The formula for calculating return on investment (ROI) goes like this: total revenue minus total expenses equals ROI. However, when it comes to return on investment in content marketing, it is not easy to tie your work to the revenue numbers. The best news is that every marketer has access to great tools to tie content performance to their business results. This post looks at a couple of points you need to consider when calculating the return on investment.
- Set a strategy
The best advice you can get when it comes to calculating ROI is to set a strategy. Many businesses are using content marketing to push their businesses forward. However, this term has become a buzzword where marketers create content just for the sake of creating content. This mostly happens when no strategy has been set before content creation starts.
The first thing that ought to be done in content creation is considering the relevance of the information you want to pass forward prior to determining ROI. This means you have to understand the plight of your audience and offer solutions they will appreciate. It is how well your audience interacts with your content that will determine your return on investment.
- Set a budget
You will not be able to calculate the return on investment if you can’t tell how much you spent in the campaign. Your budget should not only look at the monetary expenses. It should also focus on the person hours spent on the strategy. Will you be employing your own team or outsourcing to online marketing agencies? Consider the amount of time that will be spend on your social media pages, white papers, presentations as well as the associated cost.
- Establish a baseline
In establishing a baseline, you have to consider the cost, utilization as well as the performance of your content. In relation to cost, you need to determine how much your content really costs to create. Look at the person hours as well as the cost of producing the content. You will also have to consider design services, copyrighting fees, and the cost of project management.
The second thing you need to consider is content utilization. According to Sirius Decisions, about 60 to 70 percent of content goes unused. Content that has not being used is automatically 100% waste. Usage reports need to be acquired to know how your content is fairing. Look at the number of views and clicks on your content. If there are none, that content was a waste. To avoid waste content, you need to make sure you work with content creators who understand your marketing needs and ensure your content is published on well-known platforms.
Third, consider content performance. When doing this, you have to go beyond looking at page views, clicks and social shares. Tie the performance of your content to the performance of your business. Has the content brought new customers or boosted your sales? Getting a lot of traffic to your content page is easy but getting quality traffic is not as easy. Consider the conversion rates and engagement of your content.
- Compare organic to paid traffic costs
Even where your marketing strategy does not involve paid search, cost-per-click will help measure the value of your content. This is the easiest method you can use to calculate content ROI. Choose a period of about 6 months then pick several pieces of your content. Use Google Analytics to measure the amount of organic traffic your content has received during the selected period.
The next thing you need to do is to determine the cost-per-click for your primary keywords and multiply your organic traffic by the cost-per-click. This will let you know how much you would have ended up paying if you had used AdWords. Do this once every 6 months to determine your ROI.
- Calculate the brand lift
The purpose of content marketing is to achieve a brand lift. This is because your content will expose your brand to the target audience who will form different opinions of your company. Measuring brand lift is important when calculating your content ROI. There are several tools you can use for this. These tools will help you know how your audiences are responding to your brand based on the number of times they have seen it.
Measuring brand lift will help you get a clear image of your brand loyalty and visibility. When there are more positive mentions of your brand, you will know that your content has a higher return on investment.
Content marketing is all about establishing good relationships with potential customers. The purpose of content ROI is to measure the power of this relationship. Your main focus must always be on creating great content that your target audience can associate with and really appreciate. Just creating content and feeding it to your audience will significantly impact your online reputation.