Strategies to lower the cost of producing video for e-commerce: new ideas, tips & tricks for sourcing video commerce content


Hi everyone,

Just finished recording episode 2 of VCC TV last night.  I developed this in response to the VCC members only forum poll we ran in January where VCC members indicated unproven ROI, high cost of production, and lack of perceived value were among the top challenges facing video commerce in e-commerce organizations.  The content here goes into considerable depth (21 minutes), so you may want to split it up into two viewing segments.  In a nutshell, this episode of VCC TV covers the following:

- Reviews six sources of video commerce content

- Outlines the benefits and drawabacks of each e-commerce video source

- Describes cost saving strategies for each of the six video sources

Let me know what you think… Happy Selling!

Transcript:

Welcome to VCC TV. Today, we’re focusing on how to cut cost out of e-commerce video production and video sourcing while still preserving – or perhaps even enhancing – the revenue side – in order to improve the business case for video commerce.

Now, why would we focus on this topic?

In a recent VCC member survey,  members were asked to identify challenges facing video commerce within their organization.  Among the top answers, members cited unproven ROI and lack of perceived value.  The cost to produce video content was another top challenge.  So, this episode of VCC TV is made in direct response to the concerns of VCC members.  I hope you like it!

Here’s how we’re going to break this out.  We’re first going to first focus on the potential SOURCES of eCommerce video content.  Then, we’ll look at the benefits and drawbacks of each production source, and finally, examine ways to reduce the cost of video for each possible production source. At the end, I hope you’ll have a better idea of how, or if, each content source might plays a role in your organization’s
video commerce strategy, plus have some new ideas to help cut some of the costs out of video production and sourcing.

OK – onto the production sources.

The first three sources of eCommerce video content are easily the most widespread and commonly recognized today.  The first way to source video is to…produce it yourself.  I usually don’t split hairs about whether you’re doing the production in-house or using a production shop or agency.  The point is that you are producing original ecommerce video content for use by your organization.  It could be how-to, educational, promotional, entertainment, commertainment, whatever – as long as you’re making it, and as long as you’re using it for ecommerce, then it’s self-produced ecommerce video.

The next way to get video content is to acquire it from the manufacturers that supply your company with the goods you sell on your e-commerce site.  Typically only specialty retailers or mass merchants can acquire video content this way, while private label retailers tend to gravitate more toward self-production.

The last traditional source of video content is to acquire it from customers or shoppers on your web site.  This type of video content is most often product video reviews, although it could also be how-to content, entertainment content, or even promotional content.

The next three sources of content are newer and not used widely today in the retail space – but we’ll examine them here more closely because of their potential to reduce costs and accelerate ecommerce video content production for online retailers.  Sound interesting?      OK – so the first non-traditional source of content is what I’ll refer to as “web discovered” content.  This is ecommerce video content that’s already been produced – doesn’t matter by who – could be a consumer, semi-professional, or full-blown professional shop.  The point here is that your organization “discovers” the content on the web – either manually or through the use of ecommerce video discovery technology, then works with the producer to license and distribute the video content
for use on or off your e-commerce site.

The next emerging source of ecommerce video content is what I’ll call “crowd sourced” video.  With crowd sourced video, ecommerce merchants essentially issue a creative brief to a community of video producers and offer a reward for whoever produces the ecommerce video the retailer ultimately uses.

The last emerging source of ecommerce video content is what I’ll term “artificial” video, for lack of a better term.  Artificial video isn’t really video at all, but rather it’s more like a slide show of successive product images or other ecommerce content playing to a soundtrack and voiceover describing products you sell on your site.  This type of video content can be created dynamically by technology using existing product thumbnails and descriptions of your products on your site, but most often production of this content would include some human element to perform the voiceovers, customize scripts, and edit the content prior to publishing.

So now we’ve gone over six sources of ecommerce video content.  Now we’ll briefly touch on some of the advantages and drawbacks of each approach.

For content that is self-produced, the advantages often include added control over the production quality and content, branding, greater control over the production resources themselves (staff), potentially higher resource availability, faster time to market for custom video content, and working with a partner or employee that understands your organization and its needs intimately.  One of the main drawbacks of the self-production approach is that – in general – this is – by far – the
most expensive way to produce ecommerce video content.  From contractor fees, paying staff salaries, video equipment, post-production, opportunity cost from diverting internal resources from other revenue-generating areas of the business, supporting an infrastructure for self-producing video content may require executive level approval and the commitment to outlay potentially sizable ongoing resources and budget to develop ecommerce video content.

