The Ultimate Guide to Explainer Videos: Types, Budgets, Styles + Real Cases

Mar, 11, 2021
Tim Aleksandronets
Tim Aleksandronets
CEO at Blue Carrot


Looking for tips on how to make an explainer video? In 2021, videos are a powerful marketing tool used by most companies. According to Tubular Insights, 73% of users bought a product after watching an explainer video about it, and over 43% of customers bought items they saw in YouTube ads even though most users often mute such ads.

However, to increase your sales funnel’s efficiency or achieve specific marketing goals, your business explainer video should contain the right message and target the right audience. In this explainer video guide, you’ll find detailed answers to the question of how to create explainer videos

Blue Carrot, an explainer video production studio with seven years of international experience, has put together information featuring important aspects of producing explainer videos to help you maximize your marketing budget and establish realistic expectations around explainer videos. 


  1. What is an Explainer Video, and Why Are They So Popular? 
  2. Why to Use a Business Explainer Video
  3. Explainer Video Types
  4. Explainer Video Styles
  5. Tips to Create an Effective Explainer Video
  6. How Much Does an Explainer Video Cost?
  7. How to Choose an Explainer Video Production Company
  8. Where to Use an Explainer Video
  9. Final Thoughts

What is an Explainer Video, and Why Are They So Popular?

The truth is that the majority of web users prefer watching a video to reading words, based on a recent Forbes report. According to Social Media Week, last year, Internet users claimed they retained 95% of a message when obtained via video. Users see these videos through various channels, including social networks, internet news media, targeted advertising, and many others. As a rule,  explainer videos make up the lion’s share of such content.

In marketing, there is no single definition of an explainer video. For example, an explainer video could be a 30-second YouTube ad featuring the key benefits of a nice wooden sofa, or a 10-minute how-to video for bank customers providing step-by-step instructions on how to set up a bank account online. Here, we’d like to further define the term to distinguish it from marketing videos in general. 

To answer the question of how to create explainer videos, you need to first define what you mean by such content. Here’s our interpretation – an explainer video is a visual story that engages new audiences, helps them understand your product or service, and converts viewers into clients. The concept includes several types of videos that brands use at different stages of their sales funnels. 

Below are a few explainer video examples you can use at different stages in the sales funnel: 

Stage #1 — Awareness

Video Types to Use —  promo, E-learning, social media ads 

Stage #2  — Interest 

Video Types to Use — explainer**, product-focused, Kickstarter video, corporate

Stage #3 — Decision 

Video Types to Use — demo, tutorial, testimonial  

Stage #4 — Loyalty  

Video Types to Use — onboarding, tutorial, branded, E-learning

* This is a rough list of the types of videos that we recommend using at various stages of your sales funnel. The final choice can only be made after studying your business goals marketing strategy.
** 1 Explainer video covers 3 marketing funnel stages: awareness, interest, decision

Explainer videos are not a recent phenomenon and many brands have been using them for years in promoting their products and services. 

The latest tech advances in high-speed data exchange and mobile device capabilities make it possible for almost any brand to use video to communicate with its audience. So, it’s no surprise that today 60% of both B2B and B2C marketers use and benefit greatly from marketing videos.

In 2021, there is no doubt that you should leverage explainer videos in your marketing strategy. Modern marketers are more concerned with what stage of the sales funnel in which to use such videos, where to post them, and what messages they should convey. They are also looking for the best examples of explainer videos to use as references. 

Read on to learn how to avoid mistakes while answering these questions, or contact Blue Carrot managers right away to save time and find what works best for you.


Why to Use a Business Explainer Video

In 2020, over 65% of brands that don’t currently use video in their communication said that they plan to start. At the same time, 87% of marketers around the world were already trying to focus on video content to promote their brands’ products. 

So where do you start if you don’t have any experience boosting your business with videos? Explainer videos are the answer! As the most flexible and multifunctional type of content video you can find on the Internet, explainer videos can greatly benefit your budget. You can create an animated explainer video just once and use it to achieve three goals at the same time:

  •  Inform a wide audience about your product
  •  Explain how your product works
  •  Convert those who understand your product into those who use it

Moreover, the same explainer video examples can be used to increase conversions at different stages of your sales funnel. For example, if you have a video about how your fitness app works, you can use it to advertise on Facebook, show off your product’s features on your landing page, or communicate with your Instagram followers. In the third case, you need to divide the video into several parts. 

