We may enjoy talking about ourselves and our companies to our customers, blog readers, and social media followers, but we do this not merely as a labor of love—we do so to run and grow our businesses. Certainly, we’re aware we live in the Information Age, where content is king, and we hustle each day in what experts have come to call the attention economy. But beyond all this, how do we know when our hard work and investment have paid off? Sure, we’re playing by the rules, but are we being rewarded for it?
It can be hard to know whether you’re getting a healthy and robust return on investment (ROI) from the content you produce. We’re forced to ask ourselves questions for which there are far from concrete answers to, like, How much are 2,000 new Instagram followers worth? Or, When will the $1,500 I spent on blog posts this month start showing results? To be sure, even if you have vast resources and cash, and could run reams and reams of analytical and algorithmic code, calculating return on investment is not an exact science. But your money, your time, and your labors are important, and there are some ways to be smart about—and even measure—the results of your content marketing efforts.
The best place to start is by making educated decisions about your marketing investments. Email marketing, for instance, is generally regarded to yield significant results. Statistics vary on this, but the numbers are impressive. Click-through rates (CTRs) for email lists are 47% higher than those of other marketing strategies, and customers who receive emails spend 138% more than their counterparts. Emailmonday found, in 2015, that email returns $38 for each $1 spent, meaning email marketing can furnish businesses with a staggering 3,800% return on their investment. On a humbler note, in 2016, eMarketer argued that email generates a median ROI of 122%—surely much less grand than the previous figure, but evidence enough that anyone who wants to see their business grow, would profit considerably from investing in email marketing. The sheer effectiveness of email campaigns might explain why the two most used content marketing tools among business-to-business firms, according to the Content Marketing Institute, are email marketing software and analytics programs.
But it’s not only email that propels company growth. HubSpot has found that businesses that invest in blogging enjoy, remarkably, 13-times the return on investment that non-blogging businesses do. And eighty-eight percent of business that invest in video, too, report a profit from their efforts. And, on the more traditional marketing side, Google Ads returns $8 for every dollar spent by the average marketer.
While these data-backed guidelines are valuable, we must also acknowledge that not all businesses have the same goals and priorities. An ecommerce business selling cookware will have an easier time assigning a dollar amount to their ROI benchmarks than, say, a cybersecurity business that operates in long, large sales cycles. The former wants to make as many sales as possible through its website, while the latter wants to generate awareness and leads, so they can then talk to, educate, negotiate with, and sell to clients outside of their website. The ROI-savvy ecommerce website will want to calculate how much its average customer spends, and what it spends engaging them. The ROI-savvy service-oriented business will want to assign a value to each lead, based not only on average customer spend, but also on the probability that a lead will become a customer.
On the way to understanding our ROI, we’ll have to be familiar with analytics tools. Perhaps you host your site on a customer relationship management system like Insightly or HubSpot, that provides you with ample data on your site’s traffic, your email click-through rates, your new leads and sales, and other critical points of interest. If you’re very savvy, perhaps you’ve invested in a dashboard like Chartbeat. But you can always join 27 million other websites in employing Google Analytics, which is free, but intricate and complicated.
Let’s first bear in mind that Google Analytics can’t encompass everything, especially not for B2B firms. "For a service business, calculating blog revenue depends much more on your revenue tracking platform — and that's outside of Google Analytics,” observes Carly Sila, a senior technical SEO expert at the marketing agency Silverback Strategies. “Service businesses typically have a longer sales process, and Google does not collect that information. It’s hard to marry the data between the revenue tracking platform and Google Analytics because you can't easily go back and combine the two.”
As mentioned earlier in this article, B2B firms will want to evaluate their marketing budget against the value of their new leads. They can do so with some intuitive math. A lead-oriented marketing strategy will want to determine their average customer spend, by dividing revenue for a time (say, for a quarter), over the customers who bought from them over that same period of time. Let’s say that quarterly revenue is $30,000, and that they had five customers during that time. Each customer, then, spent an average of $6,000. But let’s also account for how many leads they generated that quarter, let’s say six. Thus, each lead is worth five-sixths of that $6,000 closed-lead value, meaning that that business can value each lead at $5,000. This figure is a critical benchmark in evaluating the ROI B2B firms receive, and will inform their decision to invest more, or less, in aspects of their marketing presence.
Though the tool cannot incorporate revenue that happens, as it often does with B2B businesses, at point of sale outside the website, Google Analytics, when used intelligently, can serve as a vital asset Databox provides a helpful guide to creating or adopting dashboards on Google Analytics, focused on metrics SEO efficiency and content marketing results. A certainly helpful one, that could be used in tandem with another dashboard that more deeply looks at site traffic, is an ecommerce dashboard, created by Blast Analytics & Marketing, which underscores where purchasers are coming from, which is critically important in demonstrating which facets of your content marketing are driving revenue:
There’s often no rigid, definite method to calculating return on investment here, but in linking your site’s traffic patterns to your sales data, you can get appreciably closer to understanding it. Say, in this month last year, your site had 10,000 monthly visitors, and $10,000 in revenue, and in this month, you enjoyed 15,000 monthly users, and $15,000 in revenue. You’d be set up with a very consistent, almost-too-simple formula, with each visitor to the site worth clear $1 in revenue to your business—but this case has some use for our purposes. Let’s say you spent $3,000 paying writers, social media editors, and graphic designers, to run your content marketing for the month, when a year ago, you did all such marketing yourself, for no dollars (though dedicating plenty of time). Let’s then attribute the $5,000 in increased revenue to your new $3,000 strategy. Going by the ROI formula, in which content marketing expenses are subtracted from growth in revenue ($5,000 - $3,000, equaling $2,000), then divided by the same expense figure ($2,000 / $3,000, equaling two-thirds), then multiplied by 100, we get a 67% return on investment—certainly favorable, and certainly worth the expenditure.
It would, of course, be possible to interpret these numbers differently. In the above example, I calculated my return on investment year-over-year, when I could, a bit more impatiently, decide to crunch these numbers month-over-month, which would very likely make the return on investment less impressive. Or, the patterns might diverge, and a customer might be worth $1.2 in one month, rather than $1, and I might want to adjust my math around that piece of good news.
Measuring the return on investment on content marketing is not a concrete art, but consistency in your calculations—which do not, as you’ve seen above, have to be so sophisticated—can give you a critical, reliable sense of what does (and doesn’t) work for you, and will give you the confidence to invest properly in your employees, and find those customers eager to do business with you.