How to Define and Measure the ROI of Content Marketing
Today’s marketers are practically drowning in customer data. Every modern marketing solution provides tools for gathering snippets of information about every social media interaction, website visit, email open, and online purchase. You can also track changes in that data over time. As a result, marketers have the ability to precisely measure the full financial impact — the return on investment (ROI) — for every email campaign, Facebook ad, and other marketing activity. There’s no more ambiguity about whether a given marketing strategy was effective or not, because the campaign ROI can be calculated down to a fraction of a penny.
Except for content marketing, that is. A shocking number of B2B companies — 44%, according to industry analysts — don’t even bother to track their ROI from content marketing. This is genuinely surprising, as content marketing is widely seen as one of the most effective forms of marketing for companies with multi-stage sales cycles. It’s also one of the most time-consuming elements of marketing, especially if you are doing it incorrectly.
Why is this? Is the effectiveness of content marketing particularly difficult to measure? Or is there something else going on? The short answer is: Yes, it isn’t always easy to measure your content marketing ROI.
The role of content marketing
Most content marketing is designed to be both persuasive and indirect. You can use it to showcase your expertise on a topic. It’s rare for a potential customer to decide to make a purchase simply because of something they read in a company’s free white papers, blog posts, or email newsletters. Those things may have contributed greatly to the completed sale as they add touchpoints to the prospect. Yet, it’s difficult to say exactly what percentage of the sale should be assigned to an individual piece of content. The math is always a little fuzzy, and that makes it hard to fully establish a clear ROI.
This doesn’t mean that it’s impossible to assign an ROI to your content marketing. It can be done, and should be. On a technical level, it’s also probably easier than you realize. To start, you need to first understand what you’re actually measuring.
Determine Your Content Marketing ROI
One of the biggest challenges of establishing your content marketing ROI is knowing what, exactly, counts as content marketing in the first place. Content marketing is a catch-all term that includes everything from company news and product-related infographics to promotional videos and thought leadership-building podcasts. While most people would agree that these are marketing tools in the broadest sense, they aren’t always created by (or even for) the marketing team.
The other important thing to remember is that any measurement of content marketing ROI will depend entirely on the key performance indicators (KPIs) that are included in the calculations. It’s absolutely essential to determine what specific KPIs relate to each type of content marketing, what outcomes will be measured, and what percentage of the overall revenue will be attributed to any sale that interacted with the marketing content. These numbers may need to be revised and refined over time, and there will always be a certain amount of estimation involved.
Let’s start with the three core elements that determine the initial ROI for your content marketing.
Establish the baseline
Content marketing drives visitors to your website and social media by providing something that furthers their movement down the sales pipeline. In a sense, everything any potential or current customer interacts with online should count as part of that process. Every unique website visit, every clickthrough, every second spent reading a page, every scrap of content downloaded, and every shared post counts. If your CRM, analytics solution, and marketing automation tools aren’t tracking these interactions, they should be. Once this baseline of interactions is being tracked, it becomes possible to measure changes in these metrics against your content marketing activities and campaigns.
Set the percentage
Even if your CRM and other sales and marketing software isn’t directly tracking content marketing KPIs, it’s possible to get a rough idea of the impact of that marketing on final sales. Every time a website visitor clicks a “Schedule a Demo” button, or replies to a marketing email asking for a consultation, that’s a lead generated by content. Every one of those leads that results in a closed sale should be included in the ROI calculation.
Know your costs
You can’t know what the return on an investment is until you clearly define what those investments are. Is content being generated in house, or is it being created by a contractor or freelancer? How much staff time does it take to edit, proof, and post this content? Are you paying to boost the visibility of this content on social media? All of these things need to be measured to determine ROI.
Most modern CRMs can track lead activity on a website, and many even include comprehensive tools for lead scoring. Every interaction with website content — from lead generation when a visitor trades their email for an ebook or white paper to per-session clickthroughs on guides and blogs — should be counted as a major step forward in the sales process. When one of these sales closes, a percentage of that sale should be attributed to the content they consumed. The more accurately this is tracked, the more precise the content marketing ROI estimate will be.
Post-sale follow up
Not sure how big of a role content marketing plays in your sales process? Why not go right to the source and ask the customer after the sale? This shouldn’t come across as invasive, as customers might find it a little disturbing to be presented with a list of everything they’ve ever read or downloaded from your company website, after all. Instead, simply send them a quick email asking if there was anything on the site that they found helpful when they were making their buying decision.
Expect a certain amount of negotiating — and even pushback — from sales managers and C-suite execs from any calculation of content marketing ROI. Many sales professionals tend to see every closed sale as the result of a one-on-one interaction between buyer and seller, and they may not be used to thinking of content marketing as an essential part of the process. It may take some convincing before they can even admit that the content itself was the deciding factor in moving forward with a sale.
Once you’ve established the basic methodology for measuring the ROI of your content marketing, it’s time to put that knowledge to use.
Here are three things to keep in mind:
Give it time
Unless you’ve been tracking these KPIs from the start, it will take months to determine what’s “normal” for your content marketing metrics. These numbers will ebb and flow throughout the year, and they may not respond quickly to changes in your content marketing strategy. Don’t try to rush it.
Build the case
Your goal isn’t to show that your marketing content is responsible for closing every sale, or for driving every lead. You’re simply trying to clearly demonstrate that your content marketing strategy has real value, and should receive an appropriate budget for the value it provides. If the company wants to generate more sales, increasing the spending on content marketing should be part of the conversation. Collect your data, and show these connections.
Show them the money
With the right KPIs and attribution models in place, the ROI for every dollar spent on content marketing should become clear. Marketing discussions tend to be filled with somewhat ambiguous concepts like “engagement” and “reach,” which isn’t always compelling to the people who make the budgets. Content marketing ROIs allow you to speak their language. It’s hard to argue with “Every dollar we spend on content marketing brings in $4.35,” particularly when you have a CRM report to back that assertion up.
It’s absolutely essential to get the details right when making this kind of ROI calculation. Unfortunately, it’s not always obvious how to put all the pieces together. It helps to work with a team that understands the vital role that content marketing attribution plays in the sales process. If you need a little help establishing your marketing ROI using your CRM and other tools, we can help. Contact FayeBSG today for a no-risk consultation.
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