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Back in 2012, Kapost published this free white paper about content marketing ROI and revealed that per dollar, content marketing produced three times more leads for large companies when compared with other methods.
Five years down the track, content marketers are still seeing a huge return on investment. Content marketing costs 62 percent less than traditional marketing and still generates three times as many leads per dollar. Content marketers also boast conversion rates that are six times higher than those enjoyed by their content-spurning peers.
The message is clear: if you stick to it (i.e. regularly produce and promote high-quality content), your ROI on content marketing is very good. But how do you measure it? And why should you? Let's start with the latter question.
Why you should measure content marketing ROI
It may seem like a silly question, but many businesses do wonder if and when they should be measuring their ROI on content marketing. Isn't measuring site traffic, social media likes and sales leads proof enough?
The answer is yes and no. Yes, tracking your key metrics is important for keeping an eye on how your content marketing activities are performing. But that alone doesn't give you a sense of how much value those efforts are adding to your overall marketing strategy, and it doesn't tell you how much you're earning as a result of those efforts.
If you've set SMART goals, it's easy to measure and assign a monetary value to your content marketing activities. This will help you determine the overall content marketing ROI, which is a powerful tool for:
- Getting your marketing plans approved;
- Building a compelling business case for content marketing;
- Enabling more productive sales conversations; and
- Getting leadership to buy-in to content marketing!
Your key stakeholders might not get in the ins-and-outs of your content marketing strategy, but they do understand ROI. And you know better than anyone else that the key to influencing people is to speak their language.
How to measure content marketing ROI
There is no single, foolproof strategy for measuring your content marketing ROI; it depends on the goals you've set and what metrics you're tracking. Establishing a mathematical correlation between what you've spent and the revenue earned because of that spend is tricky business, but it can be done.
Here's a very basic method for calculating content marketing ROI:
- Calculate your spend. This is the 'investment' part of the equation, and should include everything from the cost of your marketing team (or marketing agency) to the cost of your various tools and platforms.
- Calculate the value of conversions. This is the 'return' bit, and how you calculate it depends on how your business converts leads. If you run an e-commerce site, you can measure your on-site sales. If you have a more complex sales process, you could look at things like form submissions. The basic idea is to identify how many conversions you've had and how much you've made from them to generate an average conversion value. We did say this would be tricky.
- Isolate those conversions. The aim in this step is to identify how many of your conversions were impacted or generated via your content marketing channels. You can do this by looking at metrics like organic traffic and referral traffic (including social media referrals if you're into that, which you should be). You should be able to come up with a number of conversions that you can attribute to content marketing; multiply this by your conversion value (see Step 2) and voila. Content marketing ROI.
Make it your own
This is an overly-simplistic method for calculating ROI, but it's a start. You can also consider metrics like customer retention, future value (i.e. how much you can earn) and brand visibility. The point is to assign a value to the leads generated from content marketing and contrast that with your spend - but how you do it is largely up to you. Find a method that fit your business and your sales process.
Here are some additional resources to help you measure content marketing ROI:
- Jay Baer's guide to the 4 types of content marketing metrics
- How to create a benchmark to measure content marketing ROI by HubSpot
- How we calculate the ROI of our content marketing (a creative look at how Contently ties content to the sales funnel)
A necessary evil?
Measuring and reporting on ROI isn't always fun, but it's essential for showcasing the valuable fruits of your labour. Whether you want to secure additional investment in content marketing, get your marketing plans approved or just generate enthusiasm for your work, you need to be able to prove that it's making money.
Do you have your own method for calculating content marketing ROI? We'd love to hear about it! Share your thoughts with us on Twitter or leave a comment below.