Only around 41% of marketers are sure that their content marketing efforts are working or if they are even producing a content marketing ROI. That’s sad, professionally, and it’s even worse news for the small businesses who invest in their services.
If you don’t know if something is working, how can you optimize your strategies to maximize results? You can’t.
This doesn’t arise because content marketing ROI can’t be measured. It happens because often they try to measure content marketing with the metrics used in the 20th century.
This just doesn’t work. Content marketing is different. That’s why it’s so effective.
Let’s look at some common content marketing strategies. We’ll explore how you’ll know if you’re getting the right ROI on those strategies.
What is Content Marketing?
Content marketing is a long-term marketing strategy. It focuses on branding, lead-nurturing, and delighting customers through content creation and distribution.
Content marketing helps small businesses level the playing field online. Brick-and-mortar businesses and eCommerce alike can compete against giant companies with content strategies.
Helpful online content builds awareness, interest, and trust. Because you’re not a behemoth company, your content seems more genuine to the average person.
You have a competitive advantage over huge brands in that regard.
The direct revenues that content marketing generates will be clear when you understand how to measure them. But content marketing is also a strong, enduring, and sustainable infrastructure. On this firm foundation, all other marketing efforts become more effective.
Content marketing is a “snowball effect”. Even if you don’t get much snow where you are, you get the picture.
It takes time to build and compact that snowball. But once you start that snowball down the hill, it continues to grow with minimal ongoing maintenance from you.
Why is Content Marketing ROI Different?
If you’re running an Ads campaign, it’s easy to see ROI. Your ad runs. The person clicks. The person converts. You can attribute that conversion directly to the ad and its associated landing page.
Those conversion rates may be pitiful if it’s the only marketing method you’re using. But it all looks very neat and measurable on a spreadsheet.
Content marketing ROI isn’t as straightforward. But it doesn’t have to be complicated.
82% of people feel a positive connection to the company that uses content marketing. This results in 3X the leads for every marketing dollar spent. Not only do you have more leads. You have more highly-qualified leads. Custom content can attract a target audience with nearly laser-point accuracy.
Ads don’t do that, at least not by themselves.
This positivity turns to trust that drives decision-making. That translates to the following for your brand:
- More clicks
- Higher conversion rates
- Higher up-sell potential
- Greater purchase frequency
- More promoter activity
- Decreased ad spend as more people trust your brand
As that snowball grows, these returns become more pronounced. In the beginning, however, ROI is less obvious. That’s why it’s so important to understand what to measure.
What content was behind the customer’s decision to fill up their shopping cart or contact you through their site? You need to know.
Calculating Content Marketing ROI
To get an ROI, you’ll measure both expenses and returns. Depending on how you’re using content marketing impacts how you measure. But the general formula will stay the same.
Content Marketing Expenses
Content marketing expenses include everything you spend on content strategies.
- Research Tools
- Analytics Tools
- Website optimization
- Automation Tools
- Hourly rate X hours works
- Content creation
- Content distribution
- Any paid advertising used to distribute
For each of these expenses, prorate the expense based upon how much of it went into a given piece of content.
For example, you may pay $100/month for a certain automation tool. Divide that $100 by the number of content pieces you created in that month. This may come out to pennies per content piece. But it’s very important to look at your expenses completely.
That includes all of the moving pieces.
Only then will you really understand your ROI.
Content Marketing Returns
Your easiest to measure returns will be the number of leads directly generated by that content in a given period of time.
You’ll then need to know how many of these leads converted and how much money they spent when they did.
Use these returns to get content marketing ROI.
Simplified Content Marketing ROI Formula
Let’s start with a simplified formula. As we discuss how to measure content marketing ROI for various types of content, return to this formula to get your final numbers.
You spend $400 to create and distribute a piece of content. That content generates leads worth $2000 total in a 3 month period.
$2000 – $400 = $1600
$1600/ $400 = 4
4 X 100% = 400%
This piece of content has a 400% ROI for that quarter.
Get Excited About Long-Term ROI
Now, here’s the exciting part for small business. With an ad, you might run the campaign for a month. When you stop running the ad, the new leads stop. That is if ads are your only marketing method.
But with content marketing, that content has continued returns that may last years.
With minimal maintenance, these content assets and ROI continue to grow. Those returns may level off at some point. This happens if the content becomes less relevant and you don’t update it. But you can rest assured it will pay well into the future.
This is how content marketing gets the results it does without the multi-million dollar ad spend of huge corporations.
Long-term, content marketing ROI is this marketing method’s greatest strength. But it also causes a lot of confusion. People get discouraged when they don’t see returns immediately.
This disappointment is made worse by one simple factor. It’s not so easy to determine which piece of content or pieces of content contributed to a conversion.
A person may click on your content. They consume content. Then they leave the website. They come back days or even weeks later. They add something to their cart. They comment on a blog or follow you. They may do something else that doesn’t directly put money in your pocket.
A person may even click on an ad when they finally buy. If you’re not measuring your content marketing, you might completely attribute that sale to the ad. It could be far from the truth.
