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The Ultimate Guide to Content Marketing ROI

By: Compose.ly — March 17, 2020

Is your content marketing strategy working? How do you know?

It’s crucial for organizations to see that the financial investment, time, and effort spent on content creation is worth it. Otherwise, it’s money lost, and nothing gained.

Sales teams and business owners aren’t looking to waste time or funds on ineffectual content that doesn’t increase the bottom line or improve customer relations. You may be doing all the right things to position your brand within your industry, but if your labors aren’t reaping the rewards, it’s time to reassess.

That’s where tracking content marketing ROI, or return on investment, can help.

Whether you’re a newbie or a veteran to developing content marketing strategy, the viability of your organization greatly depends on your understanding of content ROI. This guide breaks down the most salient topics related to content marketing ROI and discusses how to apply them to your business.

  1. What is content marketing ROI?
  2. Why is content marketing ROI important?
  3. Key Performance Indicators
  4. 5 Content Marketing Metrics to Measure
  5. How to Measure Your Content Marketing ROI
  6. Assessing and Evaluating Content Marketing ROI
  7. How to Track Content Marketing ROI
  8. How to Optimize Your Content
  9. Importance of Value-Driven Content to your ROI
  10. Content Marketing ROI vs. Native Advertising ROI
  11. Setting Your Goals

What is Content Marketing ROI?

Let’s start with a definition of content marketing. The Content Marketing Institute defines the term content marketing as follows:

Content marketing is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action.

It’s worth noting two important take-aways from the quote above:

  1. The content created should be valuable and relevant. It’s easy to put out tons of low-effort content, but if it doesn’t have any meaning or bring value to your customers, it’s pointless.
  2. The end goal of content marketing is to drive sales or increase revenue. It’s an effort in futility to put out valuable content that doesn’t reach your audience and doesn’t translate to sales.

Your investment in relevant content should reward you with increased revenue. In today’s digital world, where everyone has easy access to information, content marketing is the mode by which organizations can increase leads, expand sales, and attain loyalty.

In recent years, companies have become acutely aware of the benefits of adding value-rich content to their messaging, marketing, and branding. Content rules supreme to such an extent that 9 out of 10 companies use content as part of their marketing strategy. 78% of marketers cite better, more efficient content creation as the main reason for the increase in their content strategy success.

With those kinds of numbers, it only makes sense to track your content ROI to see if you are producing the right type of content for your audience—and whether that content is translating into conversions and sales.

Why Is Content Marketing ROI Important?

Investing in your content marketing strategy is no longer just something you should do, but something you must do for your company to succeed.

From top to bottom, every level of your sales funnel needs to include compelling content. Having valuable content and a strong content marketing strategy can position you as a leader in your industry. Measuring your content marketing ROI is the best way to see if the content your producing is having the desired effect, which includes increases in:

  • website traffic
  • lead generation
  • sales

Content marketing ROI is vital because it allows businesses to quantify the investment they’ve put into the production of content.

But measuring content marketing ROI is not about a quick turn around or immediate results. It’s about playing the long game.

When you run a campaign, put up a new blog, or post a video, it can often take weeks if not months to get a complete understanding of the numbers and to see if those efforts reached your targeted audience and resulted in conversions.

Key Performance Indicators

So what exactly are you measuring? The answer depends on how you utilize the content to achieve your business objectives.

Maybe you want to measure how many new followers you have on social media, or how many new people have signed up for your newsletter or made direct purchases. These types of measurements are called metrics, and they will help you track key performance indicators (KPIs) such as traffic, conversions, engagement, authority, and SEO performance.

Have a look at this table from the Content Marketing Institute, which shows key content marketing KPIs and the metrics used to measure them.

That’s quite the list. Thankfully you don’t need to measure all of those metrics, but it’s wise to concentrate on at least a few for campaigns or content pieces you want to measure.

5 Content Marketing Metrics to Measure

While the above table shows the abundance of metrics that can be measured, the focus here will be the four important content performance metrics, as described by James Duffy, plus an additional point. They include:

  1. Consumption metrics
  2. Sharing metrics
  3. Lead generation metrics
  4. Sales metrics
  5. Retention metrics

Depending on what content you’re analyzing, you will need to look at metrics obtained from your social media accounts, website, email, and any other channels you may have. Knowing which metrics to use can seem daunting, but it all depends on what you want to measure. Let’s have a look at each category and see which metrics might be best suited for your goals.

1. Consumption Metrics

Consumption metrics are the easiest to understand and can be used to measure traffic and brand awareness. They answer specific questions like: How many people consume your content? To what extent and frequency is your content consumed? Through which channels or platforms is your content being consumed?

Some metrics best-suited for measuring consumption include:

  • Page views
  • Video views
  • Downloads
  • Average time on the website
  • Unique visitors
  • Email open rates
  • Abandonment rates

2. Sharing Metrics

These types of metrics measure the relevancy of your content and will help you gauge brand awareness and engagement.