For content that is acquired from manufacturers, a huge benefit is that content is generally available for free.  Product manufacturers are actually often eager to let retail partners use their self-produced video content as a way to better merchandise their products on ecommerce sites.  In fact, companies called “content syndication networks” focus on producing video content for manufacturers and then syndicate that content to a number of retail sites.  Other retailers acquire video content directly from manufacturers, or use eCommerce Video Exchanges to acquire pre-uploaded supplier videos directly.  Despite the free price tag and potential to access a lot of content quickly, there are also disadvantages of supplier video content.  First, since manufacturer videos are generally paid for and produced by the manufacturer or a company paid by the manufacturer, maintaining a single brand voice across all an e-commerce merchant’s video assets is challenging.  Editing the content may require a retailer apply editing resources.  Also – depending on the way content is acquired, it may also require maintaining several relationships with content syndication networks, none of which work for your organization but rather for the product manufacturers.  In addition, video content acquired using syndication networks generally only covers a very small percentage of products for sale on an e-commerce site, which leaves a lot of the potential for video commerce on the table.  Video exchanges can help solve this problem to some extent, but may require some work on the part of your buying or merchandising team to obtain video content directly from manufacturers.

Acquiring content from customers and shoppers carries several advantages.  First, it requires no outlay in production costs.  Next, customer-produced content focused on product reviews can add credibility and a new human dimension to your web site.  Having the courage to display video reviews can help build loyalty and trust over the long haul, and potentially also carries some SEO benefit depending on how you deploy.  A main drawback to acquiring video from customers is that – like it or not – most of your customers aren’t going to create videos for your use unless you’re offering something in return.  It could be an entry into a contest, discount on the next purchase, or some other kind of special offer.

Now let’s take a look at some advantages and drawbacks of the emerging sources of video content, starting with web discovered videos.

Web discovered videos carry the huge advantage that the videos have already been produced.  Technology now exists that will automatically discover ecommerce video content over video sharing services relevant to the products you sell on your site.  There are however several drawbacks to web discovered ecommerce videos.  First, the quality of product video results can be highly variable, both in terms of the “true” relevance and production quality.  Some videos will be relevant, while others won’t be as relevant, so you may need to sift through some of the results to create more refined product video matches.  The next challenge with web discovered ecommerce video is in the rights management piece.  Just because you discovered a product video online and it’s freely available over a video sharing service doesn’t mean you can use it for free.  Try to remember that video sharing is all fun and games until someone starts making money from the content – at that point, lawyers have a funny way of wanting to get involved – so you need to have a solid video content licensing strategy in place to truly be successful with web discovery as a viable means of sourcing ecommerce video content.

The next emerging source of e-commerce video content is to source it “through the crowd” using crowdsource ecommerce video services.  The important rule of thumb when it comes to crowdsourced video content is that there is no such thing as a free lunch.  Just because there may be dozens of videographers, amateurs and professionals alike all eager to compete to produce video content you can use doesn’t mean people like to work for free.  With crowdsourced video – in general – the more you pay, the better quality content you’ll get from the crowd.  Crowdsourcing content can also become an excellent way to develop longer term relationships with specific video producers that deliver an exceptional quality product.  Some drawbacks of crowdsourced discovery: first, the quality you get back can vary – dramatically.  While you provide the community with a creative brief, you’ll probably be surprised with some of the submissions you get – and not always pleasantly so.  Next, if you’re constantly sourcing videos from the crowd, it can be harder to develop a consistent brand voice even if it’s spelled out in your briefs.  Last, when you rely on crowdsourcing, you’ll have to consider the terms offered by the crowdsourcing service.  Some may offer to source X number of videos for each brief you submit, and if the crowdsource service can generate enough submissions from the crowd, you may have to pick a winner and pay up regardless of whether you like the videos or not.  So make sure to read the fine print.

Last, there’s artificial video content.  To be honest, I hesitated adding this source because it’s not “really” video, but because the video content problem is such a pressing one when it comes to video commerce, I’m betting some e-commerce companies will turn to this content source as a way to cut video production costs.  And that can be one of the biggest drivers to use artificial video – lower costs.  There are no models to worry about, potentially little or no script customization, no worries about lighting or audio setup – and you can crank out a lot of content – fast.  The main disadvantage of artificial videos are first: it’s not really video – though the richer experience offered may still boost conversion rates and site traffic – but since it’s not really video content, you can lose some of the persuasive power of video and the ability to put a “face” on your company by using this kind of content.  The next disadvantage is quality, which I’d argue is universally low right now, even when compared to low quality user generated content.  You’re essentially using your existing product photos, showing them to a soundtrack, and layering in some overlays on pricing and availability, maybe some specs or part of the product description.  It might just be me, but I think it can be kinda cheesy.  Time is going to tell on this one.