Fortunately, there are some great tools, including free ones from Google. They help you track which content should be awarded a lead or sale. You can even divide a sale among multiple pieces of content to get a more accurate picture.
When you know which content has the greatest ROI, you can make more content like it. Continue to hone your craft and increase your content marketing ROI.
Next, let’s look at various strategies and how they’re measured through Google Analytics.
Set Up Sales Funnels in Google Analytics
As part of this content marketing strategy, set up specific “funnels” on your site through which to lead customers on your site with content. These may start out in an email, on social media, or a related website. But they all end up on your site.
Here you have to power to shape their user experience with a responsive website and great content. Convert them into a paying customer.
People may take many paths through your site. But these funnels represent the most straightforward path (or paths) a person takes to become a customer.
The visitor arrives on a certain piece of content. They click a single call to action button. That button takes them to a contact page. They get a thank you page after contacting you.
To get started, establish your goal. It may be:
- Getting a purchase confirmation
- Getting a thank you page after downloading a free trial, eBook, etc.
- Viewing a certain piece of content
- Watching a video
These pages represent steps in the buyer’s journey. This is the journey that buyers go through as they learn about your company and what you offer.
A goal may or may not have a dollar amount attached to it. It’s still important to track your progress.
Track each step the person takes before arriving at the goal page. Determine how effective each step is in prompting the person to complete a desired goal.
You may set up numerous funnels for your site. In most cases, they’ll all end up funneling toward one or a handful of goal pages.
Start by setting up a goal.
- Log into your Google Analytics account. (if it’s not set up, set it up first)
- Click the goals tab.
- Give your goal a name.
- Enter the URL of the final destination. That’s your goal page. If you have multiple similar pages that represent a goal, you can choose “exact match” to reduce the number of goals you have to set up.
- Give the goal a monetary value. This would be based on your average new customer spend and conversion rate. Leave blank if you wish.
Next set up your funnel to that goal.
- Select the box next to “Use Funnel”
- Enter the URL for each funnel step. It may start with a quiz, article, landing page, or video on your website. Some funnel will typically have 3 or more steps.
- If you want to rigidly check the effectiveness of this funnel, select “required step” next to steps. Otherwise, if someone enters the funnel at any step in the funnel, it will count as a goal completion for that funnel.
Once you’ve had your funnels running for a while, you’ll be able to see the effectiveness of that funnel when it comes to reaching your goal.
The funnel gives you great insight into how your content works together to achieve that goal. Building funnels on your website is the most efficient way to convert.
But conversions through content marketing can also happen in less direct ways. Use the reverse goal method to backtrack how the conversion happened.
We’ll discuss that. But first, let’s look at the content marketing funnel in practice.
Content Marketing Funnels in Practice
Piggybacking off hype created by TV shows like the Walking Dead, IT company Sungard built a strategy that their target audience loved.
Leveraging multimedia content, they released zombie-themed content. Each piece took a different angle on how to survive a zombie apocalypse. It included infographics, books, videos, and blogs. They shared it on social media and through effective email marketing strategies.
But this content was more than just fun for their customers. Each piece had a CTA. The CTA guided the person to a single pillar piece of content.
This content tied back to the idea of surviving an apocalypse of a different sort. It explained how IT departments can prepare for the inevitable in the IT world, loss of data and function when IT systems fail.
It shared how to develop effective data-backup strategies on a budget. The CTA on this content further funneled the person into a contact form.
Sungard’s campaign earned a click-through rate increase of 150% and a 200% increased open rate. Through this content, they generated highly-qualified leads.
The sales team picked it up from there. They converted those leads into business clients. Those sales never would have happened without the consistent and persistent blog bringing in new customers.
View a Reverse Goal Path
In this section, we’ll be using the goals we set up in the last section. Once those goals are set up and running for a while, you can view reverse paths.
Here’s how to follow a reverse goal path.
- Open your Google Analytics Account (if you just set it up, you won’t be able to do this right now)
- Go to Conversions > Goals > Reverse Goal Path
- To simplify what you’re viewing, filter by “blog” or a “category of landing pages”. The word you sort by must be present in your URLs (page addresses). Most websites will have the word “blog” in the URL for each individual article on their blog like this: https://www.lyfemarketing.com/blog/b2b-social-media-marketing/
- Sort by goal completions. Pick one of your goals.
- Browse through the posts that appear. Find out which ones led people to that goal completion.
- Download the file for future reference.
- Start tracking the number of times a piece of content leads to a goal completion in a spreadsheet to identify your winners. Improve your strategies over time.
If you use this method to get your content marketing ROI, determine what percentage of people who complete that goal actually buy. What is that sale worth to you?
Then return to the simplified content marketing ROI formula above to get your ROI.
Establish Your Conversion Rate
Early in the buyer’s journey, it’s effective to track your basic conversion rate. These are visitors who provide contact information. You do this because, with some complex buying decisions, the actual purchase may be months away.
You need to know how you’re doing now.
Once you have contact information, you customize and personalize content to provide a more relevant experience to that customer.
