Introduction

For tech startups, capturing attention and converting leads is crucial. With video marketing being one of the most effective ways to engage audiences, the big question arises: should you invest in animated explainer videos or live-action videos? While both have their merits, choosing the right format can make a significant difference in audience engagement, brand perception, and ROI.

In this article, we’ll break down the key differences, pros and cons, and use cases for each, so you can decide which works best for your startup.

1. Cost & Production Time

Explainer Videos

• Cost: Typically more affordable than live-action videos, especially for startups with limited budgets.

• Production Time: Takes anywhere from 2-6 weeks, depending on complexity and revisions.

• Scalability: Once the assets are created, animations can be easily updated and repurposed.

Live-Action Videos

• Cost: Requires a higher budget for professional equipment, actors, locations, and editing.

• Production Time: Can take months due to casting, filming, and post-production.

• Scalability: Difficult to modify once produced; reshoots can be expensive.

👉 Winner: Explainer videos – more cost-effective and easier to scale for startups.

2. Engagement & Retention

Explainer Videos

• Use vibrant visuals and storytelling to simplify complex ideas.

• Studies show that viewers retain 95% of a message when watched in a video versus 10% when read in text.

• Works well for SaaS, fintech, and AI startups that need to break down technical concepts.

Live-Action Videos

• Creates an emotional connection by showcasing real people and testimonials.

• Works better for brands where trust and human interactions matter (e.g., coaching, B2C services).

• However, low-quality live-action videos can hurt credibility more than help.

👉 Winner: Explainer videos for SaaS & tech startups; Live-action for trust-building sectors.

3. Branding & Versatility

Explainer Videos

• Highly customizable: You can match brand colors, fonts, and tone for a cohesive look.

• Can be used across platforms (websites, ads, emails, onboarding, etc.).

• Animation is timeless – avoids looking outdated compared to live-action footage.

Live-Action Videos

• Can humanize the brand by featuring founders, employees, or customers.

• If not produced professionally, it can feel stiff, outdated, or forced.

• Rebrands require reshooting, making them harder to update.

👉 Winner: Explainer videos – flexible, brand-friendly, and future-proof.

4. Conversion & ROI

Explainer Videos

• Landing pages with explainer videos can increase conversion rates by 80%+.

• Startups using animation for ads see higher click-through rates (CTR) and engagement.

• Works best for product demos, app overviews, and onboarding videos.

Live-Action Videos

• Customer testimonials and case studies in live-action can increase trust and credibility.

• Great for founder stories, interviews, and behind-the-scenes content.

• Less effective for breaking down complex tech topics.

👉 Winner: Explainer videos for SaaS and complex products; Live-action for social proof.

Final Verdict: Which One is Best for Tech Startups?

Explainer Videos

✔ Budget-friendly
✔ Faster production time
✔ High retention rate
✔ Highly customizable for branding
✔ Higher conversions for SaaS & tech startups

Live-Action Videos

✖ More expensive
✖ Longer production time
✔ Strong emotional appeal
✖ Harder to update branding elements
✔ Higher conversions for testimonials

The Bottom Line:

• For SaaS, fintech, AI, and other tech startups, explainer videos are the clear winner – they are cost-effective, scalable, engaging, and drive high conversions.

• Live-action videos work best for trust-building, testimonials, and personal branding.

• A hybrid approach (using both formats) can be the ultimate marketing strategy.

Need an Explainer Video That Converts?

If you're a SaaS company or tech startup looking to drive more sign-ups, onboard users effectively, or explain your product in a visually engaging way, let Foetas handle it.

With our expertise in sales-driven storytelling and high-quality animation, we create explainer videos that convert viewers into customers. Let's make your startup stand out! 🚀

👉 Get a free consultation today!