Meanwhile, PayPal acquires mobile payments firm Paydient.
Online retailers don’t have to reinvent the reel to build successful online video programs.
Video sharing web site YouTube.com is popular. Very popular. Every minute, 20 hours of video is uploaded to YouTube.com, according to the network, and YouTube surpassed 100 million users just in the U.S. last year, according to comScore Inc.
Marketers have flocked to YouTube as a way to get their videos in front of those millions of consumers. But with a dizzying amount of videos, channels and categories, it’s difficult to stand out on YouTube.
So e-retailer BeautyChoice.com got creative when it decided to use YouTube to get its name out. Rather than slapping up a slew of videos and creating yet another channel to house its creations, the retailer of make-up and beauty products teamed with beauty pros and bloggers who already had a following on the network, says Jordan Blum, president of the beauty products retailer.
“We identified people who were already doing online tutorial videos and who were popular on YouTube and told them we would pay them to create videos using our products and mentioning our name,” Blum says.
BeautyChoice.com started its YouTube program about a year and a half ago and pays its team of about 40 pros, mostly make-up artists or beauty bloggers, in part based on the number of subscribers they have to their YouTube Channels. The top expert has about 250,000 subscribers, Blum says.
The approach is working. The e-retailer, which attracts about 200,000 unique visitors per month to its web site, says about 60% of its traffic and 65% of its sales come from the YouTube initiative.
Those results demonstrate how the explosion of video on the web offers new opportunities for retailers-and new sources of online video expertise and content. Just as beauty professionals have become adept at producing web video in response to the YouTube craze, so, too, have manufacturers turned out more video to promote their products online, and that content represents more video that retailers can use and customize to their needs. And vendors are coming out with new video technology that can be adapted to online retailing.
Grab your popcorn
Retailers are adding video to their sites in response to the overwhelming consumer adoption of online video. Nearly 178 million U.S. Internet users watched 33.2 billion online videos in December compared to 158 million U.S. Internet users who viewed 21.4 billion videos in July.
For BeautyChoice, the 2,300 videos it’s posted to YouTube have had an instant impact.
On the day a BeautyChoice YouTube video launches, Blum says his e-commerce site will attract as many as 15,000 unique visitors. He’s convinced it’s because the beauty pros featured in those clips are well known.
“The fundamental mistake retailers make is thinking ‘I’ll create my own video, put it on YouTube and I will be a huge success.’ You have to establish a relationship with the people the YouTube community already trusts,” Blum says. “You’re not going to launch a video on YouTube as a retailer and automatically get 100,000 views.”
Nor does the video have to be TV-quality to be effective, he adds. The make-up artists and bloggers BeautyChoice works with often shoot videos in their own bathrooms with conventional camcorders. Blum believes a girl next door showing how she can transform herself is more approachable and believable than a professional makeover video with perfect lighting in a state-of-the-art-production studio.
The proof is in the views. BeautyChoice.com expert Michelle Phan, for example, created a homemade beauty tutorial video on how to create a look modeled after the high-profile pop singer Lady Gaga.
“I got this wig from BeautyChoice.com,” Phan says as she affixes it to her head and the BeautyChoice.com URL appears in text on the video. The tutorial, added to YouTube last May, has been viewed 13 million times, reeling in 2.5 million views in its first month, Blum says.
And there’s an added bonus. Copycat productions. Popular videos prompt other consumers to create their own videos with similar themes, and those also link back to the BeautyChoice site, Blum says.
Blum won’t say what the video program costs, or put a dollar figure to BeautyChoice.com’s web sales. But he says the e-retailer spent about 7% of its annual revenue on its video initiative in 2009 and expects to spend closer to 10% this year. The e-retailer not only pays the beauty experts for creating videos, it also pays them a commission on sales that come from those YouTube clicks.
While 7% represents a big chunk of revenue, BeautyChoice, which launched its e-commerce site in November 2007, has made back its investment in its YouTube program many times over, Blum says. “Sales from our YouTube campaigns have significantly increased our sales. Our online sales were up over 40% last year.”
And there’s another positive economic side to the YouTube initiative: With traffic to his site more than four times what it was before YouTube, Blum has been able to cut his monthly Google AdWords paid search budget from $20,000 to less than $2,000. “Other than the videos we really don’t do any advertising,” Blum says.
Like BeautyChoice.com, medical equipment retailer SpinLife.com wanted to leverage online videos without blowing its entire marketing budget on video production costs. It felt it would benefit from videos that show the features of its complex and expensive equipment such as mobility scooters, lift chairs and wheelchair ramps that can cost as much as $3,000.
SpinLife.com found a cost-effective solution by tweaking product videos it receives for free from manufacturers, says Jen Walsh, vice president of marketing for SpinLife. Before, SpinLife used to provide a link to a manufacturer’s video on product pages, but that would lead shoppers away from SpinLife.com. Plus, Walsh says many manufacturer videos featured poor lighting, outdated graphics and cheesy music.
Walsh and her team today take manufacturer videos and edit them in-house using Adobe Premier software. They add an introduction shot with the SpinLife URL and phone number, remove any manufacturer information such as pricing relevant only to retailers and edit sound quality. After editing for about a half hour, SpinLife uses Fliqz to host the videos.