You’ll want to know if your content resonates with people enough that they want to share it. Sharing metrics can help answer questions surrounding social media and your content. These include: What is the reach of your content on social media platforms? Which materials are shared, and by whom? How frequently is your content shared, and on what channels?

Metrics that measure sharing include:

  • Likes
  • Shares
  • Retweets
  • Forwards

3. Lead Generation Metrics

Lead generation metrics will tell you if your content leads to sales. Use lead generation metrics to measure lead creation, conversions, lead management, and lead nurturing.

Some essential metrics for lead-generation include:

  • Bounce rate
  • Click-through rate
  • Subscriptions (blog and email)
  • Form downloads and submissions
  • Comments on blogs
  • Rate of conversion

4. Sales Metrics

Sales metrics will tell you if your content is contributing to your sales. From these metrics, you can see if your content is impacting the sales funnel negatively or positively.

Key metrics used to measure sales include:

  • Online sales
  • Offline sales

5. Retention Metrics

Your most valuable customers are the ones you already have, so you want to hold onto them. Retention metrics let you know if current customers are consuming and engaging with your content, and whether that content contributes to customer loyalty and securing renewals.

Metrics to use here include:

  • Return rate
  • Pages per visit

How to Measure Your Content Marketing ROI

Now that we know what we want to measure, let’s figure out how to measure content marketing ROI.  Here are the three steps you can use to help calculate the ROI of your content marketing.

Step 1: Determine the Amount of Your Investment

To figure out this number, include all the expenses associated with producing your content. Depending on the size of your company, some of these costs may be related to freelance workers or salaried employees. For employees, break down the cost by the number of hours they contributed to the initiative.

Costs may include any of the following resources:

  • Writers
  • Designers
  • Stock images
  • Advertising
  • Software
  • Video production

Step 2: Know Your Profit

For this step, you will need to calculate the return from your content. This is where content marketing tools that track your metrics come into play. Gather these totals and have them at the ready to perform the ROI calculation.

Step 3. Calculate Your ROI

Use this standard equation to calculate your content marketing ROI for a single piece of content or a campaign.

(Image credit: OptinMonster)

Let’s test out the formula.

If you created a YouTube video that generated $5,000 in sales and it cost you $1,500 to produce, the ROI on your content would be 2.33 or 233%. That means the net value of the video is twice as much as the video cost to make.

Assessing and Evaluating Your Content Marketing ROI

The reason you want to know your content marketing ROI is to make sure money allocated to content is being spent wisely and on the right kinds of materials. Additionally,  you need to know that your content is doing what it was designed to do, that is, raise awareness of your brand, secure interest, and generate sales.

As mentioned before, obtaining numbers from content marketing campaigns can be a slow process. It takes time to see the effects of the content on your audience, and because of this lag in time, it’s not uncommon to see low or even negative numbers in the initial stages of rolling out new content.

But if your ROI continues to bring back low results (percentages lower than 1), take this opportunity to change tactics. Reevaluate your content, your distribution channels, or your strategy.

How to Track Content Marketing ROI

So, where do you get the data to plug into your equation?

There are a plethora of analytic tools and resources that can help you acquire the numbers you need to calculate your ROI. Here are just a few of the different benefits you can gain from these tracking tools:

  • Brand monitoring
  • Trending information
  • Tracking engagement
  • Keyword information
  • Backlink research
  • SEO analysis
  • Website audit
  • Measure user interaction
  • Increase conversions

Let’s have a closer look at some popular tracking tools.

Google Analytics

If you’re running a business, you should already be familiar with Google Analytics.

This free and comprehensive analysis tool can provide you with essential information on your audience, as well as help you analyze, strategize, and gauge the success of your content. You can review information over a range of time or get real-time coverage too.

Here’s a look at the Google Analytics dashboard, where you’ll get an idea of the useful information available on the site.

Clearly presented data like this makes it easy to see how well your content is performing.

Social-Media Built-in Analytic Tools

Use these tools to measure engagement, reach, followers, and visitors. They can also provide detailed insights about your audience and help you gain a better understanding of them.

Tracking Tools

Various tracking tools like these come with a price but also give you more detailed information than you would get elsewhere.

These tracking tools, and others like them, allow you to gain access to a world of data and insights that would otherwise be unavailable to you. With analysis tools like these in your arsenal, you have a more than fair chance to improve your marketing content and thereby your content ROI.

How to Optimize Your Content

Both B2B and B2C marketers use content marketing at rates of 91% and 86%, respectively. These numbers indicate that content is a well-accepted and highly-applied tool. Expectations for content to perform are high, so, to get the best ROI on your content, you will want to produce valuable and relevant pieces.

