Content marketing return on investment (ROI) is a performance measure used to evaluate the efficiency of your investment in content marketing and copywriting initiatives. It is expressed as a percentage that shows how much revenue you’ve gained from your content marketing strategy compared to what you have spent. The formula for calculating content marketing ROI is (revenue minus total cost) divided by (total cost) and multiplied by 100, and expressed as a percentage.
ROI can also be calculated according to specific campaign or channel. By comparing these ROI percentages, you will be able to see which approach performs better and decide where to apply your budget for maximum impact. For example, one might reflect: “Our Google AdWords ROI is 100%, while our LinkedIn advertising ROI is 150%. Since LinkedIn’s ROI is 50% more efficient than AdWords, let’s put more of our budget there.”
However, when calculating ROI, it is also important to remember the goal of each channel, and how each can assist in different stages of the customer journey. Read on to learn how to establish the right KPIs for content marketing initiatives, what metrics to consider and ultimately how to improve your return.
What is the Value of Content Marketing?
Content is one of the most effective tools available for driving a buyer on the journey to a sale. When done properly, content marketing and business development work together to promote brand awareness and improve conversions. Being aware of the stages your buyers go through and developing content that speaks to their intent in these moments can help your messaging resonate, drive conversions and extract value from your content marketing strategy. Here are some ways that quality content marketing can add value throughout the buyer’s journey:
Reach
If one of your goals is brand awareness, you will certainly want to measure how many potential customers it’s possible to reach with your content marketing campaign. When you compare cost to reach, or cost to impressions, you can determine whether the potential audience is large enough to justify your investment.
Traffic
The traffic coming to your website's content is a key indicator of whether your content marketing is of interest to your target audience. Crafting high-quality pieces of editorial content marketing on topics that your audience cares about will help you rank for relevant keywords on search engines and drive qualified traffic and leads to your website.
Engagement
The purpose of a content marketing strategy is to create resourceful content that will produce meaningful interactions with your audience. This is also known as engagement. You can measure how many people interacted with your content — as opposed to how many people just saw it — by calculating the engagement rate.
Thought Leadership
By producing content marketing that explains concepts vital to your business, or provides insight into trends worth watching, you can boost your authority as a thought leader within your industry and establish trust with decision makers. Indicators of thought leadership include mentions on social media and linkbacks to your website.
Leads
Lead generation is the process of attracting high-potential prospects for your business and nurturing their interest until they are convinced it represents the right fit for them. Content marketing can be a great tool for lead generation since it allows your company to connect with prospects on a deeper level. It can also highlight thought leaders or address your audience’s pain points can help nurture your prospects until they are ready to buy or convert.
Revenue
It goes without saying that the ultimate goal of any business is revenue. This means that to prove yourself a successful content marketer, you will have to go beyond soft metrics and show a direct correlation between your content marketing initiatives and an increase in sales.
How to Measure Content Marketing ROI
The traditional content marketing ROI formula focuses on the impact content marketing has on revenue. While this is an important metric to measure, it may take months before leads become sales inquiries. When measuring success, it is important to understand the other stages of the customer journey to better determine what is working while content is being written.
To show the positive effect your efforts have had on the volume and velocity of prospect activity, the recommended course of action is to set clear goals at each stage of the marketing funnel, including the lower and middle funnel, and track them through KPIs. Here are the steps to get started:
1. Understand your KPIs.
Depending on the objective of your content marketing program and the channels you are using, you will track different metrics to evaluate your success. For example, if you intend to focus on lead generation through search engine optimization, you may want to measure things like impressions, click-through rates and visits to determine how effectively your content is driving people to your website. Alternatively, if your goal is to build an audience on social media, you may want to measure rates of engagement and quality of interactions through metrics like follows, likes and shares.
2. Calculate how much you spent to produce the content.
Creating high-quality original content can be an expensive endeavor. Brands with deep pockets are devoting significant resources to successfully boosting the quality and quantity of their daily output, allowing them to become major players in the content space. Whether you have an in-house team or are outsourcing your copywriters, photographers, videographers or designers, you will want to take into consideration the rate you are paying for their time spent producing your original content. You will also want to quantify your expenses related to licensing the software and tools that are used. With licensed content, you can access articles, videos and audio on a wide range of topics — from business to wellness to environmental sustainability — immediately, without sacrificing the time or the cost often associated with creating original content.
3. Figure out what it cost to distribute the content.
Your content distribution strategy is the key to making your content strategy click. Good distribution means the right content is used on your paid, owned and earned channels to reach the right audience at the right time. If you are paying to distribute or promote your content through means like paid advertising on search or social media, you will include the expense of running those campaigns here. Keep in mind that even if you own the channels on which you are distributing — like email or social media — you will still want to consider the costs to have the staff, software and tools on hand to plan, monitor and optimize your distribution.
