We’ve all been there. Yes, every content marketer has experienced that horrible moment—after spending hours creating a 10,000-words asset—when we suddenly realized the content we poured our blood sweat and tears into wasn’t doing what it was supposed to do. That it was driving neither traffic, engagement, nor leads. It was that moment when we intuitively knew that we weren’t getting anything back from the hours of time we’d spent investing in a piece of content. That feeling might have come from a deafening silence on social media after we shared it. Or the fact our website traffic plateaued or even decreased that month. Or the fact that sales in the company were down. No matter when it occurred, it was just a gut feeling that we had somehow failed to achieve the ROI of content marketing.
What is the ROI of content marketing? (To read our rigorous definition of content marketing check out this post.) While content marketers may not all be totally familiar with terms like ROI, we are all aware that at the most basic level, every piece of content we create exists not just to be consumed, but to provide some value beyond consumption to those who create it. The intrinsic value that content provides is different for each to marketer, small businesses and startup, but deriving value from content itself is a universal constant. This intrinsic value provides the basis for understanding the ROI of content marketing. And simply put, if you are not getting any value back from the content you are creating, you are truly not grasping the function of content marketing or how to do content marketing effectively.
In this post, we will help you learn how to achieve ROI from your content marketing efforts not only by helping you understand how to track and measure value relative to your business, but also by giving you practical steps to do the simple math for determining value for every asset.
Why the ROI of Content Marketing Is Rooted in Revenue
So where do we begin? Let’s start with the most obvious return you should receive from content: revenue. On a practical level, the concept behind the ROI of content marketing couldn't be more straightforward. ROI is simply the total amount of revenue that you gain from your content efforts when compared to the amount of money you spend on creating and distributing the unique content that forms the backbone of those efforts in the first place.
So if you spend $50 creating a high quality, visual piece of content and it ultimately generates $100 for your business by way of increased sales, you're looking at a return on investment of roughly $50. Multiply that average ROI by the total number of pieces you distribute and you begin to get a sense of just how quickly this can all add up. It also helps to underline why tracking this metric is so important in the first place.
But at the same time, no two businesses are created in quite the same way—and the same is true of their content marketing efforts. Revenue alone shouldn't be the only indicator determining if your larger campaign is a success or failure. When you initially set out to build your content campaign, you probably had a number of unique goals in mind. Maybe you wanted to increase page views to your website or drum up social media activity by earning more shares. Maybe you weren't focused on gaining new customers at all—you simply wanted to increase engagement with your existing ones.
All of these efforts will ultimately generate revenue when executed properly, but the amount of revenue you generate on its own won’t be enough to identify if you’ve met your goals.
Therefore, to truly measure the ROI of content marketing, you need to go much deeper than just tracking and measuring revenue gained from your content. You need to gain a better understanding not only of the metrics that matter as they relate to the goals you've set for yourself, but also how to measure them in the most effective way to really uncover the true narrative that is playing out in front of you. Tools like Google Analytics are tremendously helpful for determining the content metrics that matter most.
The good news is that getting to this point isn't exactly difficult—but it does require you to keep a few key things in mind along the way.
Further Reading: Download our FREE and comprehensive Ebook to learn how to get a return on your investment in content marketing The ROI of Content Marketing.
Laying the Foundation to Measure Content ROI
That said, to ensure you're measuring the ROI of content marketing in the right way, you need to have a solid foundation of accurate, actionable information from which to build. This means that "Step One" requires you to calculate how much you're spending to produce the content in the first place. You can’t know what you get out of something, if you don’t know what you put into it.
To determine how much you’re spending on content, you'll have to account for variables like:
The amount of money you paid to license any images or video assets for the collateral
The money that went into producing any audio elements like music or sound effects (in the event you're talking about a video)
The costs tied to any outsourced work that was performed by other organizations
Costs involved with any work done by other departments within your business
The salary of the content creator
The amount of time they spend on the content as it relates to the finished piece in question
Moreover, you'll also need to factor in the cost to distribute that content. Even the most objectively beautiful, high-quality marketing asset ultimately won't accomplish much if your target audience isn't able to find it.
