In the world of marketing, content is king. Statistics from the Content Marketing Institute provide it. Around 86 percent of business-to-consumer (B2C) marketers and 91 percent of business-to-business (B2B) marketers use content marketing. But less than 10 percent believe their marketing is sophisticated. Part of developing a sophisticated content marketing system involves analyzing all aspects of your strategy. Marketers do this to establish areas for improvement — especially the results you achieve and the return on your investment (ROI). If your content marketing ROI is less than what you’re spending, it’s time to make a change.
The Importance of Content Marketing ROI
ROI is incredibly important. ROI is a measure of how much revenue your content marketing campaign generated, presented as a percentage. If your ROI is less than the amount you paid into the campaign, then you’re losing money. Failing to calculate your ROI correctly (or omitting it from your content marketing strategy) could result in significant financial loss.
Surprisingly, close to 47 percent of B2B marketers fail to measure their ROI. A further 18 percent are unsure if they do or not. Taking the initiative in your own company and nailing down these figures puts you ahead of the pack.
Calculating Content Marketing ROI
The main reasons marketers fail to measure ROI are because they don’t know how to do it. That’s mainly because they need an easier way to do it. Problems arise when it isn’t immediately apparent how the result of a campaign has affected revenue. For example, if you’ve run a campaign that encourages people to visit a page where they can buy products, it’s relatively easy to calculate how many sales have come from that campaign, and what the return on your investment is.
Conversely, if your campaign were to raise awareness and encourage people to sign up to your newsletter, it may take months before those people convert into customers (if they ever do), and any ROI calculations become more difficult. It’s important to define metrics for success at all stages of your campaign, as you need to know which processes are working even if they don’t have an immediate impact on revenue.
At the simplest level, you need three pieces of information to calculate your ROI for any given campaign:
The cost of the content
This is how much you spent creating the campaign, including the cost of research, your own time, hiring freelancers, shooting videos, and designing graphics.
The cost of distribution
Distribution is how much you spent running the campaign, including costs such as servers, paid promotions, influencer fees, and specialist distribution and analytical software.
The amount of revenue
This is the amount of money the campaign generated. Effectively, you need to add up the total number of sales that you attribute to the campaign. This is the most difficult step, as it may not always be apparent where your sales have come from. But there are ways to make this process easier, such as associating a coupon code with each campaign that your customers should include at checkout.
Your total revenue less your costs is the return on your investment as a dollar value. To convert that value to a percentage, you need to divide it by your costs. For example, if your return after expenses was $3,000, and your costs were $2,000, then your ROI is 1.5, or 150 percent.
Metrics for Calculating Content Marketing ROI
When determining which metrics to use, consider your campaign goals carefully, and select metrics that correlate to your aspirations. Common metrics to help evaluate your success through the marketing process, and for calculating ROI, include:
The aim of content marketing is to produce valuable, meaningful content that people want to see. If you answer a question that a large proportion of people need an answer to, then you improve your visibility. Value-added content has an increased chance of ranking high in searches, attracts more visitors, and helps to build a loyal audience. Determine visibility by studying search position, the volume of traffic to your site, and page views.
In an ideal world, consumers see your content and flock to your site to make purchases. But in reality, it doesn’t normally work that way. Often, your marketing generates leads. These are consumers who have shown a strong interest in your product and are likely candidates for conversion. Determine leads by seeing how many people subscribe to your newsletter, contact your sales team, or use a “wish list” function in your online store.
Building a relationship with potential customers is an important aspect of content marketing. You want to establish yourself as an authority in your subject area, and present content that encourages people to ask questions, follow a call to action, or let other people know about your brand. Determine engagement by looking at likes, shares, comments, and subscriptions.
In most cases, sales are the end goal — and this statistic is the most helpful for evaluating ROI. Calculate sales using metrics such as preorders, orders, revenue, and profits.
Takeaway: The Value of Evaluating
Content marketing has the potential to extend your brand reach and improve your bottom line, with statistics suggesting it generates three times as many leads as outbound marketing, yet costs 62 percent less. But the return on your investment may not be immediately apparent, especially if your primary goal is to improve engagement with your audience, or to develop a database of sales leads. Evaluating the success of your campaign at all stages is an important part of maintaining a well-structured and profitable campaign. Develop systems to qualify and quantify what you do, and stand out from the crowd of 34 percent of B2C marketers and 47 percent of B2B marketers who don’t measure their content marketing ROI. Gather statistics — don’t be one.