How To Budget For Your Video Marketing Campaign

Let's face it, creating a standout video isn't just about flashy visuals and a great soundtrack – it's also about making sure every dollar counts. It's easy to misinterpret how much a great video is going to cost, especially when we sometimes see small budgets make incredible videos and huge budgets miss the mark.

So, we're here to demystify the big budget question: How much do I need to spend on my video marketing campaign?

Let's start by splitting your budget into two categories:

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Production Budget

First, you need to assign a budget for your video. This can vary massively from a solo videographer/editor doing their thing (often between $2-8k) to a full-service video production agency like ours ($15k-100k+) or a large advertising agency that could charge you anywhere between $100k-$1m.

It can be tempting to skimp here - you'll think, "I can write the script and plan out all the props and act in it myself", but if you really want to make an impact and get good share of voice within your market, our strong suggestion is to consider a full-service video production agency that has the expertise to write a crackin' script (that's engaging + impactful) and bring it to life with ease and flair.

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Marketing Budget

This encompasses everything from ad spend, to copywriting, graphic design, implementation and optimisation. If you have an in-house marketing team, you won't need to fork out $$ for a digital marketing agency to create and run your ads. There are obviously pros and cons to each decision, but for now we’ll just focus on ad spend.

A PSA for all our new digital advertisers - you will likely need more ad spend than you think.

There are many different ways to determine a rough budget for your video campaign, and the most important thing is to spend within your means. But how do you decide where to start?

For a smaller budget, it's important to adjust your expectations and strategies accordingly:

• Start Smaller: Begin with a budget you can afford. Use this to gather data, understand your audience better, and improve your ad performance incrementally.
• Focus on High-Value Targets: Concentrate your budget on targeting high-intent or high-value audience segments. This might reduce the volume of 'results' but can improve the quality and ROI.
• Optimise Creatives and Targeting: Continuously test and optimise your ad creatives, copy, and targeting parameters to improve performance. This way, when you go broad with your targeting (and spend more budget), you will already know what works well for your audience.

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If you want to get more scientific, here’s a helpful exercise you can do.

If you're optimising your campaigns for leads, you can calculate ad spend based upon how much you might be willing to spend to secure a lead. Let's say the LTV (lifetime value) of your customer is $5k, you might actually be willing to pay up to 10% ($500) of that to secure the customer. Create a realistic lead figure per month and multiply the dollar figure to get your monthly spend - for example, $5,000 to secure 10 leads using the lead figure above. This also works the other way - if you're only spending $1,000 a month on your ads, don't expect to see a lot of leads coming through! As you go, use the data from your campaigns to educate yourself on what a realistic cost-per-lead looks like for your specific business - it’s different for everyone.

Please note: As a general rule, only use this calculation to determine ad spend for performance marketing campaigns (aka where conversions are the goal) and remember that you likely won't receive your ideal number of monthly leads immediately. If your brand is new to digital marketing, you need to fill the top of your funnel before expecting loads of leads to come your way.

TOP TIP: Did you know that marketing experts recommend up to 50% of your marketing budget should be spent on brand marketing and 50% on performance marketing? The split can vary slightly depending on your business maturity & industry. Performance marketing (AKA marketing focused on short-term sales) secures your low-hanging fruit, but when those people are gone, what are you left with? If you haven't brought new people into your orbit, you've got nothing. And that’s where brand marketing comes in. If this is a confusing concept AND you don't know how to convince your senior leadership team to assign more budget to your campaign, you need to read this article by marketing legend Mark Ritson.

Wrapping it up:

Figuring out your video marketing budget is like trying to find the perfect balance between splurging and saving. Sure, you could DIY your video or go all out with a production agency, but the sweet spot is going to depend on your wider marketing goals. In saying that, don't underestimate the power of a good production team. Yes you could try to script, shoot, and edit your video yourself, but really, the pros know how to make your message pop.

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At the end of the day, it's all about finding what works best for you and your business. Keep experimenting, keep learning, and soon enough, you'll have a killer video marketing campaign that hits all the right notes.