Measure your content marketing ROI
Continuing our theme of measuring ROI, content marketing is another digital marketing tactic that marketers often struggle to measure impact.
Whilst there is no doubt that marketing tactics have come a long way from the “spray and pray” days where you would just do a bunch of things and hope for the best, measuring the success of your content marketing activity can still be challenging.
In a 2020 survey, CMO found that 65% of marketers can’t quantitatively demonstrate the impact of their marketing. In the same year, a CMI report showed that 44% of marketers said that improving their content measurement was a top priority, demonstrating that marketers recognise that they are falling short in this area.
What is content marketing ROI?
A quick recap before we dig into content marketing ROI in case you missed our last post. ROI stands for Return on Investment and is a calculation of the revenue you gain from whatever channel you are measuring minus what you spend on that channel.
More specifically, content marketing ROI is a percentage that shows how much revenue you gain from content marketing compared to what you spend on creating and distributing content.
You should try to be as accurate as possible when it comes to measuring those costs and take into consideration all staff time, any outsourced work (e.g. design), and any promotion costs (e.g. social media advertising).
At Digital Hothouse, we put a lot of emphasis on ROI for our clients. We want to demonstrate how much they are getting in return for the investment they make in our services. Sometimes this can be at the very top level – typically, revenue from organic minus the cost of our services – however, we also like to measure the impact of specific activities so we may break this down to show the value of content marketing, local SEO or any social media activity.
ROI is said to be one of the most important measures of successful content marketing as it is directly tied to revenue. At the end of the day, that is the figure that most of our clients care the most about.
Measuring content marketing success is about more than just revenue
Of course, there is more to measuring the success of content marketing than revenue alone. In fact, measuring the impact of your content marketing on the overall revenue for your business can be tricky. Content marketing is, more often than not, a lead generation tactic. An opportunity to introduce potential new customers to your brand.
Of course, a solid content marketing strategy will include different pieces of content targeted at different phases of the buyer journey, however, we have found that the majority of content is targeted at the top of the funnel, and therefore, measuring the impact of that content when it comes to revenue can be tricky.
When reporting revenue, typically on a monthly basis, most businesses will use the default last-click attribution model. In other words, where did the visitor come from just before they made a purchase (organic, paid, email, direct etc). This is fairly standard reporting and there is nothing wrong with this model, however, it does fail to consider the journey a customer might have been on in order to make it to that final purchase and often, content marketing activity falls right at the start of that journey and is not recognised at the end.
Businesses can play around with different attribution models in order to more accurately reflect the journey people take and attribute the revenue generated from that journey to different sources along the way.
This Contently piece about the ROI of content marketing includes a really great section at the end about multi-touch attribution – a model that factors in all actions a customer takes over the course of the sales cycle, divvying up the credit on a weighted scale. For example, a multi-touch attribution model may give double credit to the first and last touch in the cycle and equal weight to the other touches in between.
There are other attribution models that look only at first click for example and in these models, content marketing tends to score much better in terms of generating revenue.
However you choose to report, be consistent and be true to yourself and the value you place on the content you are creating. Understand that just because someone read an interesting article doesn’t mean that was the only reason they ended up making a purchase from you three months later. Also appreciate that the piece of content was a huge contributing factor, especially if they had never heard of your brand before.
Measuring your content marketing
Whilst our ultimate goal is to measure the ROI of our content marketing efforts, there are other metrics that can be used to measure the success of our content marketing.
It’s important to define from the start what success means and how this will be measured. Just because you can measure something doesn’t mean you should. You need to be clear about what success looks like for your business and this can significantly differ from business to business and content piece to content piece.
Defining KPIs (Key Performance Indicators) for different types of content pieces is important. The Content Marketing Institute has pulled together this super-handy guide to the potential KPIs for each type of content piece:
As you can see, most of these KPIs are not directly linked to revenue – they are simply indicators of performance and not all might be relevant to your overall business objectives so it’s important to identify the ones that are most relevant to you and your business.
As you’re putting your measurement program in place, decide how frequently to collect data. Collect too often and you may not allow enough time for patterns to appear. But wait too long and you risk overlooking problems that could prevent your content from reaching its goals.
Jodi Harris of the Content Marketing Institute recommends tracking performance on a monthly basis initially, then adjusting your timeline later, if necessary.
You can create a dashboard to monitor all of the information in one place or a simple spreadsheet or Google Sheet will also do the job.
KPIs are an important step in understanding the value of your content and helping to refine your content strategy and planning, however, the metric that is going to impress the C-Suite the most is ROI.
To calculate the ROI, you’ll first need to estimate the baseline costs involved in creating, distributing and promoting content in your organization. You’ll need to factor in both average production costs — such as copywriting, design services, and marketing tools and technology — as well as team overhead and administrative costs.
A more straightforward way to demonstrate business value is by calculating the return on investment of each campaign. Rather than factoring in your business’ overall cost of delivery, simply calculate Marketing Dollars In (expenses) and Marketing Dollars Out (revenues). Then calculate your per-campaign ROI as:
ROI = (Revenue – Expenses) / Expenses
After you’ve done this for each of your marketing campaigns, consolidate the revenue and expense amounts across all channels to get your overall marketing ROI.
How you get to the revenue dollars is down to you. Try playing around with different attribution models in Google Analytics until you find one that you think presents a fair representation of the part your content plays in leading a visitor to a conversion. First and last-click attribution models both have their flaws so try playing around with the different models such as linear or time decay or position based which may give you a more realistic value of the part your content piece played in driving a conversion.
Determining the ROI of your content is not always straightforward and whilst the above examples should help, we are happy to jump on a call or arrange a meeting to discuss how you could be getting more out of your content marketing and demonstrating that value to your C-Suite.