A Clear and Simple Guide on How to Measure Your Content Marketing ROI
Content marketing is all about creating content to attract visitors that hopefully turn into customers, and most businesses that use it know it’s effective.
The question is, just how effective is it?
25% of B2C marketers say they don’t measure or don’t know how to measure ROI on digital marketing.
Measuring the ROI of your content isn’t synonymous with the success of it—they’re interdependent. Without determining what successful content means for your brand, it’s impossible to measure the ROI, and vice versa.
In this guide, we’ll break down how to measure your content marketing ROI and give you a few examples to show you how it works.
Content Marketing (CM) Measurement
You want to grow your business at the lowest possible cost, so you must learn how to align your content marketing metrics with that goal.
When measuring ROI, there are three aspects of each metric you measure. Those include deciding what to track, measuring and managing the data, and turning the data into actionable insights.
Deciding What to Track
Almost anything can be measured, but that doesn’t mean you should measure everything. Decide what you want to measure by:
- Distinguishing your top measurement priorities and the data you need to support them
- Developing performance standards for your analyses
- Calculating the initial costs involved in executing your content plan—so you can conclusively calculate a return on your investment
Ultimately, you must decide which key performance indicators (KPIs) to track as proof of your content’s impact. These KPIs can be anything from email open rates, subscriber counts, and opt-out rates, to page views, post engagements, and bounce rates.
How to Measure ROI on Digital Marketing With a Formula
Here’s a simple formula to follow when calculating your content marketing ROI:
[((number of leads x lead-to-customer rate x average sales price) – cost or ad spend) ÷ cost or ad spend] x 100
To use this formula, you need to classify the following items:
- The number of leads: How many visitors converted to a lead?
- Your lead-to-customer rate: What percentage of these leads turned into customers? If 16 out of 100 leads turn into customers, your lead-to-customer rate is 16%.
- The average sales price of your product
- The cost to create or your ad spend: How much did you spend while creating and promoting the content?
Examples of Content Marketing ROI Measurement
Let’s go over a few examples of how to determine financial ROI for a few common content marketing strategies. Plus, we’ll include fictional scenarios to show you how the formula works.
While blogging isn’t as expensive as video marketing, written content still costs time and money. If blog content is part of your marketing strategy, consider the time-related costs, production costs, and the cost to promote the content into your total spending.
Track the number of hours your employee or freelancer spends on the project, then multiply that number by their hourly fee to translate time into a dollar amount.
Use a tracking URL if your blog links to a landing page so that you can see how many visitors are landing on the page directly from your blog. You can test how efficient your strategy is by tracking visits, leads, and customer conversions related to a specific blog or article.
Written Content Example
A contracting company that specializes in water-proofing basements wants to gain more clients. They decide to write five blog posts about the dangers of water in your home. Each of the blog posts contains a tracking URL that links to the company’s landing page, where prospective customers can fill out a form to request a free quote.
To pay employees to write the blog posts, the company spent $900. Then, they spent $100 to promote these posts on social media. From the eight leads garnered by the posts, four leads become clients. The contractor made an average of $2,000 per client.
This formula is how they would calculate their ROI:
[((8 x 0.5 x $2,000) – $1,000) ÷ $1,000] x 100 = $700
If the contracting company is satisfied with these numbers, they might continue to write five posts a month, without changing their strategy. If they want to experiment with increasing the ROI, they might try video marketing to see if it is more lucrative.
Despite what some marketers may think, email is still a super useful marketing tool. Marketers report that email is 40 times more effective at acquiring customers than Twitter and Facebook combined.
Your email marketing ROI will depend on how big your subscriber list is, the type of email ad, and your target audience. With email, you probably don’t need to track production time, but you will want to monitor the traffic driven to your site. Again, we suggest using a tracking URL.
Email Marketing Example
A local salon sends a weekly newsletter to subscribers, and a nail polish boutique pays them $100 to place an ad for their newest product.
The ad is linked with a tracking URL, so the nail boutique can see that it drove 50 visitors to their website. Of those prospects, 20 people placed nail polish in their cart, and 17 purchased a bottle.
Their formula to calculate ROI would look like this:
[((20 x .85 x $20) – $100) ÷ $100] x 100 = $240
Once the nail boutique sees the money they gained from the newsletter ad, they might continue to place an ad each week.
Almost all marketers use video marketing to drive company growth. And 8
Video Marketing Example
A video-licensing company is launching a new platform that allows filmmakers to purchase the rights to broadcast TV segments to use in their documentaries. The company has a landing page encouraging visitors to sign up for a demo, but there hasn’t been much interest.
They attribute the slow start to the average filmmaker, not understanding how much easier their platform will make life for them. So, the company decides to create a demo video instead to show potential clients. The video is shared on social media along with a tracking URL to the demo signup page. The video is also shown on the landing page.
The company spent $300 to buy video equipment and $200 in labor to produce the short video. After it was promoted, it resulted in five demo signups. From those signups, three people purchased the $2,000 product.
Their formula would be:
[((5 x 0.6 x $2,000) – $500) ÷ $500] x 100 = $1,100
$1,100 is pretty good, so the video-licensing company may continue to make demo videos. And since they’ve made a one-time purchase of video equipment, they won’t need to calculate that cost into determining the ROI of future projects.
Consider the Additional Benefits Beyond ROI
As a marketing professional, your ROI goal should be to make more than a dollar for every dollar you spend on content marketing. What is considered “good ROI” may vary depending on your type of marketing strategy, your distribution channels, and your business’s industry.
Most marketers care about more than revenue. If you’re passionate about your marketing strategy, you want to know who is seeing your content, how they’re engaging with it, and how it makes them feel. Explore these metrics when determining your ROI, even if you only share the results with other marketers.
Don’t forget to include hard-to-quantify benefits such as visibility, brand recognition, and the eventual value your content will bring (not just at the time you’re measuring your ROI).
Don’t get discouraged if your ROI isn’t as high as you’d like it to be. Digital marketing ROI is hard to gauge, so you should think in terms of long term engagement, SEO, and customer interaction rather than immediate revenue.
These metrics don’t offer immediate financial returns, but they have the power to boost purchases or build customer loyalty down the line indirectly.
Now You Know How to Measure Your Content Marketing ROI
If you’ve measured the same metrics for years without seeing the results you’re hoping for, you might need to rethink how to measure ROI on digital marketing.
Once you know how to measure your content marketing ROI, you can make a case for investing more in content marketing tools and technologies that will continue to convert leads into customers.
Don’t let your good ideas fall by the wayside. We can provide a thorough marketing plan that is unique to your business. And once we’re done, you can do whatever you want with it.
We’re great at doing what we love, and that’s working with businesses like yours to analyze and revamp your current digital assets so you can edge out your competition. Check out our plans to get started today.