You’ve probably heard it said that “content is king” when it comes to online marketing.
That’s because high-quality, well-written, informative content can help attract and engage potential customers, build trust and credibility, and drive conversions.
But what’s often missing from the equation is a discussion of content marketing ROI – or how to measure the return on investment on content marketing efforts.
There are many ways to determine content marketing ROI, but before we get into that, let’s take a step back and look at what ROI is and why it matters.
Content Marketing ROI
“ROI” stands for “return on investment,” a way of calculating the profitability of an investment – in this case, content marketing efforts of any business.
Therefore, content marketing ROI is the return on investment you get from one’s content marketing activities. Content marketing ROI is important because it helps you to understand how effective your content marketing performance is in relation to the amount of money that you have invested.
Interestingly, there are a number of different ways to calculate it, but the most basic formula is:
ROI = (Net Income – Cost of Investment) / Cost
In other words, ROI measures how much income or return from investment in content marketing activities minus the cost of those activities, divided by the cost.
For example, let’s say you spend $100,000 on content marketing in a month. From that investment, you generate $200,000 in return.
The ROI would be: ($200,000 – $100,000) / $100,000 x 100 = 100%
So, in this case, the ROI is 100%. That means you’re generating an additional dollar as income for every dollar spent on content marketing.
If there are doubts about things to include in the calculation of the ROI, a good rule of thumb is to think about anything that goes into producing and distributing the content, such as:
- Writing or creating the content itself
- Editing and proofreading
- Tools for content marketing
- Publishing or hosting the content
- Promoting and distributing the content
- Measuring and analyzing the results
- And anything else that’s involved in the process
Make sure to have Google Analytics set up to track traffic from the website to the content accurately. That’s because Google Analytics is very handy in determining which pieces of content are most successful in attracting an audience and what topics they’re most interested in.
It’s also useful for understanding how people interact with what’s on the website after they’ve read the content. It provides deep insights into the changes needed to improve the user experience.
Once you have google analytics set up and can track organic traffic from the website to your content, you can start calculating the content marketing ROI – easy
After calculating the ROI, use that number to compare the profitability of different content marketing successes, activities, and strategies and decide where to allocate resources going forward. This way, you can continue to invest in and improve upon what’s working for your business.
6 Reasons Why Content Marketing ROI Matters
When content marketers don’t track and measure the ROI of their content marketing efforts, they simply won’t know whether or not they’re actually paying off.
And if they don’t know whether or not their content marketing is working, they could be wasting time and money on activities that aren’t actually helping you achieve their business goals.
So, why does it matter after all? Here are six reasons:
1. Improved Decision Making
With awareness of how much profit your content makes, you can more efficiently use your resources by making smart decisions on where to invest time and money in the future.
For example, let’s say you’re trying to decide whether to produce more blog posts or create more videos. If you know that each blog post generates $100 in revenue on average, but each video generates $500, then it’s a no-brainer – you should create more videos.
2. More Accountability
Measuring ROI holds content marketers accountable for their actions and ensures they produce profitable content.
Having high website traffic and social media engagement is not enough. The content must ultimately drive profits for the company. With this, content marketers will be motivated to produce content that generates revenue for the business.
3. Better Budgeting
To maintain or increase your budget, you need to be able to justify your expenses – and that’s where content marketing ROI comes in.
Suppose you show that a content marketing program generates a positive return. In that case, it will be much easier to convince decision-makers to give the needed resources to continue doing what you’re doing.
4. Setting Realistic Goals
Measuring ROI helps set realistic goals for content marketing strategies and campaigns. It can clearly show whether or not a campaign is successful and if it needs to be tweaked or improved upon in the future.
It will make it possible to measure progress toward reaching specific business objectives, such as increasing sales or website conversions. Usually, setting specific and measurable goals is a crucial step in successful content marketing.
5. Competitive Advantage
Competitive advantage is said to be achieved when a company can successfully offer the same or similar products or services as other businesses but at a lower cost or higher profit. Businesses that don’t bother to calculate their ROI are flying blind when it comes to making decisions about their content marketing strategy.
So, understanding your content marketing ROI can help compare and analyze how your performance stacks up against competitors in the industry. This can give any business a competitive edge and provide insights on where to improve for future success.
6. Better Demonstration of Value
Measuring ROI allows content marketers to demonstrate the value and impact their efforts have on the overall success of a business. This can be crucial for securing buy-in or budget from higher-ups in the company.
In essence, tracking ROI helps justify the time and resources spent on content marketing.
What’s more? It can also attract potential investors or partners as they will be interested in the profitability and success of your content marketing efforts.
How to Calculate Content Marketing ROI
There are several ways to calculate content marketing ROI. What determines the best pick depends on the set goals and objectives.
