other media, I would argue it is relatively more important for video commerce professionals to understand the “why” behind video sales performance compared to other online media; knowledge gained can translate directly into cost savings and more ‘bang for the buck’ in ongoing video production efforts.
Understanding the “why” is unfortunately more easily said than done. That’s partially because no standards exist yet for measuring video commerce program performance. The cross-functional nature of video commerce within an organization means that program stakeholders value different metrics. For example, merchandisers and usability experts probably care more about sales lift on site pages and impact on customer experience, while affiliate managers likely care more about incremental traffic and sales originated from click-throughs on video ads placed on affiliate sites. Emerging channel managers probably care more about awareness and traffic driven through video syndication and social network placement, while the CMO might just want to know overall ROI and video’s effect on the top and bottom line.
One of the things I would like for us to tackle in the VCC, in partnership with other organizations, is metrics standardization. When I was in the email industry, I was asked to participate on the Email Measurement Accuracy Coalition led by JupiterResearch analyst David Daniels (before Jupiter was part of Forrester). This effort involved people across the industry on the client and vendor side and was formed because there was no standardization across solution providers for how key metrics were calculated. Unfortunately, by the time the council was formed, a lot of damage had already been done.
We have a unique opportunity in the video commerce industry to avoid a similar fate by banding together at the outset and defining metrics and the proper calculations for those metrics by partnering with industry leaders, academia, and the analyst community – email me at justin [at] video [dash] commerce [dot] org if you are interested in participating in this effort.
The next post will include some initial suggestions for metrics and their calculations, broken down by stakeholder function. Until then…