To measure this, once again, use Google Analytics. Find out how many unique views a piece of content received. Now use the sales funnel method or the reverse goal path. Determine how many people submitted their contact information from this piece of content.
Divide the number of unique visits by the number of people who took you up on your offer. You have a conversion rate.
Assign a dollar amount to each conversion. The amount will be based on the average number of these qualified leads that go on to become paying customers and how much they spend.
You have your forecasted ROI.
Use Tag Manager to Track Content Clicks
We’ll offer up this content marketing ROI calculation method with a warning. It gets a little tricky. But it does give you the most insight into how your content is working together. As mentioned earlier, it’s often multiple pieces of content or content plus ads that earn a conversion.
Tags help you understand where the person first engaged with your content.
This method is important because some content will help you build brand awareness. It may not directly lead to a sale. But without that brand awareness content, you may never have gotten this visitor’s attention in the first place.
You can start with Google tag manager. Create a unique custom tag link on key content pieces that you want to track. When someone clicks the link from that page, that piece of content will be attributed for its role in generating that lead.
This interaction may happen months before the person actually becomes a customer. As you begin using tags you’ll have a clearer picture of how content works together to deliver an ROI.
Content Marketing in Practice
To the average person, HCC medical insurance is not a known name. But to the customers they targeted in their region, HCC became well known.
From a financial perspective, who better for a medical insurance company to target than healthy, active people?
They did so in an interesting way through ongoing content marketing.
They created highly shareable adventure-themed content. These included infographics, quizzes, and even a traveler’s “bucket list”.
The content educated and entertained as it talked about first aid and safe exploring.
This campaign earned nearly 4 million views and over 2,000 social media interactions (comments, shares, etc).
The content funneled back to more “serious” pillar content on their website. This further educated the person about health insurance and the company.
A doubling of revenues could be attributed back to these content pieces.
Measuring the “Immeasurables”
As mentioned, content marketing’s strength isn’t its ability to generate direct sales. Although, as you can see from our examples, it can do that too.
It’s the residual effects that build into that snowball over time.
Do you want to effectively measure your returns on content marketing? Then don’t disregard the long-term returns from that content.
For this calculation, look at your expenses as a whole. It will not be possible to attribute these returns to one or a handful of content pieces. That’s what makes it not directly measurable. But here’s what you will be able to measure over the next several years.
Get your baselines now. By applying effective content marketing strategies, you’ll see a measurable growth in these areas.
Increased CLV (Customer Lifetime Value)
Because you’ve built trust, people are willing to spend more money and they stay loyal longer. And keeping loyal customers is far better than convincing new ones. In fact, based on a study by Gartner, 65% of businesses ‘ sales come from their existing customers. Not only that, it costs 5 times as much to get a new customer than to retain an old one. So, having a loyal group of buyers should also be a priority for marketers. Content marketing will help you with that.
Increased Traffic to your Website
People are more aware of your brand so they’re more likely to click. You have great visibility in searches thanks to Search engine optimization (SEO). That’s an incredibly important part of any digital marketing strategy.
Higher Conversion Rates
With content marketing, you attract more of the customers who actually want what you sell. They need less convincing.
More Positive Reviews
You do have to provide great service to get great reviews. But you’re already doing that. More people will feel positive about your company. More will want to express these reviews.
Also, watch some costs go down.
Reduced Marketing Costs
As you invest in content marketing, your other marketing costs go down. Pay-per-click (PPC) is more effective with a foundation of content marketing. Content marketing costs diminish over time as the content takes on a life of its own, generally increasing your content marketing ROI.
This is how small businesses get the most out of marketing on a small business budget.
Reduced Customer Care Costs
Part of content marketing is setting up a helpful online self-service system. Use content to answer common customer questions. Make it easy to resolve challenges without calling you.
Spend less time on the phone trying to fix repetitive misunderstandings.
Long-term Content Marketing in Practice
Salt Lake City based e-commerce accessory company Zagg engages their tech-savvy audience. They do so with a highly targeted tech-themed blog. They publish new insightful content each week. This includes how-to’s, tech news, and entertaining articles.
They share on social media and with engaged email subscribers.
Within a short time, Zagg has become a trusted source for tech information and products.
But the amazing ROI is the amount of traffic they generate. Over 60% of traffic is from new visitors. Because they used content to attract the right visitors, this new traffic translated to increased sales.
Content Marketing ROI: It Doesn’t Have to Be Elusive
Content marketing ROI is neither immeasurable nor complicated. But it does require you to rethink how we measure returns. You must consider how content pieces work together to achieve goals. In content marketing, you can rarely attribute a conversion to a single piece of content.
Often the piece of content that appears least connected to the sale was responsible for gaining customer interest in the first place. Without it, you wouldn’t have a sale.
Fortunately, how content works together doesn’t have to be a mystery. You can use free analytics tools like Google Analytics to track content success.
Investing in advanced analytics and automation tools will take your content marketing to the next level. Applying strategies that leverage various types of content and methods is key to long-term success.
If your content marketing seems unmanageable and immeasurable, it’s time to work with people who can get real results. Start working with comprehensive marketing strategies that work. Contact us today for a consultation.