Content Marketing ROI: how to calculate it and which metrics to use?

Content Marketing ROI or Return On Investment is a metric to measure marketing strategy results.

Although the relevance of it to reach better results, the brand increase, and lead generation, for example, only 35% of marketers say it is extremely important to understand it (according to Hubspot trends — Not Another State of Marketing Report).

And many B2B content marketers don’t know how to measure the ROI of their efforts according to CMI’s report — B2C Content Marketing 2017 Benchmarks, Budgets, and Trends.

Well-success marketing campaigns do not only depend on gains but also their costs. By calculating all these requirements together, it’s possible to reinforce the efficiency of decisions made to achieve more satisfactory results.

Ready to know how to calculate content marketing ROI, its importance, and which metrics could leverage results? Keep reading!

What is Content Marketing ROI?

ROI is considered the most important measure of successful businesses. It is directly tied with revenue, and to get a clear picture of your content marketing ROI is essential to know which metrics are involved in calculating it.

First, though, you must be aware that content marketing is a long-term strategy, and almost every campaign begins with a negative ROI, which should improve over time, and effort.

Reaching better results demands dedication, time, and research. It requires that you understand deeply the characteristics of your audience and their consumption desires.

Also, it is essential to know what requirements could reinforce your brand awareness and your customers’ product preferences, even though this perception is hard to quantify numerically.

With that in mind, this blog post is presenting some elements and steps you can take to measure content marketing ROI, along with a formula for doing so.

What are the benefits of calculating content marketing ROI?

Generates more leads

Content marketing can also generate leads. When your audience views your content, reveling that you know what you are selling, you gain their trust and improve your chances to purchase in the future.

Additionally, calls-to-action (CTA) and landing pages can generate new leads for your sales team. But to reinforce your authority the piece of content must be qualified.

You can create content to provide your persona with useful and free information that solves their problems or meets a need.

Increases retention

Content is a valuable asset. Infographics, ebooks, case studies, for example, reinforce a positive brand impression and have the ability to create a positive experience for potential customers. In the first emergence of demand, they will remember your brand.

Enhance SEO efforts

User experience will always be a decisive factor for your website’s relevance in search engines.

When you create content that satisfies the audience’s needs, which can be attested through algorithms that identify the time or frequency of their access, search engines recognize your brand’s value, improve your performance and increase website visibility.

For that, it is necessary to use keywords correctly, offer agility and security to access your page, and provide your audience with authentic content.

Increases trust with the audience

When you create value without taking anything in return, you build a trust relationship with your audience, who is following your advice and recommendations. They will have a pleasant experience and will make a positive association with proposed resolutions and your brand.

Builds authority

Authority online is something you can also build with effort and time. If your company is considered as a trustworthy place to get information, you are more likely to rank higher in search engines.

The faster and most effective way to build authority is by providing valuable answers to your audience’s questions, guiding them to better experiences, and making them know you are an expert.

How to calculate the content marketing ROI?

The formula to calculate your content marketing ROI uses KPIs — measuring gains and cost of investments, that is:

actions that generate revenue or positive results for the visibility of the brand, which can be a long-term additional;
expenses related to the workforce, purchase of materials, tools, contracts, and broadcasting in media in general.

So the formula is:

Let us consider a customer acquisition example:

If you spend US$100 on content marketing to acquire a single customer that spent US$300 during their visit to your e-commerce, then your ROI will be:

ROI = (300 – 100)/100 × 100% = 200/100 × 100% = 200%

In this case, your business will gain US$1 × 200% = $2 on every dollar spent on content marketing.

In the case of lead acquisition, to find the content marketing ROI you need to know the potential return of a single lead, by calculating the conversion rates.

If you convert 30% of your leads to customers, then your conversion rate is 30%. If your customer lifetime value is US$300, then the value of a single lead will be:

US$300 × 30% = US$90

If you acquire 50 leads from your content marketing strategy, then the value will be US$4,500. If you spent $1,500 to acquire those leads, then your ROI will be:

ROI = (4500 – 1500)/1500 × 100% = 3000/1500 × 100% = 200%

This means your business will earn US$1 × 200% = $2 on every dollar spent on content marketing.