Already thinking of how to make an explainer video? There are other hidden advantages of explainer videos over other types of content. 

First, in most cases, well-keyworded videos have a positive impact on the site’s position in search results and generate more page visitors. Additionally, users tend to spend 88% more time on pages with videos than on pages with texts and images alone. That means, by adding videos to your pages, you can increase user time on site and earn better Google scores. 

Second, you can further benefit from video by reusing the aesthetics or characters in your presentation materials and on website pages leading to marketing budget savings. 

Third, you can reuse your video content by posting its parts on social networks or uploading it to YouTube to earn extra attention for your brand.

Videos also have disadvantages in the context of marketing. Compared to preparing banner ads or static designs, video content production requires a tremendous amount of effort and a higher budget. Thus, any mistake in choosing a video style, its tone of voice, or distribution channel, may be costly. 


Explainer Video Types

What is an explainer video in terms of marketing and creativity? In the paragraph above, we used the term ‘explainer video’ to describe videos in which companies try to explain to potential buyers and followers how their products work or how their business can benefit them. 

Keep in mind, such corporate or product videos are not types of explainer animation but rather standalone products aiming not to explain but to directly sell corporate image or products. 

At Blue Carrot, however, we offer you a more specific classification for such content. For over 7 years, we have been producing various videos for companies from scratch, and the explainer video is one of the products we focus on. Here’s a list of features that will help you to distinguish the most popular explainer video types from one another.   

Corporate Explainer Video

to tell more about your company

This is the type of content that companies use to explain to employees and target audiences various aspects of their company. These are multifunctional videos that can even be part of a series (for example, an onboarding series dedicated to corporate culture and security guidelines).

Promotional Video 

to advertise your business

The main feature of such videos is that they are usually used at the early stages of the sales funnel. The purpose is to introduce the product to a wide audience and evoke their interest.

Brand Video 

to make stronger connections with your audience

A brand video is usually part of a thoughtful content plan. They are used when companies rely massively on content marketing. 

This can be an animation that reveals a product’s value through custom use cases or a business explainer video that educates and entertains the audience in the context of the company’s products. For example, a company that produces blenders can post culinary videos on its YouTube channel.

Product Video

to show the benefits of your product

Videos of this type are product-focused. They explain to the audience the benefits of a particular product. They also provide evidence that the solution is effective and sometimes even show how it works. Often these videos are based on the script template ending with a link to the product page on the manufacturer’s website.

Kickstarter Video

to sell your amazing ideas on crowdfunding platforms;

This is essentially an explainer video focused on crowdfunding campaigns. If you are planning to attract investments to your project using crowdfunding platforms (Kickstarter, Indiegogo, Patreon, or others), this type of video is a necessity. Such content is used to save potential investors’ time and gain trust.

Note! This is not a complete list of explainer video types. What’s more, companies often combine several video types to use the same content at different stages of the sales funnel. Contact us to find a format that meets your business goals.


Explainer Video Styles

A video style is a set of visual rules that makes explainer animations visually holistic and therefore more appealing, captivating, and memorable. It is important to note that illustration style and animation style (or video style) are not the same. For example, for the most common video style, cutout animation, you can use different illustration styles like painted or flat.

There is no single definition of video style. In general, video production studios use the term ‘video style’ to talk about the animation techniques they use. The most popular explainer video animation techniques are:

🔹 Cutout

🔹 Motion Graphics

🔹 Frame-by-frame

🔹 Whiteboard

🔹 3D

While the final cost of an animated video depends on many factors including the level of creativity required and video duration, the animation style affects the budget significantly and 3D animation remains the most expensive animation technique so far.

How do you choose a style for your future explainer video? Keep in mind that the style is not a standalone characteristic of your future video. This tool makes your message clear and expressive while also connecting with your target audience.

As a rule of thumb, when choosing a video style it is important to remember that the new video shouldn’t contradict existing visual branding. Use your corporate stylebook as a starting point in your search for a video style. If your brand does not have a stylebook, refer to the brand values ​​list and create a mood board based on it.