Here are three of the most common methods:
- Revenue per visit
- Cost per lead
- Sales conversion rate
Let’s take a closer look at each one.
1. Revenue Per Visit
If the goal is to generate revenue directly from each content, then it is crucial to focus on calculating the revenue per visit.
Meaning: Revenue per visit means calculating the amount of revenue that content generates for each person who visits your site.
Usefulness: This metric is useful if the objective is to generate revenue directly from each content.
Calculation: To do this, simply divide the total revenue generated from the content by the number of visits to that content.
For example, if your blog post generated $500 in sales and received 5,000 page views, your revenue per visit would be $0.10 ($500 / 5,000).
2. Cost Per Lead
The focus should be on cost per lead to generate leads instead of sales.
Meaning: Cost per lead means calculating how much it costs to generate a lead through your content marketing efforts.
Usefulness: This metric is useful if the goal is to generate leads from the input in marketing any content to your target audience.
Calculation: To calculate this, divide the total cost of your content marketing efforts by the number of leads generated.
For example, if you spent $1,000 on creating and promoting a white paper and it generated 100 leads, your cost per lead would be $10 ($1,000 / 100).
3. Sales Conversion Rate
You’ll want to look at your sales conversion rate if you’re using the content to drive conversions further down the sales funnel.
Meaning: Sales conversion rate means calculating the percentage of leads who become paying customers.
Usefulness: This metric is useful if your goal is to convert leads into customers.
Calculation: To calculate this, take the number of conversions (i.e., sales) and divide it by the number of views or visitors.
For example, if your landing page received 1,000 views and resulted in 10 sales, your conversion rate would be 1% (10 / 1,000).
Calculating ROI can be a complex process, but it’s important to do if you want to ensure that your content marketing efforts are profitable. By using one of the methods described above, you can better understand how your content is performing and make necessary changes to improve your results.
The Best Content Marketing Metrics to Track
Content marketing metrics are key performance indicators used to track, analyze and optimize the effectiveness of a content marketing program. In simple terms, they are a way to measure how well your content is performing.
There are several different metrics to adopt in measuring the success of your content marketing program.
These are:
Engagement Rate
Engagement rate is a metric that measures the number of people who have engaged with your content in relation to the number of people who have seen it.
This could be the number of likes divided by the number of views, the number of comments divided by the number of views, or the number of shares divided by the number of views.
It is important because it helps content marketers understand how engaging their content is in relation to the size of your audience.
This, in turn, is needed for content’s social media engagement.
Reach
Reach is a metric that measures the number of people who have seen the content you create. This could be the number of people who have seen your post on social media, the number of unique website visitors, or people who have received an email campaign.
Reach is important because it helps you understand how far your content is spreading and how many people see it.
Virality
Virality is a metric that measures the number of times one’s content has been shared as it relates to the number of people who have seen it.
This could be the number of shares divided by the number of views, the number of likes divided by the number of comments, or the number of retweets divided by the number of followers.
Why is virality important? Because if you want to gauge how well your content is doing, you need to compare it to how big your potential audience is.
Conversion Rate
Conversion rate is a metric that measures the number of people who have taken the desired action in relation to the number of people who have seen your content.
This could be the number of people who have clicked on a link, the number of people who have signed up for a newsletter, or the number of people who have made a purchase.
Conversion rate is important because it helps you to understand how effective your content is at driving conversions. A click-through rate (CTR) is a good metric to track if your goal is to increase web traffic.
Leads Generated
Leads generated is a metric that measures the number of leads that have been generated as a result of your content marketing efforts.
This could be the number of people who have signed up for a free trial, the number of people who have requested more information, or the number of people who have filled out a contact form.
Leads generated are important because it helps you to understand how effective your content is at generating leads.
New Customers Acquired
New customers acquired is a metric that measures the number of new customers acquired due to your content marketing efforts.
This could be the number of people who have made a purchase, the number of people who have signed up for a subscription, or the number of people who have become a member, i.e., how many users.
This is essential because it helps you to understand how effective your content is at acquiring new customers.
Average Order Value
Average order value is a metric that measures the average amount of money that is spent per order. This could be the average amount of money that is spent per purchase, the average amount of money that is spent per subscription, or the average amount of money that is spent per membership.
Gross Merchandise Volume
Gross merchandise volume (GMV) is a metric that measures the total amount of money that is spent on purchases. This could be the total amount of money that is spent on goods, the total amount of money that is spent on services, or the total amount of money that is spent on subscriptions.
GMV enables you to understand the total revenue that your content marketing efforts are generating.
