As a small business owner you are right. What ROI will I get for my investment? This has to translate into more customers. Not sure how this can be measured by producing a video.
We all see the massive advertising car manufacturers/importers spend on TV but go to their YouTube channels and see how low the viewing numbers are on most of their product and promotional videos.
Just because you have a video it does not have any value unless it is used correctly to drive traffic. Putting a profile video on a Facebook page, having the same video on YouTube or on the current BIG app would drive very little traffic - if any.
Sensis 2016 research of Australian businesses shows small businesses spend, on average, 14% of their TOTAL marketing budget on Social Media marketing. Medium sized businesses 9% and large businesses 5%. Seems like $8k or even $2k for a video is a significant investment for a cafe or a hair salon.
I wonder if the BIG business model and revenues were more transparent how much value there is in the business beyond video production and if they originally listed on ASX as a media company, which they are, and not a Tech company, what the acceptable PE ratio would be?
I read on a post BIG went from a $2.2m t/o and $2.8m cashburn to a $22m t/o the year following the deal with FCC. Prior to that deal it was only a matter of time until the kitty being empty. The fact they mortgaged the farm to FCC is a strong indicator of how crucial BIG management previewed the relationship to be to growth and even survival. Not sure why or how a finance company would consider a library of videos, which in the main, only have value to the specific business owner could be considered as security.
I feel fascinating reading to come over the coming days.
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