How many new customers came directly from your last blog article?
What’s the economic value of these video views?
What’s your content marketing ROI?
These are tough questions, right?
And it’s not the only question people are asking you about the value of your content marketing program. Maybe they’re not directly asking you, but make no mistake. They are wondering:
- “That Youtube video really is costing us a fortune. How much money will it make?”
- “Is posting on Facebook really going to grow our business?”
- “I see a lot of invoices, but I see very few results”
Right now, your boss is wondering about the return on his investment. His wondering about your content marketing ROI.
Don’t worry, we’ve all been there.
Actually, we’re all STILL there.
Every content marketer out there has to answer these frustrating questions regularly.
But how frustrating these questions can be, they are the right questions to ask. Maybe you’re the one asking the questions.
Or maybe you’re in one of the following situations:
- Your content marketing strategy is not showing the expected results
- Your website traffic is growing, but all these visitors don’t convert into quality leads and sales
- You want to prove that content marketing works
- You’re not really sure how to calculate your content marketing ROI
No matter what your situation is, it’s important to know that you are in marketing. Everything you say or do has to sell more products in the end. It is your job to attract new, potential customers that will ultimately buy your products or services.
Or as Wikipedia puts it:
“Marketing is used to create, keep and satisfy the customer”
Every single one of your actions serves a bigger goal: growing the business. That means, that more money should come out of it than you put into it.
In other words, you need a positive content marketing ROI.
ROI: return on investment
ROI – short for return on investment – is a popular metric to evaluate the efficiency of an investment.
Or as Investopedia puts it:
“ROI measures the amount of return on an investment relative to the investment’s cost.”
The ROI metric is an easy way to compare the performance of different investments. After you’ve made the investment, but also before. If you want to predict profitability or choose between two different investments.
The basic formula of ROI is:
Let’s look at a quick example:
John invested $10.000 in a new start-up. One year later, he sells his shares for $12.000. To calculate the ROI of his investment, he would divide his profits ($12.000 – $10.000 = $2.000) by the cost of his investment ($10.000). The ROI of John’s investment is $2.000/$10.000 or 20%.
You might notice that ROI is measured as a percentage. This makes it easy to compare multiple investments.
As a content marketer, calculating ROI allows you to compare the efficiency of your content marketing effort to your company’s television commercials or local print ads.
It will help you to compare the profitability of e.g.:
- Blogging vs print ads
- Youtube vs television commercials
- Email marketing vs direct marketing
- Inbound marketing vs outbound marketing
But it also allows you to compare content marketing efforts with each other:
- Facebook vs Instagram
- Facebook Ads vs Google Adwords
- Native advertising vs display advertising
In other words, this easy-to-use ROI formula helps you to calculate everything you might need. From return on advertising spend to the ROI of a single email. By answering tough questions from the beginning of this article, you will actually be able to build a better business case and reinforce your program.
But we’ll focus on content marketing in this article. How do you calculate the ROI of your content marketing program by using this formula?
Calculating your content marketing ROI
Calculating the return on investment of content marketing has always been a struggle for marketing teams.You can use one of the many content marketing ROI calculators that exist, but the formula is not the hard part. if we apply the ROI formula to content marketing, it actually looks quite easy.
There are only two main ingredients you need to know:
- the cost of your content marketing efforts
- the return of your content marketing efforts
Whether you use an online calculator or you do it yourself, you need to figure out these values. That’s the hard part: knowing these numbers. While there are different content measurement tools out there, it’s still hard to know the exact values.
Let’s look into detail what’s behind the formula
Step 1: calculating the cost of content marketing
If you’re trying the figure out what the impact of your investment is, you’ll need to know exactly how much your investment is. In terms of content marketing, the first thing you’ll need to do is list all the costs you’ve made along the way. Literally, all of them.
For a blog article, for instance, think about:
- The time you’ve spent on research
- The cost of SEO software you’ve used
- The time you’ve spent on writing
- The freelancer you’ve paid to do the writing
- The time you’ve spent on putting the blog article into your CMS
- The cost of your CMS or any other publishing software you’ve used
- The hosting of your blog/website
- The time you’ve spend on promoting your blog article
- The cost of the Facebook/Linkedin/Twitter ads you’re running to promote this blog article
- The time you’ve spent on optimizing your article for SEO after your first rankings came in
- … (and many more)
That’s where it goes wrong for many companies. At the very beginning.
