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What is your content marketing ROI? The truth is—most marketers don’t know. Around three quarters struggle to quantify the return on their content marketing, making it a tricky proposition to build the business case. (That said, what is the ROI of advertising, really? I’ve never seen much convincing proof outside of direct e-commerce. So if you aren’t selling herbal supplements, can you really justify the spend on advertising?)
The reason why it’s hard to answer the question, “How much money did our investment return” is that it’s difficult to focus specifically on sales, and it’s difficult to attribute a specific asset—or even a program—to a sale.
There’s very few benchmarks, a little research, and some examples that have been published on content marketing ROI. At every company I have worked with, content marketing ROI is much higher than the average marketing ROI, and significantly higher than traditional marketing tactics—in every place we’ve looked.
Julie Fleischer, formerly at Kraft, says the ROI for their content marketing is four times greater than even their most targeted advertising. So the first way to respond to the question is to establish the baseline: what is your company’s average marketing ROI? If you’re feeling cheeky, ask for the ROI of that last press release, or the logo your company put on a golfer’s hat or on the side of a building.
Then you need to address these three components of ROI:
Content cost: You need a solid understanding of your content costs, which requires conducting a content audit, or at least a sample of the content you produce. Apply some average costs and extrapolate that to gain a sense of the size of your costs. Obviously you want to keep costs down and get as much bang for your content buck as possible.
Content Utilization: Sirius Decisions reports as much as 60-70% of content goes completely unused! Do you know what percentage of your content gets used? Any content your company creates but never uses is 100% waste. So track not only content production, but content usage too. And if you think this stat doesn’t apply to you, think again. 60-70% is the average. The lowest percentage I have seen is around 50%. The worst was much higher.
Content Performance: Finally, content marketing ROI needs to define the business value of the outcomes it generates. Most people start by talking about page views and social shares and clicks to something. But it’s important to first tie your content performance back to the business case that got you started in the first place.
The seven metrics marketers use for measuring content marketing success, ranked from high to low are, according to HubSpot research:
- SEO rank
- Time on site
- Customer feedback
- Subscriber growth
As Barry Feldman argues, effective content analysis requires documenting specific objectives, attaching specific KPIs to each objective, regularly tracking your chosen indicators, and using the data to take specific actions to refine subsequent efforts.
C-Level execs above all want sales metrics—some form of simple data to indicate content marketing ROI. To produce this data your marketing platform and CRM system need to be integrated to track user behavior throughout the sales cycle. Data showing which content paying customers consumed lets you assess which content influences sales the most.
Feldman advises creating formulas that make sense for your sales cycle and applying them to measure, for example:
- An individual piece of content (e.g. a blog post, a webinar)
- A group of content assets (or “campaign,” if you like)
- A form of content (e.g. your blog, all webinars)
Curata’s Pawan Deshpande has constructed a simple equation to determine your ROI:
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. You can similarly compute this for a single piece of content, or all your content marketing.
Alternatively, C can represent all content produced by a particular writer, and the calculation will give you the ROI for that individual. If their ratio is less than 1, they may need to up their quality and/or quantity of content produced. Take this with a grain of salt however, since there are many other variables that influence revenue.
So how do you answer the content marketing ROI question?
- Ask for your overall or average marketing ROI
- See if your business understands the cost of the content it produces
- Find out how much of it gets used. Ever. I’ve never seen any business over 50%!!!
- Promise to build a business case and measure the return
Understanding the content marketing ROI for your business requires a solid business case based on a deep understanding of your organization. You need to know your content costs, usage, and performance to determine your average marketing ROI and how content marketing can achieve a higher return.
You can then build a solid business case that allows you to reach new customers, engage them in a meaningful way, and convert them to new sales and long term relationships that provide real—measurable—ROI. Click on the banner below for a deeper dive into the subject via my webinar, available live and on-demand.