Many businesses have realized the potential of content marketing for getting clients, building brand authority and driving sales. And yet, marketers are under pressure to validate their content marketing efforts using financial formulas. Like any other marketing efforts, they are expected to provide ROI figures to their bosses to get the required resources for their content marketing campaigns.
Research has, time and again, indicated that great content drives purchase decisions. 85% customers rely on content from trusted experts to influence their buying decisions. More than a third of B2B buyers find information about various offerings from a seller’s website before making a buying decision. This has led to a rise of over 30% in content marketing budgets (between 2013 and 2014).
Content marketing drives efficiency and growth
A Forrester report titled “Marketing and Media Efficiency Outcomes Drive Content Marketing” finds that content marketing drives bottom line efficiency and top line growth. This report throws up many interesting observations. Contrary to popular belief, brands are using content marketing strategies to actually reduce the amount of content they produce, and focus more on planning and creating a lesser number of high-quality content assets that they will find easier to manage.
Brands are also using content marketing to improve brand loyalty as is evident from Patagonia’s Worn Wear strategy that shows stories of customers using its products till they literally fall apart. This helped them strengthen their ties with existing customers and reach newer audiences while promoting the quality of their products and harping on the loyalty their customers have to them.
Building a business case for content marketing
While many business leaders have adopted content marketing to drive their marketing efforts, many marketers still aren’t able to convince their leaders on the value that content marketing provides. The only way to convince executives to adopt content marketing is to build a strong business case that will also include calculating ROI of the marketing efforts.
Many marketers might get carried away into doing content marketing without worrying about its returns. But sadly, it is not the correct strategy. Creating great content and then marketing it requires time, efforts and resources (read dollars!). It makes sense to see if your content is in line with your business objectives and you are getting returns out of it.
GE partnered with BuzzFeed to create branded content and distribute it. Results showed that branded content significantly lifted brand perception as compared to display advertising. When users found GE’s branded content through social media recommendations, 77% respondents assigned a positive attribute to the brand and 138% respondents said they found GE to be “creative.”
There are many examples that prove the worth of content marketing. To build a strong business case, you will need to start with research. Before you can find a way to calculate the ROI of content marketing, you need to find out the costs and ROI of other marketing departments in your company. This will help you to create benchmarks for your program and set your expectations accordingly.
Once you realize what metrics other marketing departments are tracking, you can align the content marketing objectives with company goals. You will need to measure metrics that have a quantifiable value. You need to track metrics that your company leadership cares about.
In an effort to outdo themselves and build an amazing and irresistible business case, many marketers make the mistake of setting unrealistic targets. Set realistic and appropriate goals for your content marketing efforts.
Finally, ask for a realistic budget. Marketing budgets will vary for different organizations. The amount of money allocated to other marketing departments will give you an idea as to how much money your content marketing efforts will get. This will help you to scale your strategy accordingly. The best way is to present a case with goals and budget allocated linked to each other, so that the leadership knows what to expect with a certain budget.
You need a strategy
Any calculation of content ROI would be meaningless unless you define a solid strategy for content marketing. Like every marketing campaign which requires meticulous strategizing, content marketing is no different. Agreed, results of content marketing might not be visible immediately, but its long term benefits are definite and beyond doubt. Your content ROI, in turn, will reveal a lot about your content strategy.
Businesses should realize that their content marketing strategies need to be flexible as goals might change over time. It would be worthwhile to regularly evaluate your strategy to see if those goals are being achieved or not. There is absolutely no point in pursuing a goal and expending time and resources into it if the means to achieve it are not able to achieve it.
Let’s start with the goals
Any strategy starts with a set of objectives to be achieved through a particular campaign. Set your content marketing goals at the beginning. What do you wish to achieve? Let me help you with 5 goals that you MUST have for any content marketing activity.
- Developing brand awareness – A study showed that 74% CMOs listed increasing brand awareness as their topmost priority. With great content, you can create brand authority and showcase your expertise. This develops credibility and customer loyalty.
- Driving website traffic – With all the amazing content that you’ve posted on various platforms, your immediate goal is to get people to your company’s website and push them to the top of your sales funnel. The user will keep on getting great content on the site; you will build a relationship with the user and this will eventually help drive sales.
- Generating sales leads – Your content needs to generate potential leads. These leads can come from your blog, social media, newsletter, etc. You can gain their personal information once they start trusting you enough. You can then use the contact information to slowly drive them through the sales funnel.
- Converting leads into paying customers – This is a critical stage and the quality of your content marketing will play an important role in its success. The leads have come in through the content you’ve generated. Now you need to keep the efforts going to make a sale.
- Retain existing customers and drive upsells – You’ve won the customer but that doesn’t signal the end of content marketing. Now you need to create specific content for customers to nurture the relationship and make them repeat buyers and loyal brand advocates.
Understand the three primaries of ROI – cost, utilization and performance
- Cost will cover the expenditure to create the content and will include writing and design fees and time spent in creating content.
- A study shows that up to 70% of the content a company produces goes unused. This is a waste of resources and time. Track content usage to find out how much content is being used and consumed and how much is not.
- Compare your content’s performance with your business goals. Apart from traffic metrics, look at engagement rates. See if your content is converting leads.
So how do you ensure that your content ROI is maximized?
Businesses need to understand that the ROI of content marketing will always be higher than the average marketing ROI. While trying to calculate ROI of content marketing, get a baseline which is your company’s average marketing ROI.