Knowing all of these elements can be a real struggle. You have to organize your content marketing process in such a way, that you can quickly measure the cost of all these different elements.
there are tools out there to help you with that:
- Time tracking software: tools such as Toggl allow you to track the time it takes to complete any task. Ask your team members to use these tools to measure things like “time spent on…”. Other handy tools like Time Doctor also help in reducing wasted time on unproductive activities like social media by alerting users and taking occasional screenshots. These tools also integrate with invoicing and payroll apps for automatic payment processing. This helps to get a better picture of marketing expenses on employees and contractors.
- Accounting software: depending on the size of your business and the flexibility you have in choosing your accounting software, these tools can help you out as well. Freshbooks is one of my favorite tools out there. This cloud-based accounting tool allows you to link all expenses and invoices to a specific project. With a few clicks, you’re able to discover all external costs of writing a blog article.
Apart from using the right tools, there are a few other choices you need to make:
Are you keeping everything in-house?
Cost: your time
If you or someone on your marketing team have enough time, you can do everything on your own. There certainly are benefits to this approach, as you can begin writing, publishing and promoting your content without investing anything but time.
However, if your to-do list is packed with other tasks, and your job description doesn’t necessarily includes writing, publishing and promoting content or you might not have the right skills to do this, it might be a better option to (partially) outsource these tasks. Hiring a freelancer or an agency might be a more cost-effective solution in the end.
Should you hire a content marketing agency?
A lot of companies work outsource their content marketing to agencies. This can be a great solution since you have an entire team of external experts you can benefit from. The writing of a blog article will probably be done by a copywriter, while the promotion of a blog article might be done by a content marketer. A content marketing agency also knows how to write great marketing stuff. They can implement best practices from other clients into your marketing plan.
However, agencies are not always the right fit for your business. As you need more skills for your project, lead times might become longer as well. You are one of the clients and your requests need to fit their planning schedule. Despite not always being flexible, agency retainers often include hidden costs. So be aware of that when negotiating your contract.
Should you hire a freelancer?
If you want to stay in control and only outsource a part of your efforts, a freelancer might be the best solution. There are plenty freelance copywriters, designers and content marketers out there. Their prices can be very different.
The price of a freelancer usually depends on how experienced someone is and the pricing model they prefer. Some writers charge you by the hour, while others charge by the word.
This great article by Tom Ewer on Leaving Work Behind shows what you’ll pay a freelance copywriter on average per hour:
- Entry level: $15 – $30 per hour
- Intermediate: $35 – $60 per hour
- Experienced: $65 – $100 per hour
Make sure you read the full article, Tom provides some great insights.Should you keep your #contentmarketing in-house? Or hire a freelancer/agency instead? Click To Tweet
Whatever option you choose, clear communication is key.
If you don’t know which one to choose? Test them.
And don’t forget to calculate your ROI if you do. You’ll quickly see which option is the best investment for your business.
Let’s go back to the cost of the blog article.
In this example, you’ll hire an intermediate freelancer to write the article.
You’ll also spend 5 hours in total on the briefing and feedback for the freelancer and on promoting the article. Your hourly rate is $125, so we’ll multiply this by 5. Why should you use your hourly rate? This is your actual cost. If you’d work 5 hours for a client, you’d charge 5*$125. You’re not, since you’re working on the blog article. So this is what it’s costing you.
If you take the cost of all of your software licenses and divide this by the number of content marketing deliverables, you’ll get the software cost for this particular article.
Last but not least, you will use a small set of Facebook ads to promote your article.
In this example, your blog article will cost you:
- Your time: 5h x $125 = $625
- Freelancer: 6h x $60 = $360
- Software: $50
- Social Media Ads= $500
- Total cost: $1.535
This example is based on one blog article, but you can do the same exercise for all content marketing deliverables or your entire content marketing program. If you are calculating your social media ROI, it will probably look like this:
- Time spent on creating your social media plan/content calendar
- Time spent on creating your Facebook posts, Linkedin posts, Tweets, etc.
OR your freelancer’s cost
- Stock photos or budget for creating images
- Publishing software license divided by number of social media posts
- Budget for Social Media Ads
- Sum of all costs
We now know the cost, but we still need to figure out the return.
