When we meet with prospective clients at Spot On, we often hear something along the lines of “I’m already spending a fortune on marketing.” Our answer? “Yes, but are you getting a return on your investment?” Often, we are met with a blank stare.
Digital marketing is essential in bringing new customers to your business, but if your marketing isn’t effective, you are throwing your money to the wind. Analyzing your ROI, however, is not something that most marketers have a clue about how to do, but the good news is – Spot On is here to teach you how to measure your content marketing ROI.
What is Content Marketing?
The Content Marketing Institute (CMI) defines content marketing as “a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience — and, ultimately, to drive profitable customer action.”
Chances are that your company is already doing some form of content marketing, even if you don’t call it that. Does your company create educational articles or blog posts? Then you’re creating content! Other types of content might include eBooks, videos, infographics, case studies, and webinars – which are all examples of types of content marketing geared toward informing and engaging users. Relevant and entertaining content will help entice potential clients and keep your current clients coming back for more.
How Much Should You Spend on Content Marketing?
In the old days, all a company had to do was place an ad in a newspaper or magazine, and customers would show up. While that still works to some degree, customers most often flock to companies that are best aligned with their needs. How would a customer know which company that might be? They discover companies that create and share content on social media that is most relevant to them.
Most customers seeking something new — running shoes, for example — don’t simply Google the item and select one at random. They seek recommendations from friends, follow Instagram influencers, and read articles until they find the ones that seem like the perfect fit. And the same goes for almost any customer seeking any product or service.
By creating content that resonates, companies have a hook to entice customers most likely to enjoy their product or service. According to the CMI, “Content marketing is good for your bottom line — and your customers,” leading to increased sales, cost savings, and even better, more loyal customers.
A CMI 2018 study found that the most successful marketers spent 40% of their marketing budget on content (not including staff.) A CMI 2017 statistics report noted that content marketing generates over three times as many leads as outbound marketing and costs 62% less, making it a sound investment. How much of your marketing budget is spent on content?
How Do I Measure My Content Marketing ROI?
To determine your ROI, consider these four factors:
- Content Creation Cost
- Content Distribution Cost
- Sales from Content
- Calculate Your ROI
Content Creation Cost
What kind of content are you creating – and what resources are you utilizing (both in-house and externally)? Factor in the content creator, designer, videographer salaries, the cost of stock or proprietary images, outside video creation costs – and don’t forget to include any other work done outside of your department. Does your staff graphic designer occasionally create artwork to accompany content? If so, make sure to estimate that cost to ensure that you have an accurate assessment of all content creation costs.
Content Distribution Cost
How are you distributing your content? Are you paying to boost your social content? Do you utilize content creation or content marketing software? What about Pay-Per-Click (PPC) Marketing?
You’ll want to add up any investments you make in both creating and distributing your content, and that total is your cost for producing and sharing content with users.
Sales from Content
If you’re able, trace any sales generated directly from your content’s call to action and add those up for the most accurate return-on-investment figure.
Often, being able to directly link sales to a piece of content just isn’t possible. In that case, take a look at our other factors for analyzing your content marketing success below.
Calculate Your Content Marketing ROI
Investopedia notes that to calculate your ROI, you take the current value of your investment (in this case, the sales from your content), minus the cost of your investment (in this case, content creation costs + content distribution costs). You then divide that total by the cost of your investment, multiply that figure by 100, and you’ll get a percentage, which is your ROI.
For example, if your sales from a piece of content is $1,000, and your cost to generate/distribute the content were $250:
Sales minus costs $1,000 - $250 = $750
Divided by costs $750/$250 = 3
Multiplied by 100 300% Return on Investment
The bottom line is that you want to bring in more money than you’re investing. (If your ROI isn’t what you’d hoped, consider these tips to improve your ROI.)
And if you can’t quite link your content directly to your sales, consider these metrics instead.
5 Essential Content Marketing ROI Factors to Consider
There are many variables you can look at to better determine if your content is delivering on your investment, including:
- Leads. Does your content have a call to action, or a lead magnet, to make sure you have a way to track your leads? Lead magnets are typically digital, downloadable content (such as a free eBook, whitepaper, or video) for which users enter their name and email address to obtain. By the user providing such information, you can be assured that these users are extremely interested in what you have to offer.
- Conversions. While converting visitors to leads is a great start, are those leads also turning into customers?
- Web Analytics. Are users contacting you through your website? Do they visit your pricing page? How much time are they spending on your site total? Where are your users coming from? All of these factors will tell you how well you’re doing with user engagement. By looking at these factors, you can determine if your website is giving you the return on investment that it should be.
- SEO. Search engine optimization (SEO) is another sign of content marketing success. How do you rate on Google?
- Social Media. You’re likely distributing a majority of your content via social media. How is your content performing? Is it engaging with users with likes, comments, and shares? Those are good indicators of content success.
Your Call to Action
If all of this seems daunting, rest easy. The Spot On Agency is at your service. Want help in assessing your marketing ROI or determining if your content marketing strategy is solid?
Schedule a time to chat with us. We can share our successes with you and discuss how we can better help your company achieve that important return on investment. Marketing can bring you new customers, but an effective and targeted content marketing strategy can deliver customers who are the right fit and also a solid return of investment when it comes to your content marketing.