As a content marketer, measuring the return on investment of your content marketing efforts can give you a better sense of your content's contribution to the business bottom line. By frequently tracking your content KPIs, you can measure the ROI of your content marketing program and make informed investment decisions to improve your results.
What you will learn
- What content marketing ROI is and how to measure it correctly
- Why measuring content marketing ROI is crucial to achieving success with your content
- The different content attribution models you may consider
- Content marketing goals and KPIs to track for content marketing success
- How to measure content marketing ROI
What is content marketing ROI
Content marketing ROI is a metric used to measure the effectiveness of your content marketing efforts in generating revenue compared to expenses. Measuring your content return on investment can help you determine whether your content marketing strategy is delivering a profitable return on the costs you're incurring and identify areas for improvement.
Content ROI can also be a way of gauging how well a company’s content is performing in terms of generating leads, increasing website traffic, and other business goals. Compare the financial returns generated from your content marketing efforts to the costs associated with producing and distributing that content, to calculate your content's ROI.
Content marketing ROI formula calculation
To calculate content marketing ROI, you need to subtract the cost of creating and distributing your content from the revenue generated by that content, and then divide that number by the cost of creating and distributing the content. This will give you a percentage that represents the return on investment for your content marketing efforts.
Here is the formula to calculate content marketing ROI.
Let's use a simple example of a single blog post to illustrate this formula.
Let's say we paid one of our freelance writers an hourly rate of $45 for their blog post on "demand generation strategies," which took them 6 hours to research and write. That would be $270 in creation costs.
We then paid an outreach specialist $30 per hour for two hours to spread the word through a link building outreach campaign. $60 in total.
We also spent $400 on Facebook to promote the blog post so we could determine how well the page was converting, instead of waiting for it to get picked up in the search rankings. We're now at $460 in content distribution costs.
Summing up our content production and promotion expenses, that is a grand total of $730 incurred on our blog post.
To keep things simple, this means that in order to break even, we would need to sell at least 8 Essential plans at $89 ($730 divided by our Essential plan). That could be 1 Essential plan that a user retains for at least 8 months, or 8 plans in one month. Of course, it could also mean a combination of other plans and lifetime values.
Let's say that after 3 months, we can attribute 15 Essential plan purchases to this article. That would look like this, using the content marketing ROI formula.
That would translate to an ROI of 83% after 3 months, which isn't too bad.
But the great thing about search engine content marketing is that this article can potentially keep acquiring users for eternity, as long as it stays updated and is relevant. After a year, I could potentially have 40 sales, giving me an ROI of 388%.
By comparing the costs and results, you can determine whether your content marketing strategy is generating a positive return on investment. A positive ROI means that the revenue generated from the content is higher than the cost of creating and promoting it, while a negative ROI means that the costs exceed the revenue generated.
What if this article only brought us 3 sales the entire year? That would be a negative ROI of 63%. Sure, it could still bring in a few more users eventually but remember, I can have hundreds of blog posts on my website.
And plenty of them will bring in users at positive ROIs that will help subsidize any expenses on articles that don't perform as well. In this example, I assumed a one time purchase and ignored the cost of other resources such as tools and custom designs, but you'll want to include recurring revenue and the cost of software when you calculate the ROI of content marketing.
Content marketing isn't about generating sales with every article you publish anyway; instead, your articles must first deliver value and educate your audience through their decision process.
How to attribute ROI to content
In the example above, I demonstrated a straightforward last touch attribution model in which we gave all the credit for the sale to the last piece of content that the user interacted with. Although this might be the simplest approach for content marketers to measure ROI, you may want to adopt increasingly complex models to attribute ROI.
attribution models inside Google Analytics
In actuality, visitors don't turn into customers because of a single piece of content. Rather, they warm up to your brand as they consume helpful content that resonates with them over weeks, months, and even years. In fact, a study by FocusVision discovered that the average B2B buyer consumes 13 pieces of content before making a decision.
You can use attribution models to determine which touchpoints in the customer journey should receive credit for a conversion. Here are some of the different attribution models commonly used in content marketing:
Last-click attribution
This model assigns all the credit for a conversion to the last point of contact. In content marketing, this would mean giving credit to the last piece of content that the customer interacted with before converting.
First-click attribution
This model gives all of the credit for a conversion to the first point of contact with a customer. For content marketing, this would mean giving credit to the first piece of your brand's content that the customer interacted with.
Linear attribution
This model assigns equal credit to every touchpoint in the customer journey. This would mean dividing the credit for a conversion equally among all the pieces of content that the customer interacted with, on social media, organic search, video, and even your sales team.
Time-decay attribution
This model gives more credit to touchpoints that are closer in time to the conversion. When measuring content marketing success, this would mean giving more credit to the pieces of content that the customer interacted with just before converting.
Position-based attribution
This model gives more credit to touchpoints at the beginning and end of the customer journey. This would mean giving 40% credit to the first and last pieces of content that the customer interacted with, and 20% to the content in between these interactions.