This means you'll need to keep records of the costs involving things like:
Paid promotional techniques like pay-per-click, social media promotions and paid opportunities on other channels
The cost of the tools and software used for not only content creation, but content distribution as well
Once all of these variables are accounted for, you'll have a fairly solid indication of how much you're paying for a single content asset. At that point, you'll have something to compare all of your other metrics to moving forward.
Measuring the Metrics That Matter
Again, it's critical for you to understand that "return on investment" is actually a general term. Figuring out how many sales were generated by a piece of content is obviously important—but at the same time, it's still only one small part of a much larger story.
To speak to those sales, however, this is still an important metric to track to get a "bird's eye view" of how your campaign is really doing. Begin by adding up all the sales that resulted from the content in question—be it a white paper or a blog post or an Infographic or something else entirely. Only track those sales that you can directly attribute to the content you're focusing on at the moment.
Note that the best type of content is the kind that keeps "selling" for you over long periods of time, which is to say that you may not necessarily get a clear indication of the ROI of content marketing overnight. You might have to wait weeks or even months to see how a particular piece of content ended up performing, but that's perfectly okay.
How to Calculate ROI
Once you know what you're dealing with, subtract your initial investment from the total number of sales the content generated. Then, divide that figure by the initial investment. Multiply the result by 100, and you'll have the ROI of content marketing expressed as a percentage.
For a basic example, your calculation may end up looking something like this:
You paid $500 to create a piece of video content, which ended up generating about $1,800 in sales over a three-month period.
$1,800 - $500 = $1,300
$1,300 divided by $500 = 2.6
2.6 x 100 = 260
Therefore, in the above example your return on investment would be roughly 260%—not too bad for a day's work.
The Other Essential Metrics That Matter
But don't forget that content marketing isn't only about increasing sales—at least, not in a literal sense. It's absolutely possible to have a campaign with a positive return on investment that’s also misguided because it isn't actually helping you accomplish all the smaller goals you've laid out for yourself.
To ensure you’re measuring more than just revenue, you’ll want to track and measure all of the following important metrics:
Leads and Lead Quality: It’s all about the leads, baby. Anyone who tells you content isn’t about acquisition, sales or revenue is kidding themselves. As we all know, the chasm between a lead and a qualified lead is a deep one. But not all leads were created equal and just because a piece of content generates new visitors to your site doesn't mean those visitors are ready to buy or that that your product or service is relevant to those visitors. To see if your content is relevant and receiving high engagement, set up your individual campaign goals in Google Analytics and go to "Conversions," then "Goals," then "Funnel Visualization" to see which types of content are turning people into actual leads who are ready to do business with you. Once you figure out what’s working and what isn't, double down on the former and jettison the latter as much as possible.
Cost Per Acquisition (CPA): CPA is exactly what it sounds like. The total amount of money you're spending on average by way of content marketing to acquire one new customer for your business. To measure this, divide the total amount of money you're spending in content marketing via a specific channel by the total number of new customers acquired via that same channel. The average CPA for paid advertising is around $60, but for some companies is can be hundreds of dollars. Again, the whole point of content marketing is to drastically drive down CPA so you’re paying less to acquire customers and are therefore receiving more overall revenue per paying customer. So you’ll know when your content marketing strategy is working when this number starts to go way down.
Subscriptions: A critical metric for every content marketer to track and measure is the number of subscriptions either to a newsletter, blog digest or mailing list. In fact, I would be so bold as to claim that outside of pure revenue, your subscription rate is probably the best indicator of your content ROI as well as the health of your content marketing program in general. When you’re developing high-quality, relevant, and helpful content, your audience will subscribe to get more of it. It’s really just that simple. When your content fails to impress it becomes very difficult to get new visitors to subscribe or to keep them from unsubscribing. If your analysis shows that you’re now having trouble getting new subscribers or you’re hemorrhaging them, this is a big red flag that your content isn’t working.
