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Apr 07, 2009

New Chart: Marketers Disclose Viral Video Costs

SUMMARY: We asked more than 1,000 marketers who are actively using video in their efforts about their campaigns. Viral video is a hot topic, since the promise of free distribution is a tempting one.

Find out what we learned about the relationship between their budgets and campaigns' success.
Creative Cost for Viral Video Production
View Chart Online
Click here to see larger, printable version of this chart

With bought media, the success or failure of any one creative execution is often not obvious, since success metrics must be extrapolated from sales, conversions, or other actions that are separate from viewing, and are difficult to tie back to unique TV ad exposures.

With viral media, however, the simple act of being passed on from one person to the next can be factored in as a judge of success. Using that yardstick, one can quickly assert whether a particular video is thriving or not.

We took at look at many of the different factors that go into the creation of a viral video in order to contrast the successes and the failures. One of the most interesting conclusions we came to is the discovery that the majority of successful executions were made on low budgets by TV commercial standards, but large budgets by typical DIY viral-video costs.

When media budgets are tight, it’s always a good idea to determine how much to budget for creative expenses on a viral video shoot; also, it’s important to know what you’re up against. While a small percentage of viral video makers shoot the moon and spend upwards of $100,000 on production, this huge gamble often does not pay off.

That said, the Internet is awash with poorly produced videos. At the very least, spend the money for a professional video producer who knows the ropes of online video and can produce something palatable, even if the rest of the video is on a strictly amateur budget. From a risk-and-return point of view, a small gamble can have massive payoffs, but one that’s too little or too large can cause you to lose.

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More Research Data from Sherpa:

2009 Social Media & PR Benchmark Guide

See Also:

Comments about this Article

Apr 07, 2009 - Tracie of Sophos says:
Hi there - To what does the bar chart refer to on the X axis/horizontal? % of what?

Apr 08, 2009 - Tim McAtee of MarketingSherpa says:
Tracie, the percentages are calculated by dividing into the total respondents that answered this question in our survey. In this case, that base was all marketers who had created one or more viral videos in the year prior.

Apr 09, 2009 - Wade Tibke of Tableau Software says:
Interesting chart, Tim. We’ve been discussing video and the investment it might take. My big concerns are making it brand appropriate and integrating it into a larger strategy. So I was surprised that 42% of viral videos are being produced for under $500. What was the BtoB versus BtoC breakdown on that? Also you mention that “While a small percentage of viral video makers shoot the moon and spend upwards of $100,000 on production, this huge gamble often does not pay off.” Did you collect their perceived video success (or metrics) and compare against the cost? Perhaps there is a sweet spot that we cannot see in this chart.

Apr 13, 2009 - Tim McAtee of MarketingSherpa says:
Very perceptive, Wade. This chart comes from our Marketing With Video Report, in which we do break out the numbers by vertical, by B2B vs. B2C, and we cross-tab cost vs. perceived success. The point of the post was really that viral video is a gamble, and knowing what others are betting is a smart place to start from. Throwing money at a project doesn't guarantee creative success, but a low-cost video generally looks like what it is.

Apr 13, 2009 - Russ Josephs of eMarketer says:
Hey Tim. This is great. One quick question: What's the geography? US or Worldwide? Thanks!

Apr 14, 2009 - Tim McAtee of MarketingSherpa says:
Russ, the sample is US only in this instance.

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