Measuring Content ROI: A Step-By-Step Guide To Calculating Value
Content marketing is a difficult and time-consuming process.
If that wasn’t bad enough, trying to measure the success of your efforts and determine the return on investment (ROI) from content adds to your headache.
If you rely on stats like bounce rate or time on page, you’ll find it extremely difficult to accurately measure ROI.
Don’t fall victim to vanity metrics.
To determine true ROI from content, you must be able to answer this question:
“Does my content drive people to take action?”
If the answer is yes, does that action impact your revenue stream directly or indirectly?
If the answer to either question is no, you’ll need to rethink your strategy if you want to gain measurable value from the content.
In this post, I’ll show you exactly what to look for when measuring ROI from content.
Let’s dig in!
The Role Of ‘Content’ In Content Marketing
Many people equate content marketing to writing.
It’s an easy mistake to make.
But content marketing is more than pumping out blogs.
It’s a strategic process that requires keyword research, brainstorming ideas, and promoting what you create.
While many of these activities are ‘behind the scenes,’ you can’t ignore them.
They have a role to play – just like blog posts, landing pages, email campaigns, and eBooks play a role in your sales lifecycle.
For example, blogs sit at the top of your funnel.
At this level, the role of content is to raise brand awareness and allow those unfamiliar with your products and services to build trust in your expertise.
Likewise, content in the middle of your funnel has a distinct job: to transition cold leads into warm prospects.
Despite the influence of content in these early stages, it’s rare for someone to become a customer after being exposed to a blog post or eBook.
To convert visitors into paying customers, you must expose them to content at the bottom of your funnel.
Traditionally, this is when it’s easiest to measure ROI from content.
All you need to do is calculate how much it cost you to create a landing or sales page and compare it against how much money it brings in.
But ROI cannot always be defined in terms of monetary returns (macro goal).
Like we’ve seen, content formats like blogs and eBooks indirectly contribute to your money machine.
To measure ROI from these activities, you need to define micro goals.
A micro goal is any metric that eventually contributes to your macro goal.
Let’s look at an example to understand this better.
Pretend you have a blog page with undesirable bounce rate and time on page. Your instinct tells you that this page is not positively contributing to your bottom line.
This is how not to approach this situation.
Metrics like bounce rate are indicators of how content is performing. They don’t tell you anything about the impact of content on your revenue stream.
What you should be looking at instead is engagement.
Despite a high bounce rate, that blog page might have thousands of social shares.
Does that not make this content successful?
It’s doing what it’s supposed to do at this level – bring traffic into the funnel.
We can break down returns from content into three distinct goals – engagement, lead generation, and sales.
Because of misaligned expectations, only 8% of marketers feel they can track ROI successfully.
But this isn’t the only cause.
Not accurately accounting for cost of content also muddles ROI calculations.
Measuring ROI – What Are The Costs?
True or False: The cost of content is how much you pay someone to create it.
The correct answer is neither. Yeah, I know. Trick questions are mean. Bear with me.
While labor is a cost factor, it’s not the only one. Promoting content costs money and so do tools and resources you use in the content creation process.
Let’s look at how to properly measure costs:
Cost Of Content Creation
Note: As I go over the next few steps, replace data mentioned here with your own company’s financials.
- Labor cost
Great content doesn’t create itself.
You have to pay someone to create content for you whether it’s an in-house employee, freelancer, or agency.
Even if you create it yourself, that’s time you could have invested elsewhere.
Let’s you’re working with a freelance writer who charges $25/hour.
If you outsource your entire content process to this person, you’re paying them for more than just writing content.
You must also factor in the cost of content research.
How much time does this person spend developing and outlining ideas for you? These activities are equally billable as writing the content.
So whether you’re calculating the cost per project or by month, factor in everything you’re billed for.
- Cost of tools and resources
Like any handyman, content creators need tools to do their job.
For example, let’s say a copywriter is trying to figure out what keywords to target for your next blog post. He or she will need access to a professional-grade SEO tool.
Licenses for their use can set you back a couple hundred dollars a month.
