An explainer video is exactly what it sounds like – a video that explains what a product or service does and why customers should buy it. Explainer videos are becoming more and more popular, with big names like Facebook and Google using them as much as startups. And for good reason: statistics show that website visitors are 64% more likely to buy a product after watching an explainer video. A successful explainer video is professionally produced, short, and includes a call to action at the end, and many of them use animation rather than live-action techniques.
One of the most successful videos of all time has belonged to Dropbox, whose minimalist website added to the video’s impressive performance. Dropbox is the brainchild of Drew Houston and Arash Ferdorski, two MIT students who kept forgetting their flash drives at home. To solve their problem, they designed a product that would make files available from any device with internet access.
Dropbox was not an overnight success. Part of the issue with Dropbox was that, when Dropbox was created, file sharing was a relatively new concept. People did not understand what it could do for them or why they needed it. In its earliest incarnations, Dropbox cost each user $99. It advertised using Google AdWords, but ended up spending $233 to $388 for each conversion. The approach was not profitable, so Dropbox started offering extra storage space to its existing customers in exchange for social media shares. Customers eager for more storage space shared away, and at its best, the campaign reached 2.8 million shares in a month, garnering Dropbox two million customers.
Dropbox introduced its explainer video in 2009. They chose an explainer video company that specializes in a mishmash of paper cutouts and stop-motion animation to create their explainer video. Dropbox paid $50,000 to make the 2:10 short. The video itself starts with a narrator fantasizing about a “magic pocket” that the user can put oft-forgotten items (like keys or a wallet) in for unlimited access from any location. It then shows how Dropbox is like a virtual magic pocket by following the story of a fictional character named Josh. Josh goes on a trip to Africa and uses Dropbox to back up important files and share vacation photos with his mom. It highlights the many useful features of Dropbox, including accessibility, data storage, and file sharing. The video ends by showing the viewer how they can download Dropbox.
Dropbox made good use of its video by simplifying its website. Once the video was released, Dropbox’s website homepage consisted of only two elements: the video and the “download” button. This gave visitors nothing to do except watch the video and download the product, thus increasing views and conversions. The video perfectly explained what Dropbox did, so customers understood what Dropbox could do for them and were more apt to buy in. By then, Dropbox was a freemarket company, meaning it offered a free version of its services along with a better paid version, so users felt even more incentive to try it.
Depending on the source, the estimated ROI for Dropbox’s explainer video was between $24 million and $48 million.
Dropbox’s approach turned out to be a success. Within a year, Dropbox conversions increased by 10%. Dropbox had 4 million users – doubled its number in 2009 – at the beginning of 2010, largely thanks to the explainer video. Depending on the source, the estimated ROI for Dropbox’s explainer video was between $24 million and $48 million. Common Craft says that in 2013, the video garnered an average of 30,000 views per day and has been viewed over 30 million times.
Now, after seven years of existence, Dropbox has 275 million users. Dropbox used several marketing techniques to reach the status it has today, but its use of a simple two-minute explainer video was admirable. It spent $50,000 on a two-minute video and made it the star of its website. The video was unassuming, easy to understand, and garnered Dropbox a 10% increase in conversions in one year. And, with 90% of online shoppers reporting that videos helped them make purchasing decisions, it is clear that the approach is working for others as well.