The next question you need to answer is “What kind of emotions do you want to evoke in your target audience?” In other words, determine what kind of vibe you need to achieve your business goals with this video. Do you want to thrill your audience? Make them laugh? Or think about something? Depending on the answer, you will come up with a storyline that will be a factor in choosing a style. That style should be flexible enough for the story to shine.

Also, the style should support the general feel or mood of the video. Would you like to keep it simple, or colorful, or impressive, or different from others? The style of animation and illustration offers great opportunities for emotional impact on viewers. Use examples of explainer videos from other brands as a source of inspiration and insight.  

The third factor in choosing the style of your future video is budget. The style of the video is determined by characteristics like the complexity of the background and characters, as well as the number, intensity, and smoothness of their movements. Whiteboard animation is the least expensive, while3D animation is the costliest, as it requires more artists involved for more time.

Note! If you have a desire to create animated explainer videos in your favorite style, do not forget to add references to your tech requirements. Contact us to start a project.

Check out Blue Carrot’s approach to explainers production.

Tips to Create an Effective Explainer Video

The explainer video production can take 5-6 weeks or more at Blue Carrot. Deadlines are influenced by many factors, including the duration of the video, its style, script, and music, as well as the skill level of the tea, and your budget.

There are also common mistakes that may slow down production or even make explainer animations senseless. Here’s a perfect explainer video roadmap to help you avoid most of them.

Step 1. Clarify your goals and objectives

If you do not have a clear idea of ​​why you need the future video, where you will use it, and how you will evaluate the result, it will be difficult for you to explain your task to the video production studio. 

At Blue Carrot, we help clients achieve clarity on these issues and we do not start developing a video concept if we don’t have answers to basic marketing questions.

Step 2. Describe your audience

It’s impossible to create a video that engages your audience and convinces them to take targeted action if you don’t understand what your audience looks like.

Typically, explainer videos are targeted at prospective buyers of your product or service. In other words, your marketing department has already come up with an ideal customer profile and the only thing you need to do is to share it with your video production company. 

Here’s a list of key characteristics of your video target audience:

You also need to describe in detail everything related to the target audience’s attitude toward the problem that you want to solve for them. Why is solving this problem important to them? How do these people make decisions about using your product?

After you’ve answered these questions, finish out your research with details of how those people will consume your future video content. 

Communication channels will determine the format of the video, its duration, and even some stylistic features. Possible communication channels include Facebook, YouTube, your website, offline or online events, email chains, and crowdfunding platforms.

Step 3. Come up with detailed tech requirements

The first two steps that we described above can be called the preparatory stage. You can take them before you even turn to video production. All you need is to hold a few strategic meetings within your marketing department. 

Here, your task is to add specific technical requirements concerning a future explainer video. That can be established during the initial meetings with the video production team. The following points should be included in the technical documentation:

— Basic video specifications

video ratio, file format, acceptable duration, resolution, subtitles, voiceover

— The list of tasks undertaken by a video production agency

video concept development, scriptwriting, storyboard development, style-framing, illustration, voiceover recording and sound creation, animation, video localization, cutdown versions

— Stylistic characteristics and other suggestions 

brand book (if any) or mood board, references regarding the style of the future video or its aspects, other ideas as for the style, plot, script, appearance of the characters, and anything else

Step 4. Looking for your big message and balancing brand and client interests

For your video to be effective, it should contain no more than one catchy message. The search for such a message is the responsibility of both the client’s team and the video production team. For example, such a message may be that the client’s product makes the client’s life easier and easier. However, you could look for more specific ideas to stand out.

The plot of your video (or its semantic content) should also be in a balance with what is interesting to the viewer and what action the company requires from the audience. During creative brainstorming, you will need a description of the target audience and business objectives that we talked about above. 

Step 5. Interaction with video production and review of intermediate results

Even though your project is now being handled by a team of scriptwriters, artists, motion designers, and other experts, you shouldn’t let the explainer video process go by itself. A workflow may differ from company to company, however, as a rule, it consists of smaller stages. At Blue Carrot, they are as follows:

A common explainer video production team includes a creative producer, scriptwriter, storyboard artist, illustrators, animator, sound designer, voiceover artist.

