Problem and Hypothesis

  • Who this is for: brand managers, influencer marketing agencies, and performance marketing managers.

  • What’s the takeaway: We've proven and measured the long term returns of a brand integration in a YouTube video. Use our results for your own estimations!

 

At TATAM we are experts in user acquisition via influencer marketing. We take into consideration mainly the lower funnel. Even though we run campaigns through all social media platforms (YouTube, Instagram, Linkedin and TikTok), we generally have a preference for YouTube. On this platform, branded content is usually evergreen and videos continue to bring views and revenue over time, far beyond its upload week. We call this the YouTube Long Tail Effect. Nevertheless, we have always been intrigued by how much: How much does the long tail represent for the integrated brand, in terms of ROI?     

Nowadays, platforms with a 24-hour dynamic (e.g. Instagram and TikTok) are getting around 80% of the global influencer marketing budget. That’s why at TATAM Digital we decided to measure exactly how much YouTube’s lifetime value really represents.

Analysis

In order to achieve this, we made a cohort analysis of one of our client’s campaigns, which has been running for more than 10 consecutive months on YouTube. Our client is a mobile app that works with a subscription model.   

We focused on an audience that consisted mainly of American men and women over 25 years old, interested in professional and personal development, creativity, innovation, and business topics. The campaign consists of sponsoring great YouTubers to promote the app with 90-second integrations in their videos, each one with a custom link to a special offer for their followers. 

The results were taken directly from a tracking tool used by the client, considering the performance attributed to a total of 137 videos—published from the beginning of January 2019 to the end of October 2019—in which the creators talk about the app.

Results

On average, the revenues obtained during the first month made up to ~55% of the total revenue the videos would produce over time. During the next 6 to 8 months, they reached the rest of their lifetime performance: the second month brought ~20% of the total revenues, the third month ~8%, until performance started to slowly decrease.

 

At the end of the cut, 100% was reached. Additional revenues are expected beyond the eighth month, but they should be considered a “marginal contribution.” 

 

At the same time, the average ROI (return of investment) increased 8% month over month, reaching its climax during the eighth month.

Conclusion

Based on this analysis we can affirm that YouTube brand placements generate a lifetime value that doubles the immediate revenue (first month), and reach their total income after eight months. This is the reason why YouTube Influencer campaigns will usually outperform other social platforms where immediacy is privileged, and where there is practically no long tail.

 

YouTube videos continue to obtain views over time and, accordingly, they can: 1) duplicate the first month’s revenue during the following seven months; 2) increase ROI 8% MoM during that period of time. 

Knowing that immediate results are only a fraction of the long tail performance is a key fact when thinking about which products are made to promote through this platform, and also very relevant when planning either a marketing campaign or a marketing strategy.

 

YouTube is the ideal platform to offer an evergreen product, for example, but not the one to promote a 2-day sale. If you identify with this business model and you would like to learn more about it, you can reach us at info@tatam.digital.

Contact us and let us know if you found this paper interesting!

Youtube influencer marketing roi lontail

© 2019 by Tatam Digital Services LLC.

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