online video for retailers

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

www.invodo.com | © 2010 Invodo, Inc. All Rights Reserved.

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


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


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%


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.


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.


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.


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.


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.


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.


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