Each of the stages lasts from several days to several weeks, and at the end of each stage, you have one or more rounds of reviews. This approach allows you to stay on the same page with the video production team and ensures the future videos meet your expectations. 

Step 6. Release your video and see the results

Your project is not over when you release a video. It’s important to collect insights on how your audience is reacting or engaging with your video. Use metrics like video viewing depth, bounce rate, and conversion rate based on your CTA. This data will help you create even more effective videos in the future, as well as improve your current content strategy.      


How Much Does an Explainer Video Cost?

It is impossible to evaluate your project in terms of budget if you have not yet shared the information on what your future video should be like, who your target audience is, and why your brand needs this particular explainer video. These and other questions are usually contained in the brief that the production team gives to the client before the first meeting. 

Key factors that affect video cost are as follows:

— Task distribution 

Video production can cost less if a client takes on some of the work. For example, they can assign scriptwriting to an in-house team.

— Video style

3D animation is more time-consuming since it requires more artists with certain skills. The more hours it takes to create an animation, the more money you need to put into the project. Here’s one of the basic explainer video tips: if your budget is limited, opt for simpler animation techniques like motion graphics or cutout. 

2D animation often costs less than 3D but it is not a rule. For example, Disney-like traditional animation requires a large number of illustrations (for example, 25 per second), while whiteboard animation requires only one image per 5-10 seconds. Thus, the cost of these types of videos can be five times different! The price of 2D animation usually depends mostly on the style, technique, and duration.

For 3D, the price is influenced by the number of objects in the frames that you need to model, the level of detail, and the intensity of the animation. The fewer objects and characters, and the animation needed for a plot, the lower the cost of the video. The more realism you need, the higher price you will face. 

At the same time, longer 3D videos may cost less than 2D ones, as setting up new scenes using already modeled objects costs significantly less than drawing new frames almost from scratch.

— Length of your video

It goes without saying that to create animated explainer videos of longer duration you require more work hours. At the same time, the cost of the video grows disproportionately to the increase in its duration. For example, a 30-second video costs 80% of the budget for a 60-second video of the same style and content. The longer your video, the lower the cost of each additional minute.

— Specific requirements concerning your concept, style, script, music, and other aspects of your explainer video

The general rule is that the more exclusive specialists you need, the more you have to pay them. If you create a music-video, you spend more on hiring a songwriter and singer. As another example, creating the same video in different formats (for example, 16:9 and 1:1) will increase the budget. 

— Deadlines

If you need to quickly launch your video marketing campaign, you will most likely need to scale the team and pay several workers to parallel essential explainer video processes.

If you are planning to use business explainer videos in your communication for the first time, and therefore do not even know approximately what budget is needed to create an animated explainer video, use a simple rule. Start with the financial or other results you expect after integrating video into your marketing campaigns. 

As we’ve previously discussed, the cost of video production differs depending on many factors. However, it may also turn out that your expectations towards ROI are not realistic and you shouldn’t invest in videos at all. Contact our manager to find out if you should invest in explainer videos.

At Blue Carrot, we support transparency towards pricing. Also, we estimate our work in hours that have fixed prices. In the table below, we provide you with the average number of hours we typically spend producing different types of videos:

How to Choose an Explainer Video Production Company

If your content marketing strategy includes videos, you may be puzzled by the question of what video production company to use. This is a very important question since your choice defines how soon your video will be ready, how much it will cost and, of course, what quality it will be. 

At Blue Carrot, creativity, transparency, a business-focused approach, and democratic pricing are our features clients admire. However, there are also plenty of parameters to choose your future partners:

— Experience

If a company has a long history and a large number of positive reviews (you can check this on catalogs like Clutch or Google), it is most likely to provide you with what you need. 

Companies with years of experience work well if you are new to video production, as their teams can help define the business goals of the video, its concept, style, and distribution channels, as well as guide you through the production stages. This is exactly what Blue Carrot does.

Get in touch

— Expert area and professional adaptability

Here, we are talking about both the industries that a video production company usually serves, as well as the styles and types of videos that it has in its portfolio. 

For very niche industries like biomechanics, thermodynamics, or chemistry (where you need to showcase precise processes) we recommend that you narrow your selection to companies that have experience creating videos about products from your industry. 

