Content marketing truly is an effective way to promote your brand. However, one element that is somewhat elusive to most marketers is how to successfully calculate ROI (return on investment). When it comes down to it, you really need to measure the ROI of your content efforts. Honestly, measuring the ROI of your content and the success of your content are interdependent.
ROI focuses on the actual time and money spent on creating and promoting content. The success depends on the goals you set. That even includes social shares, page views or marketing qualified leads (MGLs). But you can’t figure out the ROI without a clear understanding of what your brand considers to be successful content. Today we’ll discuss the steps you need to take in order to effectively measure your brand’s content marketing efforts.
Okay, let’s pause for a minute before we dive head first into calculations. There are two common issues when it comes to calculating the ROI of a campaign. The first one is that, when it comes down to it, content marketing is a long-term game. Almost every campaign starts with a negative ROI. But don’t worry, it improves over time. The second one is that there are a lot of benefits that content marketing provides – most of which are hard to quantify numerically. This is where brand perception comes into play and brings along with it a lot of advantages. Below are the steps you can take to measure your content marketing ROI, plus a nifty formula that you can use.
It’s really important to understand what ROI is…
Another way you can look at it is…
It might be even easier to look at it this way…
Of course, it isn’t really that simple. There are a lot of elements that go into both the return and the investment of any content marketing campaign. Some of these are quantifiable and some aren’t. A content marketing ROI breakdown looks more like this….
The three major components of ROI for content are:
I’ll go over additional costs, like writing content in-house vs. outsourcing it, in the section below. For now, let’s move on to content utilization.
If your content isn’t being used, all of the money you’ve used on creation and promotion you end up with negative ROI. So before you go content crazy, you need to remember that your content won’t have any impact if it isn’t used or shared.
Finally, content marketing ROI needs to define the business value of the outcomes it generates. You need to consider a couple of things first. Like what was the original goal of creating your own content? Was it to gather new social followers or was it for a new product launch? Each piece of content should have its own unique goal. In addition to the general ROI calculations that you will apply to it.
Now that you understand how complicated ROI can get, let’s start calculating. 😉
Before you can start to see the results of your content, you need to put the work in. That means promoting your content via PPC and social ads, or writing your content in-house. You can even take a look at what you’re spending to make your campaign a success. For example, if you work with an external agency, it will be pretty straightforward when it comes to all of the elements of your campaign.
But if you are using your own employee or contractors, your calculations can get a little more difficult. If this is the case, you might want to create an average estimate for how much time these individuals spend per month and how it matches up against their cost.
Content marketing has been known to do a lot with very little. You’ll really start to notice this whenever you calculate your ROI return. Here are the five most important metrics you need to pay attention to…
Now let’s take a more detailed look into each metric…
Consumption metric focuses on how many people see your content on your website and other channels. Metrics can include:
Most of these metrics can be tracked in Google Analytics. However, downloads, open rate, and clickthroughs can be tracked through marketing automation software and social analytics tools. Email is one that you really need to track because it’s one of the highest producing ROI tactics.
Retention is determined by how well you keep your customers engaged. Metrics include:
Customers can also be engaged through tactics like e-letters. This is where clickthroughs and open rates come into play.
Most sharing metric come from your social media analytics tools. Don’t worry there are both free and paid options. These metrics can include likes, shares, and retweets.
Thankfully leads are one of the easiest elements to track through a content marketing automation platform. According to Salesforce and Pardot’s study, brands that use automation have 53% higher conversion rates from responding to qualified leads. But whenever you look at leads you also need to look at the ones generated across the buyer’s journey (multi-touch, first touch, final touch, etc.)
This section is usually the most important aspect. A lot of times, what matters is how much money your content is making. Sales metrics include:
Even with all of these elements, what your content ROI really comes down to is the formula that Curata constructed. Even though you need to take a few things into consideration, revenue is what really matters.
Curata suggests that “For each piece of content x in Campaign C, take the $ amount of Revenue generated (a sales metric) by Content x and divide it by the ($ Production Cost for x + $ Distribution Cost for x) (a production metric). If the ratio is greater than 1, your content was profitable from a sales perspective.”
This formula can even be used for one piece of content, for a specific campaign or for your overall content marketing.
If that formula looks familiar, you’re right. It’s pretty similar to the calculation at the beginning. However, it’s important to understand everything that goes into calculating your ROI. Even if you don’t use every single metric to prove that your content actually works.
When it comes down to it, you want to know who’s seeing your content, how people interact with it, and how they feel about it. Explore some of the other metrics listed above. It’s one one of the best ways to determine your overall content marketing ROI. Sometimes those hard-to-quantify benefits like brand reputation, visibility, and the future value of your content. But knowing these are important and will help your brand in the long run. Have you calculated your ROI before? Let us know in the comments below.