Return on Investment (ROI) is a basic metric for evaluating the performance of any component of a business. After all, you need to know what you’re getting back for every dollar you put into, say, new machinery, better technology, an email campaign, an upgrade to your ecommerce site or anything else on the long list of ways to spend money in the quest to grow sales.
ROI answers what is probably the basic and relevant business question of them all: does it make sense to spend money on this?
There are some parts of a business, however, where making precise or even general ROI calculations is difficult for a simple reason—the difficulty inherent in measuring the performance of a certain area of operation. When you run an online promotion, you can count conversions and their value. When you add a machine that produces a product more efficiently, you can calculate how many more units you can make than before.
Getting the ROI is a simple matter of comparing the costs of these investments to the value they generate. But what about something that produces a benefit that’s hard to measure accurately?
Content marketing is a basic part of any comprehensive marketing strategy and, like anything else, it costs money to produce. It definitely generates site traffic and interest in products and services, but how do you know exactly how much? How do you know just what kind of profit you’re making from resources directed to content marketing?
The truth is that no business can tell you exactly what their return on content marketing is but that doesn’t mean there aren’t ways to evaluate its effectiveness and financial value. Let’s take a look at the performance metrics that indicate the return on investment in content marketing.
Pieces of the content marketing puzzle
The point of content marketing is to create traffic and interest and then turn that into leads that convert. It all starts with content that attracts and educates before “warming up” prospects as they advance along a conversion path.
For our purposes, let’s assume that you can already roughly calculate half of the ROI equation — what it costs you to produce this content. Now let’s turn to the ways in which you can see that this investment is paying off in more sales and higher revenue. These are the variables to watch when considering the impact of your content marketing efforts.
- Site traffic is a good place to start. Before customers click on a particular product or place it in a cart or make a purchase, they start with landing on your page. Sure, a good portion will always come from returning customers and organic search, but content marketing drives inbound traffic by addressing the topics, questions and problems that customers turn to the internet for. If you’re producing informative, useful and engaging content on those subjects, you will see an increase in the number of unique visitors to your site.
- Lead generation is the currency of content marketing. Your sales team is responsible for closing the deal, but they need to be fed these leads and that’s what content marketing is for. A common example of this is a piece of content that is gated, requiring an email address for access. The content itself has to be worth the “price”, of course, but that email address is forwarded to the sales team, who take it from there.
If a conversion eventually happens, part of the credit has to go the content marketers who created something that was perceived to be valuable enough to keep and strengthen the customer interest in the product or service. Sales teams can rarely meet their goals on organic interest alone — working with content marketers is what keeps their phones busy.
- Improved SEO ranking is another measure of how much your content marketing is contributing to your bottom line. A higher ranking creates a virtuous cycle where you get more traffic because you’re more visible and you’re more visible because you get more traffic. When your content marketing — in the form of blogs, white papers, guides, etc.—aligns with what users are searching for, the great algorithm in the sky will notice.
Quality content will boost the metrics that matter most, like time spent on page, links clicked and materials downloaded. Google rewards this with a higher ranking in search results. Always remember the old joke about the importance of getting noticed — want to hide a dead body where no one will ever find it? Put it on page two of Google search rankings.
- Subscriber growth is also a clear indication that your content marketing is finding an audience. Whether it’s newsletters, web push notifications or any other medium with a subscriber base, content marketing is the perfect way to invite users to sign up to stay informed about your product, your company, news in your industry or anything else you promise to deliver.
Again, quality is the key and great content will always find an audience. By directing more people to join your subscriber base, you’re increasing the pool of potential customers. Even if your conversion rate remains constant, adding more users means more conversions. When you make expanding your subscriber list a priority in your content marketing strategy, you will get results.
- Social media engagement is a related but separate metric that can also be driven by content marketing. While it may not lead directly to conversions, social media is another touchpoint that helps brands stay in the minds of customers. Platform-specific content marketing can be leveraged to speak to particular audiences with tailored content that suits that channel. As with newsletters and push notifications, enhancing your social media presence with content marketing brings more interested customers into the fold and opens the door to an ongoing conversation that can move them along the customer path.
- Brand awareness and thought leadership are close enough to be grouped together, so that’s what we’ll do here. And while they both may be intangible and essentially impossible to quantify, there’s no doubt that they are essential points on the path to conversion. They also both happen to be part of the primary goal of all content marketing — getting your name out there and establishing yourself as a voice worth listening to. While the importance of brand awareness is obvious and equally applicable across verticals, thought leadership may or may not be as relevant in particular fields.
No one bothers to question if an ecommerce operation leads the way in new research into, for example, selling the same consumer goods you can buy anywhere else. However, in fields where proprietary knowledge or methods are major selling points and help to distinguish a brand — in technology, design or manufacturing, for example — thought leadership can be a major asset. Content marketing is the vehicle for getting that information out and explaining why your brand should be trusted (and bought) rather than another. Becoming a thought leader in the minds of consumers is a gradual process, but very much worth the effort.
- Sales are the ultimate and most obvious measure of the effectiveness of your content marketing. As mentioned before, it’s unlikely that you will be able to assign a precise number of conversions to content marketing but establishing a general relationship between inputs on one end and outputs on the other shouldn’t be difficult. Just because there is rarely an obvious, direct connection between one and the other doesn’t mean there isn’t a connection there.
As a general rule of thumb, content marketing done right will pay for itself in terms of conversions that would not have happened without it. Ensuring a satisfactory return on investment is better done by ensuring that content marketers are meeting their fundamental purpose—building interest in a brand by addressing the needs of consumers.