Updated March 4, 2021
Questions about content marketing ROI are probably the ones I hear most from marketers who are struggling to build the business case and demonstrate content marketing results.
We know our customers are tuning out advertising. And as consumers, we know we are ingesting more information online. In fact, since the beginning of 2020, Internet Live Stats.com estimates that search engine queries have increased by 2.5 times.
Whether it’s because we are working from home more, buying online more, or simply consuming more content, the end result is the same. We are looking to get more informed and looking to be entertained more. We are not looking for ads.
Now, every business creates content. And creators love their content like a mama loves her baby. Although the content may stink and no one has asked for it, nobody is going to call the content baby ugly.
How do we build the business case for content marketing and answer the ROI question before we even really get started?
What is the ROI of content?
Let’s start with how to answer the ROI question before really getting started. Content marketing has a higher ROI than the average marketing ROI in every place I’ve ever looked.
A few years ago at Content Marketing World, Julie Fleischer, former senior director for data, content, and media at Kraft, said in her keynote that content marketing ROI was four times greater than even their most targeted advertising.
The first step in responding to the content marketing ROI question is to determine the baseline for comparison: What is your company’s average marketing ROI?
Then address each of these three components of ROI:
To measure return on investment, you obviously have to know the cost or investment. If you don’t know the actual amount your company makes in content, then we can apply some averages to get an estimate.
I suggest a content audit: Make an inventory of the content your company produced over a length of time. Then, apply some average costs based on the type of content. You might have one cost for articles, another cost for email copywriting, and so on for each type identified in your audit.
You can add those up and extrapolate to gain a sense of how much your content costs.
Many people who ask me this question expect some magical answer without having considered the challenge in identifying content costs, especially in larger organizations.
Other marketing channels have less distributed asset production supply chains. For example, ads are created by an agency and distributed to external media by the same agency.
But content can be created by everyone in your organization. You need to define which content falls into your content marketing program. (Remember: Marketing with content is not the same thing as content marketing.) And calculate those costs before you can consider ROI.
You need to track content usage too.
If you use an agency for your content creation, look at a sample of the content it delivered and then audit your external channels for usage metrics. If you use internal resources, ask the campaign managers for usage reports.
If you’re like most companies, don’t be surprised at how challenging it can be to track content usage. Content that never gets used is 100% waste.
Most people incorrectly start the ROI conversation by talking about the volume of page views, social shares, and clicks. But you must first tie your content performance to the business goals that your content marketing program is designed to help achieve.
For awareness and thought leadership content, it’s important to go beyond traffic metrics to look at engagement rates. Anyone can buy traffic. But engagement is the key in today’s attention-starved world filled with so many choices.
For lead-generation content, I look beyond leads to measure both the quality of the leads (conversion rates) as well as engagement.
To answer the content marketing ROI question:
- Ask for your brand’s overall or average marketing ROI.
- See if your business understands the cost of the content it produces.
- Find out how much of the content ever gets used. (I’ve never seen any business over 50%.)
- Promise to build a business case and measure the return.
Build the content marketing business case
If you survived so far and still want to learn how to build the business case, there are some ways to do it based on your goal.
Goal: Reach early stage buyers
Most marketing content is overly promotional (and audiences tune it out). It is pushed too early in the buying process. Your business needs to get people to know your brand, like your brand, and trust your brand enough to want to buy from you.
That starts with a significant amount of early stage “introduction” content. It needs to be non-promotional and not overly creepy. You don’t want to push too hard at this stage because you want to continue the conversation.
Most companies have a significant opportunity to reach more early-stage prospects. You can use these concepts to build that business case for content marketing:
- Share of the conversations – What percent of online conversations on your product category mention your brand? What percentage of those conversations is from or about your brand? How different is that from your market share? A gap between the two indicates your competition is wooing your prospects before you.
