Return on Investment
Calculating ROI for a Motion Media Project
Motion media is almost always a cost-effective solution with a sizeable ROI over the tool's lifetime. See the examples below for how this might be calculated.
Example One: Specialty Dental Clinic (>39%)
An established pediatric dentistry office that needs three new patients
monthly to keep its patient load consistent spends almost $300 to
acquire a new patient. One of the major factors in this cost is
informational introductory appointments that are done at no-charge. At
the dentists' normal billing rate, each visit costs $250 plus
additional staff resources. By spending $15,000 on a marketing video
distributed online, patients are more ready to book their first dental
appointment without meeting the dentist first. Because of this, the
booking staff is able to reduce requests for informational appointments
by new patients by 75%. Thus $900 in monthly expense is reduced to
$225, generating an additional $675 of billable hours per month.
Assuming the media tool has a 36-month lifespan and the opportunity
cost of cash is 5 percent, the cost of the video is about $485 per
month. Therefore, the ROI, from just this benefit alone, is 39%.
Example Two: Statewide Non-Profit Organization (>161%)
A state-wide organization headquartered in Richmond, VA represents the
interests of commercial property owners throughout Virginia. The
organization hosts a reception for state legislators where a carefully
designed motion media loop plays in the background restarting every
four minutes. The production cost $18,000. Every 15 seconds, one of
four key messages is emphasized differently each time it repeats. The
average legislator stays for 20 minutes, thus being exposed to each of
the key messages up to twenty times. Because the legislator is only
paying partial attention, he or she may only catch each message three
times. On a key bill which generated an average of $1,500 of tax
savings annually to commercial property owners, a political
communication consultant estimates that the motion media production
represented 2 percent of the reason the bill passed. The association
estimates that commercial owners statewide will save $4.7 Million
during the first two years of the legislation's approval. Therefore the
benefit attributed to the media production is $94,000, or $47,000 per
year. The first year ROI alone is 161 percent.
Example Three: Five-store Retail Operation (65%)
The management of a high-end bakery operation with five retail outlets
conducts a study of the sales effectiveness of its customer service
team. In a small test, the CEO of the company drops by one of the sales
counters for 5-minutes every Friday morning for two months. Adjusted
for the annual increase and seasonality, an analysis shows that the
representatives on duty during the CEO's visit increase their revenue
generation by 3 percent. Each location generates $600,000 a year in
sales, so a 3 percent increase will mean an additional $18,000 in
revenue per location, or $90,000 company-wide. The company hires a
production company to film four messages from the CEO each month which
are then distributed to the stores on Friday mornings and are shown
several times over the weekend to employees starting their first shift
of the week during clock-in. The productions cost $2,500 per month, or
$30,000 per year. The bakery operates at a 55% gross profit percentage,
so the additional gross profit associated with the $90,000 increase in
revenue generated from the investment is $49,500. Therefore, the gross
profit ROI is 65 percent.
This information and these examples are just a start to thinking about
how motion media can boost your organization's ROI. Every project is
different and we can often think of ways that the media investment can
be reconfigured to lower its per use investment cost, thus increasing
the ROI. For example, in the third example above, the CEO's pep talk to
the sales associates could be re-edited quarterly for $500 to become an
e-mailed video message to the company's vendors. If this generated
better payment terms, discounts, or preferential treatment by vendors
another return could be generated for almost no additional investment.
So that we can help you accurately figure your ROI, please contact us.