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Why Every SaaS Company Uses Animated Videos

Over the past few years, the explosion of SaaS (software as a service) companies have completely taken over the world. From fintech to streaming services, it feels like every company that has blown up in the past few years is a SaaS company. Although, the one thing they all have in common is animated explainer videos. So, why is every SaaS company using animated videos?

Types of SaaS Companies

Before we get into the usage and benefits of animated videos, it’s important to note the different types of SaaS companies and how they can each benefit from different types of animated videos.

These are the five main categories of SaaS companies. There are a lot of big companies that don’t fit any of these categories, but 99% of them do.

  1. Streaming Services (Netflix, Spotify, Peacock, etc.)

  2. Fintech (Stripe, Coinbase, Robinhood, etc.)

  3. E-commerce (Amazon, Shopify, AliExpress, etc.)

  4. Software tools (Salesforce, Dropbox, Adobe, etc.)

  5. Social Media (Instagram, Twitter, Snapchat, etc.)

Streaming services and social media use the least amount of animated advertising, and this is due to the nature of their products. A company like Netflix, for example, is much better off using one of their shows/movies to advertise their service since the product that they’re offering on their software is very easy to display in a commercial. Although, they still integrate animations into their live-action commercials when showing ease of use within the app itself and boasting new features.

On the other hand, software tools and fintech services like PayPal who don't really have any media integrated into their software would have much more trouble displaying the “use” of their program without an animated video. Since their product doesn’t have visual media to advertise, they have to show the software itself being used. This is where animated videos have taken over.

Brand Integration

SaaS companies realized that if they use animated video production, they can make custom motion graphics of their software that match their brand image perfectly since they are able to use the same colors, typeface, themes, etc.

Live action video exists within the real world, so if your app is themed black and green like Spotify, you’re only limited to the set design and accent colors of how you design and color grade your video. With animation, you can easily integrate those colors to make up the entirety of the video to stay congruent with your company’s image.

Customization & Budget Constraints

Another advantage of animated videos that SaaS companies realized is that they are extremely customizable and budget friendly. Unless they are having fully 3D custom modeled videos with rigged characters and ray traced lighting, a SaaS video will always come out cheaper. On the lower end of video budgets they will be more expensive most of the time, but they don’t scale as high in pricing as live productions do.

Why is this you ask? It’s because live productions have so many costly pieces that can constantly be added on with an increasing budget. Custom set designs, a hundred extras for the crowd, 30 crew members, ARRI camera rentals, etc. When it comes to animation, your budget only extends the length of the video, the detail of the animation, and that’s about it.

Live action videos will be cheaper on lower budget productions, and more expensive on higher budget productions. Animated videos are dominating the mid budget range, since they supply the most customization and creativity without sacrificing the entire quarter’s advertising budget.

Digital Advertising vs. Traditional

SaaS companies have realized why they need to be using animated videos more than any other type of company. Their products completely rely on digital users, so advertising on digital platforms is crucial.

Besides development and maintenance costs, they don’t have any “production” costs since they are just selling the same software over and over again. This means that all attention needs to be diverted to advertising, and minimizing the CPA (Cost per acquisition).

Because of their focus on CPA, animated videos also serve another purpose by being trendy within the industry. Why is this important? Because not all advertising is paid advertising, and SaaS companies realize the importance of organic growth and virality.

Animated videos for SaaS companies perform well because it’s something that the consumer is very comfortable and accustomed to seeing, so it has a better chance of helping the viewer understand what the video is describing. As we said in Top 10 Video Marketing Statistics of 2023, viewers on average will retain 95% of information from a video while only retaining 10% of information from text.

If you enjoyed reading about why every SaaS company is using animated videos in 2023, click here to learn more about how we can help your SaaS company develop beautifully animated videos for your business.

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