For example, if you have 25% of the sales in a product category, but your digital content only represents 5% of branded conversation online, you are not reaching your online fair share. Your SEO agency or even some of the SEO tools like Semrush can provide you with your online fair share.
- Unbranded search traffic on your website – How many of your early-stage prospects find your company website? Looking at search traffic from brand terms vs. unbranded search terms. If you’re like most brands, you promote too much on your website and need to build a brand publishing capability. If you write more about the trends in your industry, you will not only be seen as an authority, you will attract more unbranded search traffic.
- Banner effectiveness at driving brand visits – If your company spends marketing budget on digital display ads (banners), test the effectiveness of this approach at delivering traffic to your website vs. content marketing.
- Cost of advertising / search landing pages with low organic and social traffic – While advertising landing pages are built to deliver on the advertising message, measure the bounce rate of these pages and the amount of organic search or social traffic these pages receive. Consider building a content marketing experience to serve as the landing page for your advertising. This will deliver “free” search and social traffic on top of your paid ad traffic.
- Cost of organic and social website traffic vs. paid – Content marketing allows your brand to gain additional reach, engagement, and conversion without paying for it. One simple way to calculate this is to look at your average cost per click from paid search. Apply that number to your organic and social traffic to get the value of these visitors.
- Cost of content that goes unused – While this business case applies to any buyer stage, it is often one of the biggest marketing expenses. And any content created and not used is just pure waste.
Goal: Engage new prospects with your brand
If you are not connecting with potential customers at the top of your funnel, you can quantify the opportunity to reach and convert them in a few ways:
- Time spent, bounce rate on content-landing vs. advertising-landing pages – This comparison should reveal how content marketing helps your brand reach early-stage visitors, then engage and convert them to sales.
- Repeat visits and time engaged with your brand – Repeat visitors came back to your site for more. Measure the impact of these visitors by looking at their conversion rates vs. first-time visitors.
- Value per subscriber – Quantify how many prospects you ring into the brand fold so you can market to them. You can quantify their value by looking at revenue or lead value from your email list divided by the number of emails you have in your database.
Goal: Conversions you never would have reached
You need to be able to measure content marketing in quantifiable ways that your business can understand such as leads, sales revenue, and retention:
- Leads and sales from subscribers – Every lead you generate from content marketing can be valued. Anyone who registers for one of your white papers or events can be valued. Every subscriber you generate to build your list can be valued.
- Content marketing ROI vs. overall marketing ROI – Once you identified the detailed data, calculate the ROI of generating these subscribers, leads, and sales vs. the brand’s overall marketing ROI.
- Retention and lifetime value – Measure customers who engage with your content marketing and determine if they spend more or stay longer as customers. Content marketing can serve to deliver more engaged and profitable customers.
You need to be able to measure #ContentMarketing in quantifiable ways that your business can understand such as leads, sales revenue, and retention, says @BrennerMichael via @CMIContent. Click To Tweet
Goal: Revenue from the content
Finally, some brands turn their content marketing from a cost center into a revenue-generating engine for the company. Some examples:
- Selling advertising on your site to partners or other non-competitive advertisers
- Getting sponsors to write your content in exchange for product mentions or external links
- Researching and launching new product offerings to sell your subscriber base
- Selling tickets to an event produced by your business
Not all these approaches are appropriate for every business. But there are examples of brands, even in regulated industries like health care that have succeeded in increasing their content marketing ROI through added revenue streams.
To answer the content marketing ROI question for your business, build a solid case based on a deep understanding of your business. What is your business’ average marketing ROI and how can content marketing achieve a higher return? The answer comes down to understanding your content costs, usage, and performance.
From there, you have a few paths to building a solid business case that will allow you to reach new customers, engage them with your brand in a meaningful way, and then convert them to new sales and long-term relationships that provide real ROI.
Tools mentioned in a post come from the author. If you have a tool to share (your company’s or another’s), please add in comments.
Cover image by Joseph Kalinowski/Content Marketing Institute