Introduction
“Are explainer videos profitable?” That’s a great question and one that is commonly asked online.
But here’s the unvarnished truth about explainer videos that most producers won’t tell you: they can be wildly profitable OR catastrophically expensive.And the difference between the two outcomes has nothing to do with luck.
The Hard Math of Explainer Video ROI
Let me give it to you straight: A professionally produced explainer video costs between $3,000 and $15,000 on average. Some go for much more.
Is that a bargain or highway robbery? The answer depends entirely on what happens AFTER you publish it. In other words: are explainer videos profitable? That depends on execution.
Consider two scenarios:
Scenario A: You invest $5,000 in an explainer video that generates 25 new customers worth $2,000 each in lifetime value. That’s a $50,000 return on a $5,000 investment—a 10X ROI.
Scenario B: You spend the same $5,000 on a video that nets you 2 new customers at $2,000 each. That’s $4,000 in return—a 20% LOSS on your investment.
Same investment. Dramatically different outcomes.
Why Many Explainer Videos Fail to Deliver Profit
The internet is littered with explainer videos that cost a fortune and delivered pennies. Why? Because they violate the fundamental principles of direct response marketing:
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They focus on features, not transformation.
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They lack a compelling call-to-action.
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They try to be cute instead of convincing.
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They fail to address objections.
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They’re not strategically deployed.
When people ask, “are explainer videos profitable?,” they often overlook these basics. Profitability comes from strategy, not style alone.
The Anatomy of a Profitable Explainer Video
The explainer videos that deliver staggering ROI share specific characteristics:
1. They Start with a Hook That Grabs Attention
You have approximately 8 seconds to convince someone to keep watching. Waste those precious moments on company logos or generic greetings, and you’ve already failed.
2. They Focus Relentlessly on Benefits
Translate every feature into a concrete benefit, preferably with specific numbers attached.
3. They Tell a Compelling Story
The most profitable explainer videos follow a simple narrative structure with clear transformation.
4. They Establish Credibility
Skepticism is the natural response to any marketing message.
5. They Include a Clear, Compelling Call-to-Action
A strong CTA often makes the difference between “meh” results and massive ROI. And again… are explainer videos profitable? Only if you tell people what to do next.
The Distribution Factor: Getting Your Video Seen
Even the most persuasive explainer video is worthless if nobody watches it. Are explainer videos profitable without a solid distribution plan? Absolutely not.
Profitable videos are strategically deployed across multiple channels:
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Homepage Hero Section
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Dedicated Landing Pages
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Email Marketing
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Social Media
- Youtube channel
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Paid Advertising
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Sales Process Integration
- And so much more
Measuring Video Profitability: The Metrics That Matter
To determine if explainer videos are profitable, you’ll want to track these metrics:
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View-to-Lead Conversion Rate
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Lead-to-Customer Conversion Rate
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Customer Acquisition Cost (CAC)
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Customer Lifetime Value (LTV)
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Return on Investment (ROI)
The Brutal Truth About Quality vs. Cost
“Why spend $5,000 on a video when my nephew can make one for $500 using an online template?”
Low-cost videos ARE appropriate in some circumstances… but they’re not designed for serious ROI. If you’re still wondering, are explainer videos profitable, ask yourself whether you’ve invested in substance—not just style.
How to Ensure Your Explainer Video Is Profitable
Follow these steps to maximize the chances your explainer video delivers substantial ROI:
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Start with strategy, not production.
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Invest in the script.
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Test your concept.
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Build measurement into your plan.
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Create a distribution strategy.
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Optimize based on data.
Gisteo: Clarity & Profitability Through Strategic Storytelling
Founded in 2011 by Stephen Conley, Gisteo is a Miami-based explainer video company dedicated to transforming complex ideas into clear, engaging narratives. With over 3,000 videos produced for clients worldwide, Gisteo specializes in creating animated explainer videos that resonate with audiences and drive results.
Why Choose Gisteo?
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Script-First Philosophy: Emphasizing the importance of storytelling, Gisteo focuses on crafting compelling scripts that form the foundation of every successful explainer video.
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Transparent Pricing: Gisteo offers clear, upfront pricing with packages starting at $2,750, ensuring clients know what to expect without hidden fees.
- Unlimited Plan: We partner with clients that need to produce a volume of work with our unique yearly retainer plan.
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Diverse Video Styles: From 2D animation and motion graphics to whiteboard and mixed media, Gisteo provides a range of styles to suit various brand needs.
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Efficient Turnaround: With a streamlined production process, Gisteo typically delivers projects within weeks, not months.
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Global Clientele: Serving organizations of all sizes across different industries, Gisteo has a proven track record of delivering high-quality explainer videos that communicate effectively.
FAQs: Are Explainer Videos Profitable?
Q1: Are explainer videos profitable for small businesses?
A: Yes, when strategically crafted and targeted, explainer videos can provide significant ROI for small businesses by effectively communicating value propositions and converting viewers into customers.
Q2: How do I measure the profitability of an explainer video?
A: Key metrics include view-to-lead conversion rates, lead-to-customer conversion rates, customer acquisition cost (CAC), customer lifetime value (LTV), and overall return on investment (ROI).
Q3: What factors influence the profitability of an explainer video?
A: Factors include the quality of the script, clarity of the message, visual appeal, distribution strategy, and the presence of a strong call-to-action.
Q4: Can a low-cost explainer video still be profitable?
A: While budget-friendly videos can be effective for testing concepts or targeting warm audiences, investing in higher-quality production is advisable for competitive markets or complex offerings to maximize profitability.
Q5: How does Gisteo ensure the profitability of the explainer videos it produces?
A: Gisteo employs a script-first approach, focusing on clear messaging and storytelling. Combined with diverse animation styles and strategic distribution guidance, this ensures videos are not only engaging but also drive desired business outcomes.
The Bottom-Line on Explainer Video Profitability
Are explainer videos profitable? When crafted with direct response principles, deployed strategically, and measured rigorously—absolutely, unquestionably yes.
But treated as creative art projects without clear business objectives? They’re expensive indulgences that drain marketing budgets and deliver little in return.
The choice is yours: approach explainer videos as serious business tools designed to generate profit, or prepare to join the ranks of businesses with pretty videos and empty bank accounts.
Ready to create an explainer video that actually delivers ROI? Contact us today or schedule a free consultation to discuss your project.
