You know that content marketing is one of the most valuable marketing strategies you can use for your brand. It doesn’t cost much time or money to get started, and it has the potential to bring an enormous return — but how exactly do you know how much of a return it’s bringing? What if you end up spending more money on it than it’s worth?
Knowing how to calculate the ROI of your content marketing campaign proactively addresses these dilemmas. When you know your ROI, you can make the necessary adjustments to improve a floundering campaign, or identify the most profitable areas of your strategy to focus on in future months. Let’s take a look at how you can calculate the ROI of your content marketing campaign.
The Two Problems With Content ROI
Before I dig in here, I need to address two big problems with calculating the ROI of a content marketing campaign. The first is the long-term nature of content marketing; almost every content campaign begins with a negative ROI, scaling in return as it scales in volume. Accordingly, early measures of ROI should be taken with a grain of salt.
The second is the multifaceted benefits that content marketing can offer, some of which are almost impossible to objectively calculate. For example, it’s hard to find a numerical value for your brand’s reputation, but any improvements here can (and will) show up in the form of additional sales.
Accordingly, when you finalize your ROI calculations, you’ll need to compensate for these two obscuring issues.
1. Calculate Your Spending
Your first step is understanding the “investment” side of the “return on investment” equation. Take a look at what you’re spending on your content marketing strategy, and try not to leave stones unturned here. If you’re merely enlisting the help of a content marketing agency, this is a straightforward cost. However, if you’re using multiple contractors, or if your full-time employees are engaging in work relating to your content campaign, you’ll have to calculate their costs in terms of time and salary. Ultimately, you’ll want to come up with a regular estimate; for example, how much you pay for content marketing in a given month.
2. Calculate Conversion Value
The biggest piece of the ROI puzzle is how much money your content is bringing in. The best way to calculate this is through your on-site conversions. First, you’ll need to establish the value of a conversion, which can be very simple or very complicated based on how your business presents conversions. For example, if you offer purchasable products, all you’ll have to do is calculate the average purchase price, but for businesses with more complex sales cycles, there’s no direct calculation here. Then, figure out how many conversions you’re getting in a given month. We’ll be adjusting this figure in the next step.
3. Calculate Traffic Impact
Now, you’ll need to take these conversions and narrow them down to those completed by people affected by your content marketing strategy. For starters, almost all your organic traffic (from search engines) will be at least indirectly related to your content marketing strategy; your content attracts inbound links which increase your domain authority along with search engine visibility. Your referral traffic, too, is likely the result of your off-site content strategy (whether you know it or not); you can filter this out by traffic source if you need to get specific here. Plus, if you use content in your social media campaign, you can count most (if not all) of your social traffic too.
By the end of this step, you should have a figure for total monthly conversions attributable to your content campaign. Multiply this by your average conversion value and you’ll get a total for your direct monthly content marketing benefits.
4. Consider Qualitative and Peripheral Benefits
That objective figure isn’t the end of the line, however. You’ll also need to account for peripheral and incalculable benefits that your content campaign offers, such as:
· Brand visibility. Merely having your content featured in an external publication means more people will become aware of your brand, regardless of whether they click through to your site. They may, for instance, visit your site directly in the future, or be more likely to click through when they see your brand again.
· Brand reputation. As you gain more readers, followers, and relationships with bigger publishers, your reputation as a brand will grow. This makes it more likely for visitors to trust your brand (and convert) in the future.
· Customer retention. Your content is also responsible for keeping your current customer base loyal and satisfied, especially if a wing of your content strategy is dedicated to customer service. The degree of this influence is hard to measure.
· Future value. Finally, don’t forget that what you’ve measured so far is only a snapshot in a long campaign. Consider the future value of your present efforts as well.
Pulling it All Together
As an estimate, you can compare your monthly costs against the monthly objective benefits of your content campaign to determine your final “content marketing ROI.” However, the peripheral benefits and complicating factors make it hard to cement this figure as a precise calculation. Instead, use it as a guide to move forward; are you seeing more referral traffic than organic traffic? Are you spending too much or not enough in certain areas? The more you learn about your campaign and the more you’re willing to adjust, the better results you’ll see in the future.
For more content like this, be sure to check out my podcast, The Entrepreneur Cast!