You can also take a different route and choose a partner that possesses diversity across their portfolio. If they have examples of a variety of styles of the same high quality, that probably means they are flexible enough to understand your product however complicated and extraordinary it may be.  

Check out the Blue Carrot portfolio

— Marrying creativity and business goals 

Creativity is not just about how far the ideas of scriptwriters and authors go beyond the usual but also about their ability to use creativity and imagination to help clients achieve their marketing goals. Here’s an explainer video tip for those who want to find the perfect video partner. Go through the candidate’s portfolio again and evaluate its content in terms of whether these explainer videos can clearly explain something to the audience.

— Cultural background, language, and timezone

Companies from some geographic regions (for example, South Korea and the Philippines are popular for animation outsourcing) are cheaper. However, when working with such companies, there are risks regarding a low-quality video or facing difficulties during the communication stage. 

Choose companies from regions where professional culture is close to yours and that speak the same language as you. 

The difference in time zones sometimes leads to project slowdowns due to the inability to stay in touch constantly. It’s not about the time zone of a studio but rather about whether a studio has experience working with your time zone. The time zone difference is not a big deal for experienced international teams.

— Workflow specifics and transparency

There are several approaches to workflow among creative companies. The most common workflow model is Waterfall. Learn about it in advance or ask a studio representative to guide you through it. 

Transparency with clients, which includes reporting, clear pricing, and advanced planning, is an important advantage of a video production company you are working with. Check those aspects in advance. 

— Work tools

In video production, the software used is of great importance. If you plan to work with video further and need video source materials to pass to your departments, make sure in advance that the format of the raw materials is compatible with the software that your employees use. Also, clarify what is the policy for purchasing source files. 

See the Blue Carrot team

— Hourly rates

Products created by experienced teams, or those who have rare expertise, are more expensive. Hourly rates of Scandinavian or US companies are also relatively high. 

Try to find a balance between the quality of the videos that video production companies create and using your budget wisely. For comparison, the average cost of a motion graphics designer in the US is nearly $125 per hour while in Eastern European countries, the median for this job is less than $25. However, you can get the product of the same quality from people working in the US and Ukraine. 

Where to Use an Explainer Video

We already know that an explainer video is a cost-saving tool for brands, as this product can be used in two or even three stages of a sales funnel. We can also repurpose visual elements that were created for a specific explainer animation and thereby update your brand book without any additional effort or expense.

YouTube is used as a major platform for marketing video distribution and is used by 87% of all brands who opt for videos. However, there are also other platforms where video explainers could bring you significant results. Here is a list of platforms and channels on which explainer videos are useful:

  •  Brand accounts on social media (YouTube, LinkedIn, Facebook, Instagram, and others)
  •  Online advertising on social media and other platforms that support native advertising
  •  Corporate website or online store run by your brand 
  •  Events like meetings, presentations, and conferences 
  •  Welcome or How-to sections inside your digital products
  •  Crowdfunding platforms 
  •  Email templates and newsletters 
  •  Product pages on App Store and Google Play Market 

While the list goes on as long as your marketers have enough creativity, it is also better to focus on one or two platforms while sharing your messages with your target audience. 

We believe that the most effective explainer videos are the ones that brands place at the top of the landing page for a particular product or service. More than 83% of marketers say they are happy with the results of video embedding on their brand landing pages. Moreover, explainer videos are the most commonly used type! 

Final Thoughts

Producing effective explainer videos is a complex process that requires specific skills, marketing knowledge, creativity, and a deep understanding of your target audience. 

Even though 8 out of 100 brands are using video in their marketing campaigns and report growth in sales (and the explainer video is the most widely-used type of multimedia content they prefer), only well-thought-out and quality videos, created with marketing goals in mind and solid production expertise, can benefit your campaigns.

Using Blue Carrot’s explainer video guide, you can plan the production and implementation of explainer videos in your marketing strategy. Our guide will also help you clarify the style and set an approximate budget for video production. You can even go above and beyond and try to make your own explainer video yourself. And we will be glad if you succeed! 

However, if you want to avoid critical and money-consuming mistakes and get a high-quality video soon, our expertise is at your service. Contact us to start your project or get it estimated.

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