Unique, New and Returning Visitors: Tracking these 3 metrics is a great way to see how content marketing is helping your audience grow over time—something else that will ultimately lead to increased sales as well as how much your content is driving your audience to return, which is essential for nurturing leads. If your content is strong, your unique, new and returning visitors should be steadily growing over a period of months—indicating that your audience and pipeline is getting bigger. If these numbers have plateaued, you may have a loyal audience, but it's also a niche one. Or your content may be attracting visitors, but also failing to get them to stay or return.
Organic vs Branded and Paid Traffic: Let’s try to remember that the whole point of developing a great content marketing strategy is to attract visitors to your content—website, blogs, ebooks, videos, infographics—without having to pay for that traffic. Again, this is the difference between paid traffic from advertising or PPC and organic traffic from search engines. The former is exponentially more expensive and less effective than the later. Content marketing began as a revolution against PPC and paid advertising—as for cost effective way to generate relevant, high-quality leads. For these reasons, it’s absolutely essential that you track and measure the percentage of organic versus paid traffic to your content assets every month. You’ll want to ensure that organic traffic is going up and a healthy range is for it to be above 40% of your website traffic. Moreover, as your content marketing efforts improve over time, you’ll start to increase brand awareness which will trigger an increase in “direct” or branded traffic to your properties. A direct search is when a visitor types your domain directly into search rather than typing a search query. The branded traffic you receive a month can be tracked in Google Analytics and other analytics tools like marketing automation. When you start to see a noticeable increase in branded traffic, your ROI from content marketing will start to soar.
Average Time on Page and Page Depth: These are both metrics that a tool like Google Analytics will allow you to track. Just because someone is landing on a piece of content doesn't mean they're actually engaging with it and this is one metric that tell you if you have a problem on your hands. In fact, studies show that 80% of visitors to a blog only read 20% of a blog post. If you wrote a 2,000-word blog post and your average time on page is under 10 seconds, you can guarantee that the vast majority of your visitors aren't actually reading it to completion. Figuring out why is your key to creating better and more involved content moving forward.
Social Media Engagement and Referrals: One of the critical ranking factors for Google’s algorithm is social sharing. The algorithm rightly assumes that if an article or piece of content is shared more on social then it is higher-quality. As Google is investing in directing its users to only the highest-quality, relevant content, you can bet that the more engagement your social media posts receive and the more click-thrus to your website from social media content, the higher that content will rank in SERPs. For these reasons every piece of content needs to be shared on social media not just once but many times and you need to actively track and measure engagement on social for content and how many website or landing page visits resulted from a referral from social media. Over time you want to see that social media referrals increase and the more they do, the better your return on investment will be.
By now, you should have a pretty clear idea of why sales or revenue alone doesn’t paint the full picture in terms of the ROI of content marketing. Sure, a single piece of content may have generated almost $2,000 in sales—but what does that really mean? If one of your goals was to expand the visibility and reach of your brand, those $2,000 in sales may have come from your existing, satisfied customers as opposed to new ones. Therefore, was it really a "success" in the way you wanted? Only a metric like "unique visitors" can help create additional insight into that fact.
Of course, all of this bleeds directly into what may be the most important benefit of all: you'll have all the actionable, analytical information you need to actually explain the ROI of content marketing to the right people, either increasing (or maintaining) buy-in from the people who are in charge of the budget.
Historically, content marketing is one of those areas that organizational leaders don't really understand the true value of unless you can explain it to them using cold, hard facts. If you go to an executive and say "I want to spend $2,000 to create this video," you're probably going to have a hard sell. But if you can also say "and based on similar content we've created in the past, I think it will increase social shares by X percent, which will increase lead quality by Y percent, which will ultimately generate Z number of new sales over a three-month period," you suddenly have a far stronger argument on your hands.
Therefore, understanding the ROI of content marketing accomplishes two pivotal tasks at the same time. First, you're able to explain what you're doing (and more importantly, why you're doing it) in a way that is persuasive, urgent and convincing. At that point, you're also able to confirm that your efforts are paying off in all the ways that matter - which is the key to building on that success and empowering your efforts across the board in the future.
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