Customer Lifetime Value
Customer lifetime value (CLV) is a metric that measures the total amount of money that a customer spends over the course of their relationship with a company.
This could be the total amount of money that a customer spends on goods, the total amount of money that a customer spends on services, or the total amount of money that a customer spends on subscriptions.
CLV is important because it helps you to understand how much revenue your content marketing efforts are generating over the long term.
Social Media Mentions
Social media mentions are a metric that measures the number of times your company or brand has been mentioned on social media.
This could be the number of times your company or brand has been mentioned on Twitter, Facebook, or Instagram.
Social media mentions show how often people are talking about your company or brand online.
Website Traffic
Website traffic is a metric that measures the number of people who have visited your website. This could be the number of people who have visited your website through a link on social media, the number of people who have visited your website through a link in an email, or the number of people who have visited your website through search engines.
As website traffic is an index that search engine rankings can be based on, it is important to understand how effectively your content drives organic traffic to your website. A search engine optimization (SEO) strategy can be used to improve website traffic.
Pageviews
Pageviews is a metric that measures the number of times a page on your website has been viewed. This could be the number of times a blog post has been viewed, the number of times a product page has been viewed, or the number of times a landing page has been viewed.
Pageviews are important because they help you to understand how popular your content is on your website.
As you can see, several different content marketing metrics can be used to measure content marketing ROI. The best content marketing metrics you choose to focus on will depend on your specific goals and objectives. Overall, these metrics would indicate whether your content marketing is driving results.
How to Improve Your Content Marketing ROI
As a content marketer, striving to improve your ROI constantly is important. Leaving things to chance may result in lackluster results. Nobody wants that. So, keep in the mind these tips to enhance your content marketing ROI:
1. Defining Goals and Objectives
Before you can start thinking about improving your content marketing ROI, you must first define your goals and objectives. What exactly do you want to achieve with your content marketing? What do you hope to accomplish in the short term and long term?
Once these are clearly understood, it becomes easier to start planning the strategy and measuring the progress against these goals.
2. Identify the Target Audience
For your content marketing efforts to have an impact, you need to identify who your target audience is. Understanding your target audience will help to create content that appeals to them and resonates with their pain points and interests.
It may be that your target audience consists of a specific demographic or industry. Maybe it’s a particular job title or persona. Whatever the case may be, identifying your target audience is crucial for effective content marketing.
3. Research
It’s important that you research your topic inside and out before you start creating content. The last thing you want is to create inaccurate or outdated material. Not only will this reflect poorly on your marketing or business goal, but it could also cost you leads and customers. Make sure you are confident in what you’re writing about before you publish.
4. Create High-quality Content
It must be high quality if you want people to read and share your content. This means that it should be well-written, accurate, and informative. If your content is anything less than this, then it’s not likely to generate the results that you’re looking for.
5. Promote Your Content
Just because you’ve published some great content doesn’t mean that people are going to find it automatically. You need to promote your content if you want it to be seen by your target audience. Social media, email marketing, and paid advertising are good platforms to promote content and achieve desired outcomes.
6. Make it Easy to Share
If you want people to share your content, then you need to make it easy for them to do so. Include social sharing buttons on each piece of content you publish, and ensure that the buttons are prominently displayed. The easier you make it for people to share your content, the more likely they will do so.
7. Analyze Your Results
It’s important that you regularly analyze the results of your content marketing efforts so that you can see what’s working and what isn’t. This will allow you to make necessary adjustments to your strategy so that you can improve your ROI. Google Analytics and other similar tools can be useful for analyzing your results.
8. Be Patient
Content marketing is not a quick fix; it takes time to generate results. Don’t expect to see an immediate return on your investment; be patient and give it some time. If you’re consistent with your content marketing efforts, then you will eventually start to see a positive ROI.
9. Constantly Improve
Don’t just stick to the same content marketing strategy and expect to see improvement. It’s important that you constantly strive to improve and make necessary changes to enhance your ROI. Keep up with current trends and adjust accordingly. Don’t be afraid to try new things and experiment with your strategy.
10. Hire a Professional
If you’re serious about improving your content marketing ROI, you may consider hiring a professional content marketing agency or content marketer. These agencies specialize in creating and executing content marketing campaigns and have the experience and expertise you need to generate results.
While hiring an agency will cost you money, it could be a wise investment if you’re able to generate more leads and sales.
Wrap-up
Content marketing can be a highly successful strategy for generating leads and sales. Measuring and improving your ROI is key to making the most of your content marketing efforts.
It requires time, effort, and patience to see results without mincing words. But it’s worth it in the end if you do it right.
What would determine the ultimate success of your marketing success are your quality content, strategy, and execution, as well as your willingness to adjust and improve as needed.