Will you be using an email automation tool to respond to contact forms and lead magnets on your content pages?
You’ll have to cough up for an email automation tool, too.
And don’t forget about the cost of web hosting where your content sits, and the cost of getting the page added to your site (if you have a developer that posts new pages, or if it takes you some time to do so).
Simply put, if you’re paying money for a tool or service that’s being used in your content process, you need to include it as a cost of content creation.
Content Promotion Cost
Are you promoting your content?
If not, your returns won’t be much to write home about. This isn’t the field of dreams. Writing an awesome piece of content won’t do you any good if no one knows it exists.
Content promotion in a fast-moving online world is mandatory.
And of course, it’s not free.
It costs you time to find and email influencers and money to run paid ads. You can’t overlook these expenses.
Outreach is the act of manually placing your content in front of other people.
Some well-known outreach tactics include emailing people, making posts on social media, and guest blogging.
If you do outreach on your own, the cost of this activity is time.
Assign a concrete dollar value to an hour of your time to determine how much content outreach costs you.
If you’re hiring someone, calculating cost is easy.
Just look at how much you’re being billed.
For example, if you’re paying a link builder $2,000 for every 5 backlinks, content outreach costs you a minimum of $2,000.
- Paid ads
Waiting around for organic efforts to bear fruit is playing with fire.
Smart marketers will use Google and Facebook ads to promote their content to the same target audience that you’re trying to reach.
While ads cost money, the fee is generally nominal.
How much you spend is easy to determine.
Calculate the cost per ad impression or simply look at the budget of an ad campaign (only if it’s promoting one piece of content).
For example, let’s say you set a budget of $50/platform/week to promote a blog post on Facebook and Google over a two week period.
The cost of ads to promote this content will be $200 (assuming your ad is shown often enough to max your budget).
To sum up, to accurately determine the cost to produce and promote a piece of content, you’re going to need to calculate:
- Time spent in idea brainstorming and research
- Cost of any research tools
- Time spent writing, formatting, etc
- Time spent building any associated lead magnets
- Time spent posting new content to your site (including adding proper meta tags and descriptions so the page can be crawled and cataloged)
- Cost of email automation, if applicable
- Time spent writing autoresponder emails (to send lead magnet or reply to contact form)
- Time spent promoting the piece
- Cost of paid ad campaigns, if applicable
Take a moment to map out the process of getting a piece of content added to your site – from the moment when you decide “I need a piece of content to do X,” through to promotion – and tally up your costs.
Measuring ROI – What Are The Returns?
Once you have a grasp on the cost of content, it’s time to evaluate returns.
Calculating ROI involves a logical progression down the funnel.
In the first two stages, you’ll have to compare costs against POTENTIAL returns. Once you reach the last stage, you can define returns numerically.
To better understand this, let’s walk through a sample calculation:
Top & Middle Of The Funnel (TOFU, MOFU)
To start this example, I’ll use blogging as a TOFU activity.
Note: You can use this approach with any content format found in the funnel.
Blogs exist for two reasons.
To increase the number of keywords your brand is searchable for and to improve SERP visibility.
To find your ROI, determine how many clicks or impressions your brand receives as a result of your blog content.
You can find this information in places like Google Analytics, SEMrush, or Ahrefs.
With SEMrush and Ahrefs, you can compare click-through rates of your blog content with your competitors to see where you stand.
Once you know how many clicks your blog brings in, figure out how much each click is worth.
One way to do this is to calculate conversion rates of your clicks.
For example, what % of people who click on your blog go on to download a lead magnet, sign up for a newsletter, and eventually make a purchase?
This isn’t an exact science and there will be errors.
But doing this calculation will give you a good estimate of your return from blogging.
For example, let’s say your blog costs $2500/month to run.
And this brings in 5000 unique visitors.
But not every one of these visitors will go on to become a paying customer. You need to find out how many people convert down to the MOFU.
Here’s how you solve this:
Look at the number of hits to your ‘thank you’ pages. This page should only be accessible to people who fill out your opt-in form.
Let’s say conversion rate is 2%.