Content can take the form of any product that you think can be useful and relevant to your audience. Make sure you have a good understanding of your audience, their pain points, and the solutions they need before you dive into content creation.

Also, realize that not all content is equal. Certain types of content are in high demand and often outperform others. Some of the top-performing content tactics you can use for content marketing include:

  • Blogs
  • Videos
  • Infographics
  • Case studies
  • eBooks
  • White papers
  • Checklists
  • Interviews
  • Social media posts
  • GIFs and memes

Importance of Value-Driven Content to Your ROI

The power of content marketing is undeniable, and the countless number of reports and articles written only prove that it is an unstoppable force. Have a look at just a few of the statistics obtained from a report done by Demand Metric.

  • Compared to traditional marketing, content marketing generates three times as many leads
  • Content marketing is 62% less expensive than conventional means of advertising
  • People are 60% more likely to seek out additional information about a product after reading content about it
  • Customers feel up to 82% more positive about a company after reading customized content
  • Custom content is considered useful among 90% of consumers

Findings like those above signal to marketers and business owners that well-done content can build relationships with customers, drive leads, and ultimately generate sales.

Content Marketing ROI vs. Native Marketing ROI

Does the onslaught of content marketing and its lucrative rewards leave native (or paid) advertising behind?

Not at all. Native content can work alongside content marketing to produce a robust ROI.

Native Advertising

Native advertising, as defined by Outbrain, utilizes “paid ads to match the look, feel, and function of the media format in which they appear.”

Here’s an example of a paid ad from a Facebook feed to illustrate the point.

It looks like organic content but has actually been paid for by the advertiser in hopes of reaching a greater audience.

Usually utilized on third-party sites like social media channels or web pages as recommended content, paid advertising gives business owners and marketers the quick turn on ROI they crave.

Native advertising is a direct way to drive brand awareness and engagement, but it can be costly depending on the publisher and channel you use. Creating an ad for a publisher can cost anywhere from $70 when working with lower-tiered companies to $200,000 for higher-tiered companies.

But what paid advertising allows you to do is get results quickly. Aside from the initial investment in the content, you also pay every time someone clicks your ad. Pay per click (PPC) allows you to measure how many people have looked at your ad, engaged with it, and if those click-throughs resulted in sales.

How Does Native Marketing ROI Compare to Content Marketing ROI

Native advertising works better than more traditional types of ads.

The Native Advertising Institute reports that people look at native in-feed advertising up to 53% more than conventional banner ads. Yet, 70% of buyers would rather learn about a company through articles than through ads. Using both native marketing strategies and content marketing strategies is the only way to satisfy both preferences.

Native advertising is effective at driving traffic to your business. When it comes in the form of relevant and valuable content, that makes for a winning combination. But if your budget doesn’t allow for such a pricey expenditure, you can still fare well with content marketing alone.

Setting Your Goals

Your content should always have a purpose, and that purpose should coincide with your company goals.

Having business objectives in place will inform what metrics you want to measure and if your content is meeting those goals. The items below are just a few of the key marketing goals that you should consider when developing content.

Brand Awareness

Creating exciting and purposeful content for this objective allows you to be seen by potential leads, solidifying your place among industry competitors. Brand awareness is considered one of the most important goals of marketers.

Thought Leadership

Now that you’ve been seen, you’ll want to be heard. Content developed with thought leadership in mind positions you as an authority or an influencer in your industry and can help you stand out from the crowd.

Brand Loyalty

Loyalty is as critical for B2B companies as it is for B2C companies. Producing trusted content that your existing customers can rely on is essential for retaining them and adequately addressing their needs.

Engagement

Get close to your targeted audience. Create content that lets customers get to know you, your brand, and your messaging.

Lead Generation

Now find out more about your customers. Provide lead-generation content that lets you know who is consuming your content and where their interests lie.

Lead Conversions

This is where you’ll get to find out if all the content you created throughout the sales funnel has paid off. At this level, trusted and relevant content may receive the ultimate reward of conversion.

Final Thoughts

According to a survey by the Content Marketing Institute, only 47% of organizations measure their content marketing ROI. That’s a missed opportunity for a staggering amount of companies—don’t let your business be one of them.

The fact is, content marketing isn’t going anywhere soon. It continues to be a prominent strategy in lead generation, lead maintenance and nurturing, brand authority, and sales. So why not get the most out of it? Plan to increase the use of content in your business—but make sure it’s relatable, usable, and aligns with your company objectives.

Use the tools on your channels and other analytic resources to obtain metrics that will help you strategize, set goals, and market your content. Then determine your content marketing ROI by utilizing the simple ROI calculation provided in this guide. With a clearer picture of your content marketing ROI in your back pocket, you’ll be steps ahead of the competition.

This article was written by Compose.ly writer Sophia Murphy.


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