Algorithmic attribution
This model uses machine learning algorithms to allocate credit by determining which touchpoints are most important in the customer journey.
It's important to note that no attribution model is perfect, and each has its own strengths and weaknesses. The best approach is to determine which attribution model best serves your unique content marketing objectives. If you have several different types of content marketing campaigns, you can also use a combination of different attribution models to continually monitor and analyze the data.
Why measuring your content marketing ROI is important
Measuring your content marketing ROI is important because it helps you determine the effectiveness of your content marketing efforts in terms of generating sales, and revenue for your business. Calculating your content's return will help you understand which campaigns are working, where they are wasting money, and what changes can be made in order to increase their ROI.
In fact, 70% of marketers who see success with content marketing have acknowledged calculating content marketing returns.
You can use this information to make smart choices about how to spend your money and use your resources to get the best return on your investment. Measuring content ROI will also help you with the following:
Proof of results
By measuring your content marketing ROI, you can show your company or clients that your content marketing efforts are delivering tangible results and contributing to business goals, thus justifying the resources and budget allocated to their creation.
Identify the best (and worst) content types
Analyzing your content marketing ROI can help you identify which types of content, channels, and tactics are most effective at generating results, and which ones are not worth the investment.
With a clear understanding of what is working and what isn't, you can make data-driven decisions to optimize your content strategy and focus your efforts on the areas that deliver the best results.
How to measure content marketing ROI
As we saw before, the cost of your content creation and promotion, along with associated revenue are essential metrics for measuring content marketing ROI. It is therefore vital that you have the right systems and goals in place to be able to effectively measure these figures. Here are 7 steps to measure the ROI of your content marketing.
1. Define your content marketing goals
Defining your content marketing goals is essential to measuring ROI because it defines what success looks like for your content marketing efforts. By setting clear, measurable goals, you can keep track of your progress and adjust your strategy as needed to achieve those goals.
Without clear goals, you may produce content that doesn't resonate with your target audience or fails to achieve tangible business outcomes, leading to wasted effort and resources.
Start by defining your business objectives.
What do you want to achieve with your content marketing campaign? Do you want to generate leads, increase website traffic, or improve brand awareness? How about thought leadership?
Setting specific, measurable goals that align with your overall objectives will provide you with a benchmark to measure ROI against. If you are not meeting your goals, you can adjust your content strategy to improve performance and maximize ROI.
An example of a content marketing goal could be to increase website traffic by 20% over the next three months by writing high-quality blog posts and promoting them on social media. This is a clear, measurable, and time-bound goal that lets you know how well you're doing. By keeping track of how many people visit your website over time, you can see if your content marketing is helping you reach this goal and change your strategy as needed.
2. Establish your content marketing key performance indicators (KPIs)
Once you have selected content marketing goals, the next step is to establish key performance indicators (KPIs) that will help you track and measure your progress. KPIs are specific measurements that you'll use to figure out how well your content marketing is doing.
Tracking key metrics can help you keep an eye on how well your content marketing is doing and make decisions based on data. Not defining your content marketing KPIs can make it difficult to measure the effectiveness and return on investment of your content marketing efforts.
Your KPIs should be specific, measurable, and aligned with the content goals you defined in step one. Depending on your objectives, they will be different for organic traffic, social media engagement, lead generation, or revenue made. For example, if your content objective is to generate more leads, your key performance indicators (KPIs) will include the number of leads you get, how well your lead magnets convert, and how much each lead costs.
To set up tracking to measure your content marketing ROI, you should start by identifying the metrics and KPIs you want to track. This may include website visitors, social media engagement, lead generation, and revenue generated. Once you have identified your KPIs, you can set up tracking using a variety of tools and platforms, such as Google Analytics, social media analytics tools, and marketing automation software.
3. Set up tracking for your content
Setting up tracking to measure your content marketing ROI is vital to extracting the data you need to measure ROI from your content marketing strategy. Without the help of tracking, you may not have the necessary analytics data to measure the impact of your content marketing investment. Not setting up tracking to measure your content marketing ROI can lead to a lack of understanding of what's working and what's not, leaving you in the dark.
You can use analytics tools like Google Analytics or Adobe Analytics to set up tracking for your content.
tracking events inside Google Analytics
Set up lead tracking using marketing automation software like these to track form submissions, email sign-ups, and other lead generation activities. Integrate your tracking software with CRM software, and e-commerce platforms to track revenue generated through your content marketing program.
Social media analytics tools can help you measure social media engagement and traffic. You can also use UTM parameters to track the source of your traffic and measure the effectiveness of different marketing channels.
Setting up content analytics tracking will provide you with data to make it easier to calculate the revenue generated from your content and compare it to your content marketing spend.
4. Calculate your content costs
To determine content marketing ROI, you will need to know how much you are spending on content creation. If you don't track your content marketing costs, you might keep spending money on things that don't give you a good return on investment (ROI). Because of a lack of understanding about the true cost of your content creation, it will be difficult to accurately measure your return on investment.