So, out of 5000 visitors, only 100 will become ‘engaged’ with your brand.
While you’re doing this, remember to keep track of your costs.
How much did it cost you to get visitors to this stage?
In our example, the blog costs $2500/month to run. What about the cost of creating an eBook or running a newsletter?
If that’s an additional $1000/month, these 100 engaged visitors actually cost you $3500.
So far, we’ve racked up expenses with no returns to offset them.
This will change once visitors trickle down into the bottom of your funnel. This is you when you’re most likely to convert visitors into paying customers.
Let’s wrap up our ROI calculation with this last step.
Again, the first step is to figure out is conversion rate from MOFU to BOFU.
How many of the 100 engaged visitors become customers?
For example, if conversion rate is 5%, only 5 visitors are serious contenders to become paying customers.
How many actually become a customer?
None? 3? Some other number?
If no one converts, you know there’s a flaw with your content in this last step.
Most likely though, some engaged visitors will convert.
Let’s say 3 out of 5 engaged leads fork over their money.
How much is their business worth to you? To arrive at the answer, you’ll need to calculate your customer lifetime value (CLV).
Here’s how you do it:
Take your product cost, multiply it by the length of time a customer remains a paying customer, and subtract acquisition and retention costs.
So, if your product costs $50/month and the average buyer subscribes for 2 years (24 months) before churn sets in, CLV is $1,200 (50 x 24).
And when you factor in acquisition and retention cost, CLV will decrease.
For this example, let’s assume acquisition and retention costs total $100. This will put your CLV at $1,100.
How does this tell you ROI from content?
Multiply CLV by the number of new customers your content brings in.
So finishing our example:
- CLV = $1,100
- Content brings in 5 serious customers, of which 3 convert
- $1,100 x 3 = $3,300
Return on this piece of content is $3,300.
Earlier in this example, we had calculated the cost to create and promote this piece of content was $3,500.
Since ROI is less than cost, you’ll need to reassess your funnel for underperforming content.
Be creative and experiment.
To improve ROI, you can either increase your content’s performance or reduce the cost of your content.
Ideas On How To Reduce Content Cost
Measuring content performance is tricky, as you’ve seen. A guaranteed way to increase your ROI from content is to reduce its cost.
One tactic you can use is to repurpose content.
For example, let’s say you pay $500 for an epic blog post.
Why not make a video summarizing the main points of the piece, or talk about it in detail in a podcast episode?
Not only does this reduce cost but opens up new channels to bring in qualified traffic.
Wishpond used this hack to repurpose a blog on growth hacking into a SlideShare presentation.
And here’s the same content on SlideShare.
Also, be patient when measuring ROI.
Content lives on forever, particularly if you keep it evergreen and continue promoting it.
It can take time for content to gain traction. If you measure ROI to early in the process, you might doing yourself a disservice.
Wait and watch.
Revisit content every few months to remeasure performance before you decide to change your content strategy.
Qualitative Measurements To Keep In Mind
Being able to measure ROI is great, but it’s not always helpful.
Let’s say your boss asks you to define ROI of a TOPU or MOFU activity.
How do you respond?
If you say that there’s no measurable value, you might find your content marketing budget rescinded.
The right approach would be to talk subjectively.
For example, you might say that your blog or social campaign was successful in establishing brand presence.
You can measure this by running surveys asking site visitors how they feel about your brand.
Here are some qualitative ROI factors worth exploring:
- How many new ‘followers’ does content bring in?
- How many other pages do they visit after landing on the content page?
- What’s the sticking power of content? (repeat visitors)
Links and Shares
- How many users endorse your content?
- Does content increase brand visibility?
- How engaging is your content?
- Discussions spark visitors to come back
- How many people are downloading your resources?
The trick is to relate a subjective metric with a desirable action that people take.
Content Done Right Returns More than Money
Measuring ROI from content is a daunting task, but not an impossible one.
Just remember that ROI does not always equate entirely to a monetary value.
Reaching new customers or engagement with your brand in a meaningful way carries value to your total digital marketing strategy.