Step 2: calculating the return of content marketing
The most important step in your content marketing process is defining the goal.
Long before you start calculating the return of your content marketing investments, you should have defined the purpose of your efforts and specific KPI’s for each deliverable.“Without a clear goal, you cannot define if your #marketingstrategy is successful or not.” Click To Tweet
You need to know what content marketing success looks like. Without a clear goal, you won’t know if you reached that goal. And you don’t know when to pop the champaign. Now that’s a real shame!
Once you have defined your goals, another crucial step is tracking your goals.
Again, many different tools out there to help you.
Depending on what your goal is, you might want to look at:
- Rank trackers for measuring organic search results
- Social Media management tools for measuring reach and engagement
- Marketing automation platforms for measuring campaigns
It’s not always easy to track your goals. It’s even harder to put a financial value on your goal. But you’ll need that if you want to calculate your ROI.
For some goals, that’s no biggie. Every e-commerce transaction, for instance, shows you clearly how much money is coming in.
However, for many other goals, it’s harder to express them in dollars. Think about.:
- Brand awareness
- Time on site and other engagement metrics
- Page visits
- Form submissions
That’s where Google Analytics comes in handy.
A lot of businesses only use Google Analytics to track metrics such as visits, page views etc. But Google Analytics can help you to calculate the return of your blog article.
The secret to this is the “Page Value” functionality.
This looks like this:
How does this work?
Google looks at your total goal value and divides this number by the total number of unique page views.
Let’s say you have a goal with a $10 value.
Visitor A visits Page 1, then Page 2 and then converts.
The page values now are:
- Page 1: $5
- Page 2: $5
Visitor B visits Page 2. Then he visits Page 3 and then he converts.
The page values are now:
- Page 1: $5
- Page 2: $10
- Page 3: $5
You have 2 conversions of $10 each. So that’s $20 in total. You needed 4 pageviews, so each pageview is worth $5. Page 1 and page 3 were both viewed once, so each one of them is worth $5. Page 2 was view twice and is worth 2x $5 = $10.
In order for page values to show, you need to set-up your goals first. It’s a crucial step to get to know the financial value of your Google Analytics Metrics. This video of Google will help you to do just that:
Tip: if you don’t know the value of a goal, look at your conversion rates. Let’s say – on average – that you need 10 form submissions to close 1 new client. And this new client brings in $100. Then every form submission is worth $10. ($100/10=$10).
This functionality in Google Analytics will help you to easily define the return of every piece of content. For the blog article in the example that costs you $1.535, you can now monitor the ROI.
If you have 5.000 views on the blog article with a page value of $0,20, your return is $1000.
If we put that into the content marketing ROI formula:
($1.000 – $1.535) / $1.535 = -35%
If you have a similar blog article with 10.000 views with a page value of $0.20, your return is $2.000. If this article costs you exactly the same to create the ROI is:
($2.000 – $1.535) / $1.535 = 30%
See how it works?
Now, what’s a good content marketing ROI?
It depends, really.
I know that’s not the answer you’re looking for.
But it’s the truth.
Of course, your content marketing ROI should be positive. If not, you’re just losing money.
And that’s not the goal of marketing.
At Great Scott! we strongly recommend that you calculate the ROI of your different marketing efforts.
The average is your new benchmark. Everything you do ultimately needs to have an ROI that is at least this benchmark.
And if you want better results… then do more of what is above your benchmark.
You’ll find the budget to do this by not doing the one or two worst performing marketing tactics of your list.
Additionally, optimize everything that is just below that benchmark, and you’ll see your business grow.
One final piece of advice:
Don’t forget the aspect of time.
A blog article might have a negative ROI after one month. But over time, as more people share the article, as you optimise it, it might rank better in Google and generate new leads every single day. After a couple of months, it might have the best ROI of any marketing deliverable you’ve ever created.
Don’t jump to conclusions too fast.
if you are struggling with your content marketing ROI, your goals or content marketing in general, let us know. We’re here to help!
About Great Scott!
Great Scott! is a project by Thierry De Vynck to help businesses and organizations with their online marketing strategy. As an online marketing consultant, we plug into your (marketing) team and help them to understand the true potential of outbound and inbound marketing in 2018.
You can read more about how we help your business grow here →