How to measure the gains and costs of content marketing?

Content marketing earnings are calculated over the long-term and all the gain metrics must be continually evaluated.

Brand awareness measures grow from the perspective of consumers. Increasing this indicator is a way to get notoriety among the public and differentiation in the market.

Long-term content marketing helps to increase recognition and brand credibility in the segment in which the company operates.

The relationship between content marketing and brand awareness, therefore, is very close and is an excellent growth strategy.

A brand can be an indicator of a style, concept, or quality guarantee under the expectations of consumers.

Although measuring brand awareness numerically is particularly hard, some characteristics such as an easily recognizable name, volume of trademarks, patents, style guides, and greater positioning help that definition.

Thus, the complexity comes from the fact that more than one element can be present in this evaluation, and the characteristics are unlikely to be numerical, making the compose of content marketing ROI more difficult.

That’s why brand recognition must be observed comparatively between your brand and the companies operating in the same segment, through opinion polls, for example.

You also have to understand your content marketing costs, that is, how much you are investing in content marketing strategies. The most important costs to consider are the production and distribution of content marketing.

Cost of producing content

It involves expenses such as cost of sourcing content externally, time spent planning, and managing content strategies. In most companies, it is assigned to freelancers or in-house experts.

You will have to calculate the amount you are spending monthly with content writing, additional images, videos, cost of software packages, and services used in the process of content creation, other outsourcing work, etc.

You also need to calculate your content creators’ salary, including benefits, if your content is made in-house.

Cost of content distribution

Promoting your content to your audience also will generate expenses. You have to calculate the costs of social media, advertising, email marketing software packages, paid promotions, other tools, and platforms used for content distribution.

What are the best metrics to measure the gains and costs of content marketing?

Here are a few metrics that help determine earnings and expenses from actions in content marketing, divided into categories.

Marketing

Cost per acquisition;
market-share;
brand equity;
cost per lead;
conversion rate;
click-through rate;
page views;
bounce rate;
share of voice (SOV);
online share os voice (OSOV).

Email marketing

Open rate;
conversion rate;
opt-out rate;
subscribers;
churn rate;
click-through rate;
delivery rate;

SEO strategies

Sales volume;
number of leads;
conversion rate;
number of visitors;
time on the site;
time on the page;
landing page conversion rate;
keyword rankings;
page views;
bounce rate;
indexed pages;
increase in non-branded search traffic;
increase in branded search traffic;
referring websites (backlinks);
domain authority;
page authority.

Pay-per-click

Cost per click;
click-through rate;
ad position;
conversions;
conversion rate;
cost per conversion;
cost per sale (CPS);
return on ad spend (ROAS);
wasted spend;
impressions;
quality score;
total spend.

Social media

Amplification rate;
applause rate;
followers and fans;
conversion rate;
landing page conversion rate;
return on engagement (ROE);
post reach;
Klout score.

Website

Traffic;
unique visitors;
new vs. returning visitors;
time on site;
average time on a page;
bounce rate;
exit rate;
page views;
page views per visit;
traffic sources;
geographic trends;
mobile visitors;
desktop visitors;
visits per channel.

Others

Brand awareness;
thought leadership;
leads vs. revenue.

After all, how to determine the ROI of content marketing?

Once you calculate your content marketing cost and the results you got through these efforts, the next step by using content marketing ROI formula is to define the results from those values together.

There is another formula that can be used for each content’s piece, specific campaigns, or overall similar content marketing activities:

ROI = revenue generated/(production content marketing costs + distribution content marketing cost).

If it’s ratio is less than 1, you will need to upgrade your content quality or quantity that is being made.

Content marketing ROI is used to identify investment viability, understand points, and make specifics result: positive returns can be enhanced, while bottlenecks can be minimized or tackled.

Do you know how and why can you use an ROI calculator? Check it out!

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