So we’ve now gone over some high level advantages and drawbacks.  Let’s get onto ways to reduce costs from each video source.

The first source of video content is self-produced content.  What are the costs?  First, there is the equipment you’ll need.  Cameras, lighting, set materials, audio equipment, video editing software, perhaps some new computer gear, and – often most expensive – the production staff.  Production staff
could be as simple as a ‘one man show’ that handles all the setup of any set, lighting, audio setup, licensing, scriptwriting , video shooting, post-production, maybe even some technology components – uploading videos to your site, distributing your content and whatnot – and, yes, possibly even serving as the on-screen talent.  More often however, the most basic setup will require a one-man show work with separate talent – either an employee or hired talent for the shoot. A more elaborate setup can up the cost for human production staff.  Instead of a one-man show, maybe you have a videographer, scriptwriter, paid on-screen talent, someone to handle post-production, and some dedicated IT staffers to piece together a basic video commerce solution.  Any time human elements are added to the picture, the cost of production goes up – and depending on the quality of video production
you require, the costs can escalate rapidly.  In short, if you’re self-producing your videos, then you are either committing to variable costs for contract help, or fixed costs for FTEs or vendors providing service under a retainer.

So here are some tips for cutting costs:

1) If you’re going to self-produce video, Work with people that know what they’re doing or at least work with people that are really fast learners.  I have to tell you from first hand experience, video production is NOT easy if you’re approaching it like a pro, or even a pro amateur.  Dealing with lighting,
editing, and audio setup can be especially tricky.  People that don’t know what they’re doing take longer, which wastes your scarce time and, especially if you’re committing to fixed costs, that lowers your productivity.

2) Maintain an ruthless focus on production process, and give your videographer the ability to veto some “marketing” or “merchandising” decisions in the name of increased efficiency… or at least make sure your marketing and merchandising staff are educated about the resources that go into video
production.

Here are some concrete examples of ways you can streamline.  Rather than asking your videographer for 10 different backdrops for 10 product shoots, settle on one.  Rather than require 10 different models to showcase apparel you sell, settle for a couple.  Rather than have the videographer shoot

in multiple locations, settle for one or two.  Rather than shoot every product from different angles, focus on the most important ones.  You get the idea.  The more customization you require from your production staff, the more time they will need to set things up and make things look right.  This isn’t just a question of incremental time needed.  In many cases, you’ll exponentially increase the amount of time required to shoot your ecommerce videos, which can dramatically lower the number of video assets you’re able to produce and use, and place additional pressure on the assets you do produce to pay for the entire program… in short, the fewer videos you produce, the fewer ways you can hedge your bets in case one or two don’t work out as intended.

One last word on this one… just in case I wasn’t clear enough on it earlier.  Professional videography is darned hard.  Any hack with a webcam can create video content, but if you’re extremely demanding of your production quality, expect to pay the price for it.  Given the faltering economy and your
limited resources, and the business needs, you may need to get a little creative in order to strike the right balance.

3) Have a little bit of business-savvy when it comes to prioritizing your video production.  Remember that it likely costs the same amount to produce a video asset that sells zero units as it does to create a video asset that sells a million units.  Do the math and decide where you should apply your scarce production resources first.  If you’re concerned about ROI, then apply your limited resources to the most profitable products from a revenue point-of-view first.  The CFO will love you.

4) Rely on metrics.  It’s easy to derail any online marketing program that plays it fast and loose with metrics and video commerce is no different.  If you’re deploying video on your product pages, run A/B or multivariate tests on the pages to observe the lift (or depression) created by video.  Test video
placement, player size, player treatment, and other elements to make sure you’ve optimized the presentation and customer experience.  If you’re distributing your video off-site to channels like YouTube, Twitter, email campaigns, over your affiliate network, or through social networks, in this economy you’d be smart to track how that’s actually helping your business – results should be communicated to executives in a language they understand.  Is the CMO interested in revenue?  Then communicate the results that way.  Traffic?  Then communicate the results that way.  You get the idea.

The next source of video content is to acquire it directly from manufacturers of products sold on your web site.  Costs for acquiring content in this manner are often limited to applying some minimal IT resources if you’re going to be deploying video on your site; often a line of Javascript must be embedded on the pages where content is to be served.  Then, some retailers may want to customize the content, for example to remove text in stock manufacturer video footage, or to add retailer-specific branding to the content featured at the conclusion of the video – also referred to as “post-roll content.”  So, there may be some video editing costs and management costs for the back-and-forth time you take in working with your vendors to get permission to edit their content (and yes, many will need to grant permission, so it’s best to check if you’re not sure about it).

