The return on investment (ROI) from content marketing is typically higher than any other marketing or advertising – as much as four times higher, according to consumer brand giant Kraft.
Before delving into this, let’s consider how content marketing is currently used.
Research conducted by Rebecca Lieb of Altimeter Group found 70% of marketers don’t have an integrated strategy. But research from LinkedIn found 72% of marketers did have a strategy in place for content marketing. This suggests somewhere in the region of half of all content marketing strategies are not integrated with the rest of the business strategy, which can present big problems and poor communication between departments.
There are a lot of different types of content that the market wants you to produce. These include blog posts, media releases, videos, slideshows, infographics, podcasts, and images.
For businesses to even consider investing in content marketing, we need to think about how to measure it to ensure your efforts are generating a return?
Calculate a content marketing ROI for your campaign.
Measure the costs of content marketing.
Determine content usage to ensure effectiveness.
Evaluate lead generation efforts and sales.
The first step in the ROI equation is calculating all the costs involved in your content marketing efforts, including staff time, copywriting fees, design costs, project management, distribution and any software used.
We’ve reached a point in the evolution of content marketing where we can’t afford to just guess anymore. It’s important to identify every investment you make, whether it’s through an employee’s salary or a subscription-based tool.
Measuring the costs involved in producing and managing content will help you make better-informed decisions and prove that content marketing deserves to be a part of the marketing budget.
The Content Marketing Institute suggests the following formula:
- Multiply the hours per month required to create the content by the hourly pay rate of the workers who created it.
- Multiply this by the overhead factor (don’t forget office rent, insurance, utilities, etc., and typically 50 percent extra).
- Add up all the other costs, such as design, hosting, software and subscriptions. Allocate them to a specific content program or amortise them monthly across the whole program.
For example, assuming 40 hours is spent per month at £40 per hour to create a company blog, multiplied by a 50 percent overhead factor and adding in £1000 per month for design, £100 for hosting and £100 for miscellaneous fees, the total monthly cost equates to £3600.
As much as 70 percent of all content generated goes unused, according to Sirius Decisions, and any content which is unused is wasted. This makes it vital to track not only content production but also usage.
Check Google Analytics data to determine usage metrics such as the number of unique visitors for each webpage, new visitors versus returning visitors, referrals, bounce rate, page load time, keywords and ranking, outbound links, conversions and location. Check out the ‘page value’ section to see how often a page is viewed before conversion.
By identifying the components of content on each page and measuring them with such analytics, it can be easy to determine what’s performing well, and what isn’t.
Check social media analytics too: how many times was your piece of content viewed, shared, liked or commented on in social media such as Facebook or Twitter? How many other sites have linked to your piece of content? Did it generate extra traffic to your website or call centre?
The content marketing campaign should be generating new leads for your business so make sure these are measured too. For example, determine how many people go to the lead form on your website after consuming your content. If leads are handled via phone, install a script showing a different (trackable) phone number after people have watched a video or downloaded an ebook.
Other forms of lead generation could be the number of people signing up for a free demonstration, subscribers to your newsletter or followers for your social media. Check click-through rates (CTRs) for your calls to action too – a low CTR will indicate you are marketing the wrong type of content to a particular segment, while a high CTR shows a positive response from the target audience.
While lead generation is important, sales are the ultimate measurement of the content marketing campaign so make them trackable. Some metrics to consider include the sales conversion rate (sending content to leads should build trust and eventually sales); sales cycle length (effective content should reduce the length of the average sales cycle); and contract size (should be larger for clients nurtured with content instead of those that were not).
Calculate the return
Finally, calculate the ROI by using the following formula:
* ROI = (Revenue generated – cost of content marketing)/cost of content marketing.
For example, if the content marketing campaign generates £10,000 in revenue and the total cost of the campaign was £5000, the ROI would be 100 percent.
In the earlier example, the ROI is determined by multiplying the number of leads per month by the lead conversion rate, average lifetime customer value and average profit margin.
For example, collecting 25 leads per month from the company blog at a 20 percent lead conversion rate generates five new followers. Assuming a £3000 average lifetime customer value and a 30 percent average profit margin, and the monthly blogging return totals £4500.
ROI is then determined by subtracting the investment from the return and dividing by the investment.
Here, this equates to £4500 less £3600 equals £900, which divided by £3600 equals 0.25, or a 25 percent ROI.
This should be compared to the ROI from more traditional forms of marketing to determine how much content marketing is contributing to the success of the business.
Although content marketing costs money, it can save money as well. For example, if a £500 piece of content attracts 1000 visitors to the website, and Google AdWords would have cost £1 per click, then the content has saved £500. Other benefits could be reduced calls to support staff, or money saved on expensive sales staff.
Content marketing can also help in making long-term strategic decisions for a business. Try using the Advanced Segments filter in Google Analytics to track four core audiences, consisting of new audiences, returning audiences, converters and non-converters, and then placing them into a reporting system based on visibility, community and action.
Over time, insights start to form. I started to effectively track the rate of brand awareness based on new visitors as well as the rate of growth of my community based on those returning visitors. I used the data to improve and tailor the content to what the audiences were telling me they wanted. It created more new audiences and a larger community. I was then able to look at how the audiences were engaging with the content in terms of converting and to reduce the time it took from new visitor to customers.
A famous management maxim states: “What gets measured gets done”.
In the world of marketing, measuring the effectiveness of a content marketing campaign is crucial in justifying the costs and generating a credible ROI that shows how it’s delivering more engaged and profitable customers.
Don’t know where to start? Talk to Brandlective’s strategists to discuss how we can help streamline the creation, management and measurement of your content marketing efforts to help deliver an effective ROI for your business.
Tracking and improving content marketing ROI is crucial to the success of any campaign.
UPDATE: A savvy little tool I have come across for a quick check of ROI can be found here:http://frac.tl/content-roi-calc/
Ensure you are on top of this by:
Examining usage and engagement.
Checking lead generation.
Calculating a credible ROI for your efforts.
Have we missed any of the basics? Tell us how you measure your content marketing?