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Video Agency & Animation Studio – Produces Live Action Video Content for Large & Mid-Sized Companies – 70% Repeat Order Rate – 37% Net Margins

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Website Closers® presents a Video & Animation Agency that has astutely transitioned with the times to be at the forefront of its niche. The nature of the corporate structure allows management to keep costs down and maximize profits. It also allows them to pivot on new initiatives and services easily. In addition, offering a quality service at a highly competitive price point has been one of the keys to success.

The quality of work and eye for talent has enabled ownership to build an impressive creative network that it leverages regularly. These aren’t arbitrary freelancers—they are “go-to” creatives who have been working with the agency for over 7 years in many cases. As a result, they know the process and understand customer expectations.

Barriers and competitive advantages are in place, making the company more enticing for a prospective buyer. It’s difficult to break into this space, given the market’s maturity. A big part of this business’s revenue comes from past clients and referrals. Subsequently, stepping into this space fresh and building a new brand would be risky, costly, and enormously challenging. The built-in client base gives the agency a competitive advantage because it doesn’t require a large advertising budget to generate customers. In fact, less than 3% of revenue is used for that purpose.

The five core services offered are:

  • Explainer Videos
  • Screencast Videos
  • Mobile App Demos
  • Live Action Video Content
  • Video Editing Services

60% of revenue is driven by explainer videos of little over a minute. Companies typically use these on their website home page as an overview video or to succinctly explain various products or services. Screencast videos, or demo videos, follow in popularity and account for 20% of income, with the balance split between other services.

All orders are project-based, and the average contract size is between $8,000 and $12,000, taking five to seven weeks to complete.

The payment structure of every order is structured differently. Frequently there are specific benchmarks such as script approval, board approval, and the first preview of animation that would prompt payments at various times during the life of the order. One example would be a multi-video order where a client purchases 8 to 10 videos over a year. In that scenario, they would pay a percentage upfront and the remainder upon completion. Another example would be when a company wants to move forward with five videos as part of its quarterly strategy. The agency begins with one video to get branding and style down. Once that video is complete and approved, the remaining four videos are produced. Many clients return regularly to refresh their videos or purchase additional ones after an initial order. They may want to build product-specific videos or have shorter iterations of an existing video created for social media advertising. Other clients need to edit their videos often when an update occurs with their app interface, or a rebranding happens.

Lead generation has been refined over the years. The business experimented with PPC advertising for many years but needed to realize an optimal return on ad spend and found better alternatives. Since 2018, the leading marketing strategy has been targeted emails using Zoom Info. In the first two years, they saw an ROI of 400%. Zoom Info continues to be the focus of lead generation, with weekly and bi-weekly targeted campaigns sent to approximately 8,000 contacts. This marketing strategy now accounts for around 60% of new business. The brand has always performed well organically in specific areas under the term’s animation studio and explainer video for which they appear on the first page of Google. More recently, the team has optimized SEO on its Vimeo portfolios—dozens of videos pertaining to certain niches. These include tech, patient education, product-specific videos, manufacturing, and retail. For example, they have had positive results in showing up organically when a particular company is searching for a B2B tech explainer video. Approximately 10% of the client base can be attributed to organic SEO.

Additional strategies in place are proving lucrative. Drip email marketing campaigns and regularly being featured in countless ‘Top Explainer Video Companies’ lists over the years play a significant role. Approximately 5% of new client comes from word-of-mouth referral.

The two owners typically work between 20 and 25 hours weekly. One oversees sales and management, while the other oversees operations, including sales, creative team management, finances, and marketing.

There are three full-time employees and one full-time contractor. An additional and extensive list of contractors works with the company on a per-project basis.

This profitable, well-oiled business is an excellent bolt-on for a marketing agency or an ambitious individual buyer. Continuing relationships with existing clients to offer new products and marketing, technology, automation, SEO, and potential SDRs would be valuable abilities to possess. Still, these are all skills an entrepreneur would most likely be familiar with. There is an opportunity for a savvy marketer to come in and leverage existing clients and prospects.

This Digital Media Company is Represented by:

WebsiteClosers.com

Technology & Internet Business Brokers

WC 2889

Asking Price
$ 2,200,000
Cash Flow
$ 516,327
Gross Income
$ 1,401,312
Year Established
2010
Employees
4

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