- Choose the right platforms
There are hundreds of platforms available for distributing content. That does not mean that you should be on each one of them. Choose ones that are aligned with your business goals and stick to them. Another mistake most businesses make is that they create a single piece of content and then promote it on all channels. What they fail to realize that audiences of different channels are different and you have to serve them content that is customized to their needs and the platform.
The best thing you could do is to identify the platforms that are most suited to your business before you set out to create content. That way you can customize it to suit the platform – topic, length, tone, title and so on.
If you are already present on a number of platforms, do an honest audit of which platforms are giving you traction and stop using the ones from which you are not deriving any value.
- Let your users generate content for you!
Why? Because your customers trust fellow customers more. User generated content is trustworthy, is about relationships and it is inspiring. Give a chance to your customers to create content for you to market. Use forums, competitions or other community-building methods to encourage more users to submit content. This saves you time and garners lot of attention.
- Always keep updating your content
When you update content, it serves two objectives – it gives value to the reader who believes that you care for him as you give him the latest content to consume, and it increases your SEO.
With regular updating, you can keep on promoting old content. When you publish something new, you promote it with exuberance. But as time passes, your “fresh” content isn’t that fresh anymore. But if you update it, say “A Complete List of SEO Tools,” with a few more that have sprung up since you last published that post, you can promote it again. You can tell your readers that the list has been updated to include a few more tools and it is out now, so would you like to read it?
You can also look at upcycling old content. Upcycling is essentially a process wherein you take pieces of your old content, add a dash of creativity and relevance and create fresh new pieces of content for different platforms.
- Always keep promoting!
Creating content is resource- and time-intensive. It is invaluable (if it is not crappy!). It is how and how much you promote your content that will determine its ROI. Because what good is great content if it is not promoted? Derek Halpern, an expert marketer explains in his blog on why he spends 80% of his time in promoting his content.
And it is not only about promoting new content; you can also promote old content that you feel can still provide value to your readers. You can do so by reposting it on your social media platforms or tweeting about it every once in a while. Another great way is to set up Google Alerts to find out if people are talking about a topic you wrote about. You can join the conversation and subtly guide readers to your content.
- Make your content better than your competitor’s
To get any positive ROI out of your content, you have to be sure it is better than your competitor’s. This will serve as a baseline on how much quality you need to put in developing your content. Remember, creating great content costs money. So how much money you put in will greatly affect your ROI.
Readers will compare your content with your competition. If they find that it is “better” they will prefer it. If there is no difference in perception, they can go both ways and you won’t see any perceptible difference in ROI.
- Have a sales funnel in place
You need to have a way to make money or else what use is all the great content you created and promoted? You need to have a sales funnel in place which ends with a sale.
It is essential to optimize your sales funnel to give you a clear road as to how you will channel your leads into it and transform them into paying customers.
How do you quantify ROI?
There are tons of articles online that will give you metrics to help you quantify ROI of your content marketing efforts. It all boils down to this – the metrics depend upon your content marketing goals. All metrics can be essentially grouped into these four categories –
- consumption metrics
- lead generation metrics
- sharing metrics and
- sales metrics.
As the name suggests consumption metrics measure how many times your content was consumed through page views, downloads and social conversations. Sharing metrics measure how this content was “shared” by readers with others through likes, shares, tweets, forwards, etc. Lead generation metrics measure how often your content converted a bystander into a “lead.” These could be form completion, email/blog subscriptions, downloads, comments, etc. Sales metrics measure online and offline sales.
Calculating ROI of content marketing
It is clear that ROI of content marketing is not a dollar-for-dollar calculation. It creates long term assets that provide referral traffic and brand authority for the long term future. Content marketing is all about building long term relationships. You are building a business for the long term. With advertising, you can reach a certain number of customers, but with a solid content marketing strategy, you can build a strong brand reputation, credibility, authority, customer loyalty; all of which translates into sales and referrals.
This is not to say that finding the ROI of your content marketing efforts is impossible. There are many ways to do that and it all depends upon what kind of business you are which will affect the kind of metrics you will be using.
Once you have the above mentioned metrics, you can use a calculation method to come up with the ROI of your content marketing efforts. This calculation will also depend upon the type of business and goals set.
The most basic way to calculate ROI is the following equation –
So if you earned $100 from your content marketing efforts and the total cost of producing content was $50, the ROI would be 1 (or 100%).
Another way is to first calculate the cost per content session by the formula –
A comparison of the two values will tell you how much of a return you are getting on your content. For this, however, you will require to know the exact worth of each of your conversions.
Once you are able to calculate ROI of your content marketing, you can calculate many other things that provide value to your marketing efforts and save you money. Take for instance that you were able to drive 1000 visits to a blog post on your website. With Google Adwords, you’d have spent $1000 to get those visits. If you spent only $50 to create that content, you have saved precious dollars.
Content marketing is a long term strategy which gives long term results. To invest in it, marketers and the company leadership require an entirely different mindset than with traditional forms of marketing. Content marketing is a customer-centric approach that offers value while subtly promoting. To adopt content marketing and allocate sufficient budget to it requires challenging the status quo.
CMOs will be comfortable with allocating funds to content marketing only if marketers are able to show ROI of it. To get positive ROI, marketers need a meticulously planned strategy that is robust as well flexible to meet the challenges of a changing environment.