Start by identifying all expenses associated with content creation and distribution, to determine your content marketing costs.
Your content marketing costs may involve the following.
- Calculating the cost of hiring freelance writers, graphic designers, or video producers to create content for your website or social media.
- Measuring the cost of social media advertising or paid content promotion to distribute your content to a wider audience.
- Tracking the cost of any tools or software used to manage your content marketing program, such as social media scheduling software or SEO tools.
When you measure your content marketing costs, you can accurately figure out how much each content marketing campaign or initiative costs. By knowing how much you are spending on content, you can find places to cut costs, reallocate resources, and improve your strategy for the best return on your investment.
5. Measure revenue and business outcomes
Just like calculating your content expenses, measuring revenue from content marketing is essential to determining your ROI. Without knowing how much revenue your content generates, you will never be able to effectively measure content marketing ROI. In the long run, it will become difficult to justify the money you spend on making and promoting content.
To determine your content marketing revenue, you should start by identifying the different streams of revenue generated as a result of your content marketing strategy. This can include sales from leads generated by content, money from ads and sponsorships, and other sources of income.
Most marketers ignore leads when it comes to measuring content marketing ROI but this is a mistake you shouldn't make. If you know the average value of a sale and the conversion rate of your leads, you can estimate the potential revenue generated by those content marketing leads.
For example, if you have 100 leads and know that your conversion rate is 3.5% with an average order value of $75, you know that the value of 100 leads is 3.5 conversions x $75 each. Which equals $263 rounded up.
That means that the value of each lead is $263 divided by 100 leads. So each lead is worth $2.63 to your business.
You can also assign a potential revenue value to each lead, based on historical conversion rates or average customer lifetime value. Multiply the number of leads generated by the potential revenue value to calculate the potential revenue generated from your content marketing initiative.
By keeping track of how much money you make from different content marketing campaigns, like blog posts, webinars, or whitepapers, you can separate your results and figure out which types of content and platforms bring in the most revenue. Of course, you'll still need to measure ROI to determine which stream was the most profitable.
6. Calculate content marketing ROI
To measure your return on investment, divide the difference between the money you made from your content marketing efforts and the money you spent by the amount you spent. Here's the formula I showed you above:
For example, if you spent $10,000 on content marketing costs and generated $50,000 in revenue, your ROI would be
- 5 times or,
- 500% or,
- 5:1
In other words, every dollar you spend on content marketing produces five dollars in revenue. Not bad eh.
Measuring the return on investment of your content marketing tactics is important to let you evaluate how well your content marketing efforts are working, find places to improve, and optimize your strategy to get the most ROI. By tracking relevant metrics and measuring ROI, you can identify what works and what doesn't and make informed decisions about your content investments in the future.
Calculating the return on investment (ROI) of your content marketing also helps you show the value of your content marketing success to stakeholders and get their support to expand your marketing budget for future projects.
7. Monitor and analyze your content marketing ROI
You should keep an eye on your content marketing's return on investment (ROI) because consumer tastes change with industry trends, which affects how they act. Continually monitoring relevant content marketing metrics to track ROI on a regular basis will help you identify trends and patterns in user behavior and adjust for them before they have a negative impact.
Monitoring your ROI in real time can also help you figure out how well your campaigns are doing and where you can make changes. If you don't keep track of your content marketing's return on investment (ROI), you could waste resources and miss opportunities to maximize the returns from your strategy.
Without monitoring your content marketing ROI, you may not notice when your campaigns start to perform poorly. This can lead to a decline in web traffic, engagement, and conversions, which can harm your business.
It's also important for you to continue measuring your ROI if you have a recurring revenue model. You can compare your customer acquisition cost against their lifetime value to determine how long it takes you to break even, and generate positive returns.
For example, if it costs you $1000 to acquire a single customer from your content marketing, and the average customer sticks with you for 9 months paying $200 per month, your customer lifetime value is 9 months x $200 which is $1800.
Your final ROI in that case would be 1.8 times or 180%. Not a negative 80% which is the return you'd calculate if you only measured ROI for the first purchase.
Key takeaways
- If you're spending money on producing and distributing content, you should be tracking how much money it generates for your business
- Tracking content marketing ROI can help you identify which content types and formats work best, and reallocate resources and focus on these areas
- If you don't measure the return on investment of your content marketing, you may waste resources and miss chances to improve and optimize your content marketing strategy
- Measuring content marketing success in terms of the returns it generates can be critical for proving marketing efforts and gaining support for new projects and ideas
- Without measuring ROI, it would be difficult to justify the expenses you incur on content and determine the effectiveness of your efforts
Conclusion
Ultimately, the goal of content marketing ROI analysis is to determine whether your investment in content marketing is generating a positive return for your business. Measuring and analyzing these metrics can help you identify areas where your content is most effective and make data-driven decisions to optimize your content strategy.
