Without fail, the question I am asked the most from marketers who are struggling to build their business case is, “How do I measure content-marketing return on investment (ROI)?”
We know that as consumers, we’re all consuming more information online. We are looking to get informed and we are looking to be entertained.
But building the business case is often a tricky proposition. It’s important to remember that everyone inside the business creates content. And creators love their content like a momma loves her baby -- although the content may stink, we can’t call anyone’s baby ugly.
So how do we build the business case for content marketing and answer the content-marketing ROI question before we even really get started? It starts by building a strong business case that doesn’t directly attack people, their teams or their budgets.
What is the ROI of content?
Let’s start with how we answer the ROI question before first. There’s very few benchmarks. Here are a few examples that have been published on content-marketing ROI.
We recently curated these 15 case studies to prove content-marketing ROI. But the way I specifically answer the question is to point out that content-marketing ROI is higher than the average marketing ROI in every place I’ve looked.
Julie Fleischer at media-agency OMD, formerly at Kraft Foods, said that content-marketing ROI is four-times greater than even Kraft's most targeted advertising. So the first way to respond to this question is to ask for the baseline: What is your company’s average marketing ROI? If you’re feeling cheeky, ask for the ROI of that logo your company put on a golfer’s hat or on the side of a building.
Then go about addressing each of these three components of ROI.
1. Content cost
Content-marketing ROI starts with a solid understanding of content costs. How many marketers know the cost of the content produced by their firms? You need to conduct a content audit or at least a sample of the content you produce. Apply some average costs and extrapolate that to gain a real sense for the size of the problem.
2. Content utilization
SiriusDecisions has reported that as much as 60 to 70 percent of content goes completely unused. How many businesses know what percent of their content even gets used? Any content that gets created but never used is 100 percent waste, so you need to not only track content production but also usage.
3. Content performance
Content-marketing ROI needs to define the business value of the outcomes it generates. Most people start by talking about page views and social shares and clicks to something. But it’s important to first tie your content performance back to the business case that got you started in the first place. How many businesses have calculated the business value of any of their marketing outcomes?
How do you answer the content-marketing ROI question?
Ask for your overall or average marketing ROI.
See if your business understands the cost content it produced.
Find out how much of it gets used. Ever. I’ve never seen any business over 50 percent!
Promise to build a business case and measure the return.
Make marketing accountable.
I have always believed that marketing should be accountable for results. We need to hold marketing accountable for ROI overall. This means that all marketing spent should be tied to quantifiable results that the sales team and executives can understand.
Generally, our marketing should be focused on generating and then managing demand. But sometimes, the CEO wants to extend the brand, and sometimes sales folks want to work under the cover of a nice, massive awareness blitz.
Aside from those examples, we need to show hard results and make sure every marketing program has a sound business case or ROI. Or as this Annuitas Group blog post stated, “We need to resolve to measure our marketing in terms of revenue.”
Building the business case for content marketing.
OK, you’ve survived long enough to want to learn how to build the business case. There’s a couple of ways to go about building a strong content marketing business case.
1. Reach early stage buyers.
Most marketing is overly promotional (and we tune it out), but it is also just too early. Your business needs to get people to know your brand, like your brand and then trust your brand enough to want to buy from you. That starts with a significant amount of early-stage dating content. It needs to be non-promotional and not overly creepy. You can’t push too hard, because you want to get to a second date.
Identify your “fair share of conversations." What percent of the online conversations on your product category are branded? What percentage of those are your brands? How different is that from your market share? If there’s a gap, it means your competition is wooing your prospects before you are.
What is the percent of unbranded search traffic on your website? How many of your early-stage prospects are finding your company website? If you’re like most brands, you promote too much on your website, and you need to build a brand-publishing capability.
What is banner effectiveness at driving brand visits? This is easy. A dollar spent on digital banner ads will under-perform a dollar spent on content marketing in almost any category.
What is the cost of advertising / search landing pages with low organic and social traffic? Same as above, but here you want to look for places to fund your content marketing. Look for opportunity costs from under-performing digital assets.
What is the cost of organic and social website traffic versus paid? Content marketing allows you to gain additional reach, engagement and conversion without having to pay for it. You can literally earn your audience’s attention rather than buy it.
What is the cost of content that goes unused? This is often the biggest marketing expense we find -- and it’s all waste!
2. Engage new buyers with your brand.
If you found that you are not engaging with the top of your funnel, there are a few ways you can quantify the opportunity to reach and convert them.
What is the time spent, bounce rate on content versus. advertising landing pages? This will show how content marketing can help you reach early-stage visitors, engage and convert them to sales.
What is the cost / repeat visits, time engaged with your brand? A classic awareness measure, this can help you measure the value even for brand awareness since these are visitors you would have never reached with ads.
Identify subscribers andvalue per subscriber. This allows you to literally bring prospects into the brand fold, so you can start to market to them.
3. Conversions you would have never reached
Finally, you need to be able to measure things that have a quantifiable value that you can take to the bank.
Cost per lead, pipeline touched, cost per registration (content or events), cost per sale
Content percent of source of leads
ROI versus average marketing ROI
In order to answer the content-marketing ROI question for your business, you need to be able to build a solid business based on a deep understanding of your business.
What is your business’ average marketing ROI, and how can content marketing achieve a higher return? The answer comes down to understanding your content costs, usage and performance.
From there, you have a few paths to building a solid business case that will allow you to reach new customers, engage them with your brand in a meaningful way -- and then convert them to new sales and long-term relationships that provide real ROI.