Content Marketing World is part of the Informa Connect Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Determining content marketing ROI

Screen Shot 2016-03-15 at 3.23.13 PM

Opinions for how to measure the return on investment (ROI) for content marketing are a lot like belly buttons — e­verybody has one. The part I see few people talk about is how to measure ROI itself (and for good reason — math).

Of course, you can measure the return on any investment rather easily and most business schools and investment firms agree on the following ROI formula:

Screen Shot 2016-03-15 at 3.35.01 PM

The outcome is expressed as a percentage, so 0.5 is a 50% ROI, 1.0 is 100% ROI, etc. See, it’s not that bad.

Let’s try an example

Say you bought 10 shares of Joe’s Orange Soda (NYSE: JOS) at $10 each, so your total investment was $100. Joe’s is now worth $20 a share, so your shares are now worth $200. Still with me? Let’s see what the ROI of your investment in Joe’s Orange Soda was:

 

Screen Shot 2016-03-15 at 3.35.09 PM

So, as a percentage, 100/100 = 1.0 or 100% ROI, which makes sense because you doubled your investment. Well done!

Now that we know how to calculate ROI properly, let’s apply it to content marketing.

A great way to measure content marketing is to create a pilot. This is a specific set of tactics that can be isolated so other factors (what scientists call variables) won’t get in the way and confuse things as you learn.

A pilot may feel a bit like a campaign, because it has a start and a stop, but that’s just for the purposes of proving the value of content marketing (what those same scientists call a proof of concept). Be sure to communicate that content marketing won’t really ever end so people understand how it’s different from a traditional campaign (especially the people who control the budgets).

Pilots are great when you’re just getting started. But, if you’re already creating content and are being asked to justify your ROI, there are ways to do that without the formality of a pilot.

For example, as David Meerman-Scott proposes, you can measure the value of the content you create by quantifying the traffic your content brings in by comparing it with something where the cost is determined, like pay-per-click (PPC) ads.

He suggests you identify keywords for each piece of content you want to measure, then find the value of those keywords in PPC advertising and multiply the traffic your content is driving by the cost per click to see how much value your content investment is bringing in. As we learned, the ROI would simply be the current value of the content, minus the cost to create it, divided by that same cost.

Let’s say you spend $5,000 a month creating blog posts and have identified a couple of key words for each post based on its message. By looking up the cost for those keywords, using something like Google AdWords, and multiplying that by the traffic your content generates, you can determine the current value of your content each month.

Suppose that value is $7,500 a month. Your investment of $5,000 (creating content around the keywords important to your business) earned traffic equal to $7,500 worth of advertising. So the ROI would be the current value ($7,500) minus the initial investment ($5,000) divided by the initial investment ($5,000). Like this:

Screen Shot 2016-03-15 at 3.35.19 PMYour ROI would be 50%, which is quite good (even though we made the whole thing up).

Time is also an important factor in any measurement. Make sure you account for the passage of time and consider the future value of money if you are measuring over an extended period (more than a year). People with letters in their titles (CEOs, CMOs, CIOs and CFOs) will be impressed if you can talk about things like net present value, as well.

And there’s another great benefit of content marketing that needs to find its way into your analysis — the content you create is yours to keep and likely will continue to pay dividends to your brand for years to come by continuing to drive traffic.

Now that you know more about return on investment, don’t you think it’s time to invest in your own career? We think so, too.

Measure your way to Cleveland this September and take in sessions from the experts, including Beyond Simple Numbers: ROI Through Data and Analytics with Ayat Shukairy…and more.

Ready to sign up? Let’s head on over to the Content Marketing World 2016 registration page right now and get started! Don’t forget – code BLOG100 saves $100!


Comments

  1. Peter Kelly says:

    Nonsense. This presumes the value of a click thru from a blog is the same value as a click from paid search. It is not.

    • Mike Myers says:

      Thanks for your comment. I tried to keep it relatively simple here, but would love to hear your thoughts on the difference in value between a click from a blog versus from paid search. Do you have advice on how much better one is than the other? Thanks again!

      • Peter Kelly says:

        It’s a matter of intent. When someone has searched for a product or service; been engaged by an ad to the extent they click on it; there is a fair chance of conversion. In some cases and in my experience this can be a 30% chance. If someone had found their way onto a blog; there can be 1001 reasons how that happened – in many cases it can be by accident or they live in another continent to where you do business . If it were from organic search and it were from a “transnational” keyword/phrase – unlikely, but great; but I doubt the blog page would convert like a dedicated landing page. In my sector, debt resolution; a finely engineered click from paid search is worth many times that of an organic click to a blog.

  2. Organizein Losangeles says:

    I don’t comment on blogs much, but your blog is so convincing that I couldn’t stop myself from commenting. You’re really doing a great job. Congratulations and thanks for sharing such lovely tips with us.

  3. A CT from a blog is worth much more than a CT from an ad –for organic search and for likely conversion. In the same way an editorial in the FT is worth more for credibility than an ad in the FT. Earned attention beats bought attention.

    • Mike Myers says:

      Thanks for the comment! I don’t disagree with you, but the challenge here is in quantifying the difference, right? What are your thoughts around how much more earned attention is worth than paid? I would love to hear. Thanks again for your comment.

  4. Hi, Mike, Having worked in advertising & PR agencies before the Web,I recall the metric used was something like an average editorial is worth 5X an average ad. And even more if it’s a positive piece in the NYT or FT — that’s gold dust and can’t be “bought” in any paid media campaign so it’s impossible to come up with a yardstick in cases like that.

Comments are closed.


FOLLOW CONTENT MARKETING WORLD ON SOCIAL