So, what are some ways you can cut costs for manufacturer-sourced content?  The areas where you can cut costs may come chiefly from editing content you get so it more closely fits your brand voice.  One way to cut these costs is to see if you can get your supplier to do the editing work for you.  Some may be happy to oblige, but you’ll never know unless you ask.  The other cost involved here are the IT resources you’ll need to get video on your site or distribute the content.  In the case of video content acquired through e-commerce video exchanges or retail content syndication networks, the IT overhead may be as small as adding a line of Javascript to pages where the video is to be served.  If your suppliers don’t have their content in an e-commerce video exchange, or don’t work with a content syndication network, then things may begin to get a little more complex on the IT side of the house.  You’ll have to start thinking about things like video hosting, player technology, reporting, dealing with multiple video deployment solutions, and so on and so forth.  While such technology projects may
start small, they CAN quickly grow in size as requirements become more complex.

One other thing I’d like  to point out here – although it’s not directly related to cost cutting but rather revenue generation – is the idea that video content may be produced by any number of your suppliers that do not readily make that content available.  Oftentimes, product manufacturers may be simply unaware that a retail site offers the ability to display video.  Don’t hesitate to contact your suppliers directly to see if they can upload their content to an ecommerce video exchange or a content syndication network so you can access and deploy the video on your site without the need to involve extensive IT resources.  Remember, the more videos on and off your site – the more revenue potential there is for your organization.

OK, so onto the third source of content – customer and shopper uploaded videos.  While the cost to produce these assets is completely the burden of the customer producing the video content, e-commerce companies that are successfully acquiring videos of this nature generally are offering some kind of incentive for the content. To reduce costs, experiment with various offers, discounts, and incentives (if you can) and try to strike the right balance between what you’re giving up and the content you’re getting in return.  Consider also that not all incentives are monetary.  Praise or recognition can be rewards that may also go a long way, depending of course on your business and your customer set.

Next, let’s take a look at cutting costs from web discovered videos.  E- ecommerce video discovery services can return large data sets of ecommerce product videos automatically for your site, but remember that not all the discovered videos are going to fit your needs.  To reduce costs, focus first on discovering videos for your most profitable products from a revenue point of view – and try to acquire whatever content you can for free.  Remember that not all producers will need to be paid, but also remember that when it comes to the level of control and quality of ecommerce video, you often get what you pay for.  In all cases, you should ensure you have the rights to use and distribute discovered ecommerce video content, regardless of whether the content is freely available on the web.  If you’re able to source enough free content and are seeing some results, experiment with setting a budget for discovered ecommerce video and use a service to broker transactions between video producers and your company so you can keep track of your licenses, payments, and optimize or automate the handshake process used to acquire the licenses.

For crowdsourcing, the general rule of thumb is also ‘you get what you pay for.’  To save cost, start with a small budget to see what kind of content you’re able to obtain.  By working with a service that sources videos from the crowd, you can often get a good idea of the kind of monetary outlay you might be looking at in order to source the quality of content you need for your e-commerce site.  Like any other service, you may be able to negotiate terms – use resources like the VCC to network with others to learn about what works and what doesn’t.

Last, for artificial video content, to save cost, start small – with a pilot if you can.  Measure the results and also carefully weigh how artificial video content impacts the customer experience relative to other media – static OR rich.  As with other types of ecommerce video, start with your highest revenue, most profitable items first, as an identical lift produced from artificial video will generate better topline and bottomline numbers when applied to those products.  Depending on your technical capabilities, you may need to partner with an outside company to source content this way, so carefully evaluate the options and make a decision that is in your company’s best interest.

So now we’ve covered six sources of video content, reviewed high level benefits and drawbacks of each source, and shared strategies to lower the cost to produce and acquire content using each source.  I really hope this has been a useful episode and that it gave you some new ideas you can use to put together a stronger business case for video commerce.

Remember that ROI – ultimately – only involves two things – revenue, and cost.  The revenue potential of ecommerce video is now well documented, so an easy way to expand your existing online video efforts or start out a new program is to explore some of the cost savings.  Especially in a down economy, organizations that are able to generate cost savings while delivering new revenues will be better positioned both throughout the downturn, and on the other side of it.

Thanks again for joining me and until next time, Happy Selling!

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