3 Quick and Dirty Calculations for Measuring Your Content Marketing ROI
Content marketing is king when it comes to driving traffic and sales. But do you know how to track and measure the ROI of your efforts? If you’re like most marketers or business owners, this is probably a struggle. According to the 2015 B2B Content Marketing report, only 21% of marketers say they are successful at measuring their content marketing ROI.
This is a worrisome statistic given the costs associated with content marketing. How do you know if what you’re doing is working? And how do you know if it’s worthwhile to continue?
There are a number of challenges when it comes to calculating content marketing ROI:
· Putting a dollar value on ‘soft’ metrics like number of fans or followers, engagement levels, brand awareness, etc.
· Knowing exactly how a new customer or client found you (word of mouth can be difficult to track!)
· Calculating the cost of content creation. For companies that outsource their content creation and management, this is relatively simple. However, in smaller companies where employees wear multiple hats, this can be a challenge.
· While conversions will always be part of calculating ROI, not all conversions are equal. This begs the question: do you track ROI based on each piece of content, or on your content marketing strategy as a whole?
If any of these challenges sounds familiar, keep reading. This article will suggest 3 simple calculations for determining the ROI of your content marketing efforts.
Strategy 1: Calculate the value of your organic website traffic
Marketing and sales strategist David Meerman Scott suggests calculating how much you would need to pay to drive your current level of organic website traffic using Google AdWords. In other words, assuming you weren’t ranking in organic search for any of your current keywords, how much would you need to pay Google to get your current levels of traffic?
One of the drawbacks of this strategy is that it only takes into account your website content; it doesn’t factor in social media content, email content, etc. However, since the majority of your content will be in the form of blog posts, this strategy will get you pretty close to an accurate value.
Scott Severson of Brandpoint tested this strategy with the company’s own clients to see what the average ROI was. Here’s what he found: The average client broke even with their content in about 9 months, and saw a 200% increase in ROI from that content within 36 months.
Strategy 2: Calculate ROI on a per sale basis (better for big-ticket sales)
This is a strategy that, to be honest, won’t work all that well for companies that sell a high volume of low-cost products or services. The very act of trying to calculate ROI on thousands of $5 products would plummet your ROI through the floor!
For companies that specialize in big-ticket items or services, however, this strategy can be very useful. Contently lays out their own strategy for using this technique, which is based on this very simple, common sense calculation:
Content revenue — content cost = content ROI.
This strategy relies on one key capability: tracking exactly which content leads to sales. For many businesses, this will be the primary challenge in implementing this strategy. However, if you are able to do this, either through tracking goals in Google Analytics or through surveying your clients, this may be the best strategy for you.
Here is a breakdown of how Contently used this strategy to determine the ROI for acquiring one particular client:
· Future client reads 2 Contently blog posts. Cost for writing posts: $700
· Future client reads 2 more blog posts. Cost for these posts: $700
· Future client fills out lead form, and then reads 2 case studies on the Contently website. Cost for these case studies: $900
· Phone call with sales team (this cost is calculated into the ROI for sales, not content)
· Sales team directs future client to a piece of content to help dispel her concerns about partnering with a vendor rather than keeping content creation in house. Cost for content: $350
· Future client becomes current client! The sales process is complete. Total revenue from contract (attributable to content, not sales efforts): $41,000
The final calculations were as follows:
Total revenue from content: $41,000
Cost of content: $2,650
Content ROI: 15.5x
Strategy 3: Calculate ROI on a per-campaign basis
If you’re running specific, targeted content marketing campaigns — for instance, creating a series of blog posts, and then promoting them via social ads — you can calculate your ROI for each individual campaign.
This process is made much easier by using Fractl’s Content ROI Calculator. The calculator assumes you’re able to provide data on each of the following:
· Total cost of campaign
· Website traffic generated
· Number of social shares
· Number of links
· Number of major media placements
In addition, the tool asks you to enter the estimated dollar value of each of these metrics for your business. Some tips for calculating these values:
Website traffic generated: Calculate how much it would cost you to purchase this traffic through Google AdWords.
Number of social shares: If you don’t know the value of a social share to your business, you can simply input $2.56, which some research suggests is the average sale resulting from one social share.
Links and major placements: You will have to use your own judgment and experience for these. You can use the tool’s default settings ($20 per link and $200 per media placement), but keep in mind this will result in a very conservative cost per campaign.
A sophisticated ROI calculation will probably go beyond the three strategies noted above. However, sometimes you just need a quick and easy calculation to know whether you’re on the right track with your content marketing efforts. Hopefully this article has given you the guidance you need to do this!