4. Work out the monetary value of what was received in return.
By carefully tracking the interactions with your content marketing across channels, you will be able to determine the total monetary value of your content marketing program through your analytics platform. For example, Google Analytics is a free tool that marketers use to combine data points — like audience demographics, website traffic, user behavior and conversion events — to see how much various campaigns or audience segments contributed to sales. There may be cases where conversions happen through a sales team or by other means that are not trackable online. In those cases, it would be necessary to connect your analytics platform to your customer research management (CRM) platform to get a full picture of the actions that lead to a sale, and determine how much revenue you can attribute to your marketing.
5. Be sure to consider brand value as part of your return.
While calculating revenue through conversions is most important, you will find that your content marketing adds value in other areas that simply cannot be measured directly in revenue. While some initiatives may not immediately result in sales, they should still be considered investments in building both your brand and your client relationships over time. Brand metrics to measure include: brand awareness, brand perception, thought leadership, customer experience and customer loyalty.
Which Content Marketing Metrics Should I Track?
Each stage of the customer journey requires a distinct type of content serving very different objectives. For example, at the top of the sales funnel your metrics should show that your content is being presented to, and resonating with, target audiences. At the bottom of the sales funnel, your metrics should indicate that prospects are converting to high quality leads and eventually becoming customers. Here are some key metrics to track your content marketing KPIs at various stages throughout the customer journey:
1. Impressions
The number of times your piece of content was shown to users. In sum, this helps you calculate the total reach of a piece of content.
2. Clicks
The number of times users have clicked on a link or ad to reach your landing page, profile or website. Clicks measure how appealing your content is to your intended audience.
3. Visits
The number of times users have been to a website and at least one page has been loaded. Visits can be thought of as opportunities for interaction with your brand.
4. Bounce rate
The rate at which visitors enter a website and leave instead of staying to view more pages. A high bounce rate is indicative of poor quality or irrelevant content.
5. Time spent on site
The amount of time visitors linger on a particular page or website. More time spent on a page indicates that the content is engaging and relevant to your audience.
6. Social media metrics
A measurement of the impact and effectiveness of a brand’s social media presence. May include likes, followers, shares and share of voice.
7. Email marketing metrics
Determine the effectiveness of an email marketing program in engaging or converting subscribers. May include open rate, click rate, opt-ins and churn rate.
8. Form submissions
The number of times visitors have submitted their information to request something related to your marketing strategy. Form submissions are an important source of inbound leads.
9. Opportunities
Track specific sales deals being pursued and their monetary value. They indicate a strong sales pipeline and high potential for revenue.
10. Lead quality metrics
Lead scoring and other metrics that indicate how effectively your marketing efforts are driving qualified leads, or converting those visitors most likely to become customers.
What is a Good ROI for Content Marketing?
Overall, the consensus among experts is that you should try to aim for 5:1 return on your marketing efforts or $5 in revenue for $1 spent. The truth, however, is that as long as you’re making more than you’re spending, you're in good shape.
The average engagement benchmarks for a successful marketing program are as follows:
• Email marketing:
The marketing and advertising industry experiences an average open rate of 17.38% and a click-through rate of 2.04%.
• Google AdWords:
The average click-through rate for Google AdWords across all industries is 3.17% for search and 0.46% for display.
• LinkedIn:
The global average click-through rate for sponsored content on LinkedIn is between 0.45% and 0.6%
Why Content Is an Essential Part of Your Marketing Strategy
As content solidifies its standing as a central pillar in an effective marketing strategy, having access to a wide variety of high-quality materials that speak to your audience is more critical than ever. There’s no doubt that developing a brand voice and having custom content pieces are vital to content marketing. However, marketers are now discovering the role that licensed content can play in both driving results and broadening reach, while growing the business and brand. Additionally, organizations on the international stage can leverage content in multiple languages from leading experts and writers. Licensed content not only improves marketing ROI domestically, but can also strengthen the impact of your global content marketing strategy.
3 Ways Licensed Content Can Improve Your Content Marketing ROI
1. Generate more leads at the top of the sales funnel
Licensed content can be a powerful tool for fueling the discovery phase of the customer journey, and can provide a means to drive more readers to your brand’s custom content pieces.
2. Boost your output volume and increase engagement
Maintaining a rapid and consistent flow of interesting, high-quality material can be difficult. Licensing high-quality content can free up time and resources, allowing you to focus on other major projects. Curating news articles can also help your team deliver timely content, while establishing your business as a thought leader.
3. Create more personalized content journeys
Licensed content can enable access to articles, videos and audio on a wide range of topics — from business to wellness to environmental sustainability. The variety of available licensed content can help your organization speak to the specific interests of each buyer personally. This level of personalization can assist buyers by answering important questions or providing valuable information. Licensed content can also target anyone in the funnel, whether they be in the beginning, middle, or at the end of their journey.
Learn More About Licensed Content and Content Marketing ROI
Download our whitepaper, “7 Ways Licensed Content Can Boost Your Content Marketing ROI,” to explore each of the ways licensed content can boost your return on investment and work in tandem with your original content as a part of a comprehensive strategy.
