Measuring the performance of your content marketing activities is the first step in understanding the ROI of your content marketing program. The other step is measuring the cost of the program. Together, these two measures will give you the traditional ROI value.
The ROI formula is the easy part
The formula for ROI itself is very straightforward - (Performance - Operations) / Operations
What’s more complicated is knowing what you want to determine ROI for. Do you measure conversions? Repeat sales? Purchases? Decreased support costs? Increased Cross-sells?
Depending on what you want to measure the ROI of, the performance metrics and operations metrics are going to be different. Not only are the performance metrics different, but the value placed on each performance metric may also be different.
There is no industry defined value for a “like” or a “share”, There’s no industry defined value for a “lead” vs. a “qualified lead”. These values you must identify for your company based on your perspective of their worth and other contributing factors.
Operation costs, on the other hand, are easier to identify. You know how much you paid for a content asset to be written and designed. You know how much you pay for distribution - whether it’s a landing page on your website and or a call out to a series of media sites, and for promotion - a press release, a series of social media promoted messages or a blog post. With little work, you can get an operational cost.
If you’re going to put time into determining ROI, do your homework first. Know the business goals you want to achieve and how you can realistically measure them. Figure out what specific KPIs will tell you how things are doin,g and then figure out what mix of performance metrics will give you that KPI. Make sure you know how you are paying for production, distribution and promotion, and how you apply those costs to a particular asset or campaign. Then combine the two to get your ROI.
But ROI isn’t always quantitative
It was all just starting to make sense to you, wasn’t it? But here’s the first kicker - ROI doesn’t necessarily equate to a dollar value.
Sometimes your ROI is qualitative:
- brand awareness (this one is tricky because sometimes it is quantifiable)
- recognition as a thought leader
- increased customer advocacy
- increased employee advocacy
Some content marketing activities are challenging, if not impossible, to place a dollar value on. They are equally important for your content marketing plan.
In these cases, instead of looking at ROI in terms of costs, look at ROI in terms of quality of content. Is my content the best content for my customers? My employees? Am I supplying them with the most relevant information they need? Am I developing strong relationships?
The challenge here is identifying what “quality” means for your organization, and for your customers.
Comparing apples to oranges in marketing
Determining the value of content marketing is different than determining the value of say, an SEO program. David Meerman Scott says that content is not an expense like other traditional marketing activities. Most typical marketing activities are performed in a specific timeframe - you do them, and then they are over. Like going to trade shows, running an AdWords program and so on. You measure performance for a specific period, and the activity happens for a specific time. Once it’s over, you measure if it was successful, then you move on.
But content is different. Content sticks around, and if you’ve created it well, it doesn’t matter how old it gets - it’s still useful to your customers and prospects. Evergreen content (content that is created to last for a long period) is often the best content to create - you certainly get the most value out of it because you can leverage it over a long period - and in many different ways.
Maybe that’s what Robert Rose means when he says content isn’t an asset, it’s an investment. When you look at content like it’s an asset you create and use, you can easily apply a value to it. A campaign focused on a white paper that costs $5000 to create, and resulted in 500 downloads, and five conversions, can have an actual ROI value applied to it.
But that same white paper is used after the campaign is over. It’s on the website, it’s on Slideshare, it’s broken down in blog posts or an infographic for the website, or a thought leadership article for a media site. The content in that white paper has value that’s hard to determine ROI for, because it can be used in so many ways, and over a long period.
You could map the ROI of that paper over a long period. But it’s a lot of work - a lot of manual work. And you might have ten white papers a year alone, not to mention other content you need to manage.
Rose also says that we need to see ROI as progress towards a goal and not a destination. Maybe the idea then is that we can track the ROI of content in a particular campaign and see how well it performs, but also understand what that means in the bigger picture.
Rose suggests to measure and track, but not report every metric to the executive. Instead, focus on clearly demonstrating how the metrics overall are driving you towards your end business goal. One metric doesn’t provide the full picture, you need to look at a number of metrics as a whole to understand the effectiveness of your content and overall strategy.
Final thoughts - the best laid ROI plan
I can do a Google search on content marketing ROI and get millions of results - and not one of them will provide me with a detailed, fully explained plan to measure the ROI of my content marketing plans.
It doesn’t exist. Content marketing ROI is not plug and play.
To make things more frustrating, the perspectives on the need to measure ROI for content marketing are changing. Is ROI what needs to be measured to prove the success of a content marketing plan? If it’s not, then what is?
Right now you have to show your content marketing budget is worthwhile. There are some businesses who will, for a short period, allow you to experiment with content marketing (you still need a plan though). But at some point they will come back and ask you to show how what you are doing is making a difference to the bottom line - how it’s improving some business goal.
Find a happy medium between measurement and experimentation.
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