Despite a huge surge in adoption of content marketing, measuring the business impact of content is complicated. “How do I calculate content marketing ROI?” is the most common question we hear from marketers struggling to build their own business case internally. Many are plagued by their inability to measure the effectiveness of their content initiatives, usually because they’re measuring too narrowly and vanity metrics such as like and views aren’t enough. Marketers need to be able to measure things that have a quantifiable value that they can take to the bank. In this guide, we’ll map out how to calculate the impact of content across the business and the recommended metrics to benchmark your content initiatives.
Whitepaper by NewsCredAugust 3, 2016
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All marketing spend should be tied to quantifiable results the sales team and executives can understand. Knowing the costs and ROI of other marketing departments will also help benchmark your content marketing ROI program and see how to stack up in comparison.
If you’re not sure what metrics to ask for, here are some to get you started:
Sometimes it can be difficult for companies to carve out sufficient budget to fund new content marketing programs. But we can find this budget if we look in the right places. First, we need to have a solid understanding of your organization’s current content costs and utilization. Every organization creates content, so start with calculating those content costs. Here are the steps:
Next, we need to understand how much of your content actually gets used.
Remember that content that gets created but never used is 100% wasted. Here’s the way to calculate this:
Current content production costs – Amount that gets used = How much your organization is wasting on unused content.
A planned content marketing strategy would provide a platform to share, reuse, and repurpose that unused content in order to grow brand awareness, improve brand health, and drive conversions.
Next, we need to look at opportunity costs from under-performing digital assets. We know that customers are tuning out advertising:
Asking for a small percentage of a larger advertising budget for short-lived campaigns is a good place to start looking for budget donations.
There are a few different ways to go about this, and the main three things to measure are brand awareness, brand health, and conversions.
In other words, how many of your early-stage prospects are finding their way to your company website?
Content marketing allows you to gain additional reach, engagement and conversion without having to pay for it. You can literally earn your audience’s attention vs. buying it.
Organic search traffic can be calculated easily via Google Analytics.
Here’s what this flow looks like:
You will then see the keywords people have used to find your website and the number of visits and percentage of overall visits you have received from each keyword. In this example, the site has received 359,953 visits from organic search traffic, totaling 25% of overall traffic.
Next we want to see how much paid traffic we’re receiving, which we can also find in Google Analytics’ ‘Paid Keywords.’ In this example, let’s say we spend $100,000 on paid search traffic for 1,078,779 visits.
Based on those numbers and percentages, we can calculate the value of that organic traffic. In this example, let’s say we spend $100,000 on paid search traffic.
Any visitor that searches your brand name already knows where they want to go. Unbranded organic search traffic is important to calculate because we want to know about the people who didn’t know where they would end up. They had a question or need, asked a search engine for direction, and that interaction brought them to you.
To calculate unbranded organic search, we need to exclude your brand or products’ name from the search. To do this, create an “Advanced Filter” that will exclude those branded keywords. In this example, our brand and products contain the word “Raspberry.”
Let’s say the results showed that now with excluding branded keywords, your site’s organic search traffic accounts for 269,694 visits, or about 19% of total organic traffic. We go back to our table to calculate the value of this traffic.
This essentially measures how much your brand or product is talked about compared to your competitors.
First you want to choose a group of words based around your brand’s product or service. When choosing your words, be sure to stay within a common theme. In this example, we’ll use a dance brand.
Source: Moz, How to Calculate Share of Voice for Organic Search
In general, it’s better for your SEO strategy to focus on a specific topic. Think narrow and deep, instead of broad and shallow.
Next, choose your competition. Who do you want to compare yourself against?
Be sure to know what URLs you’re wanting to track of your competitors. Some may use off-branded URLs for their content marketing efforts. For example, ConAgra’s content marketing is done on an off-brand site, Forkful. The site provides time-saving kitchen tips and advice for cooking with kids.
Now record the rankings for each keyword you selected for yourself and your competitors. If you do rank, record in what position. (Note: You can rank more than once.)
When doing this, keep in mind there is no point in looking at more than the top 10 because only 2% of users travel to the second page of Google.
If your rank more than once, simply add the click through rates to find that keyword’s total share of voice.
To find your overall share of voice, average the share of voice for all of your keywords.
If there’s a gap between your market share and your share of voice, that means your competition is wooing your prospects before you!
If you’re like most brands, you probably promote yourself too much and people learn to tune you out.
Brand health measures how your digital audience feels about you.
Let people get to…
When determining your time on site goals, it’s important to keep in mind why someone is going to your site. The biggest takeaway is that not all time on site is equal.
96% of people visiting your site aren’t actually ready to purchase from you (Source: Social Media Today, 2014).
So you need to think of other ways to bring prospects back to your site so that when they are ready to purchase, they choose you. If your ultimate goal is to sell a product or service, you’re much more likely to sell to visitors who come back time after time.
Repeat Visitor Ratio (RVR) measures the percentage of visitors who return to your site after an initial visit during some specific time period.
Let’s say you got 4,000 visitors this month and 800 were repeat visitors. 800/4,000 = 20%.
RVR is great way to determine whether you are successfully engaging your site visitors. New visitors are fine, but repeat visitors are great since once you “have” a new reader you don’t have to spend time and money attracting that reader–your content is sufficient. So the higher your RVR the better your website must be at engaging the average new visitor.
To put a monetary value on RVR, we need to look at the average amount you’re spending in advertising to drive net new traffic. For our example, let’s say you’re spending $5,000 per month on advertising to drive new visitors.
If 80%, or 3,200 visitors are net new, you’re spending an average of $1.56 per visitor.
$5,000 / 3,200 = $1.56
Taking that finding, we can then calculate the value of our 800 repeat visitors. 800 * $1.56 = $1,250
Therefore, our repeat visitors are valued at $1,250 per month.
1. Better targeting in your marketing
2. Provide great content
3. Ensure site navigation is streamlined and intuitive
4. Constantly create new content to keep the site fresh and relevant
Don’t forget that while you want to increase the percentage of repeat visitors, you also want to increase the total number of visitors… Otherwise you’ll be preaching to the same choir.
Your email list is an asset, and should be valued as such. But first thing’s first: You must know your maximum allowable cost threshold for getting a new subscriber, otherwise, you’re spending in the dark – or, worse yet, to the point of negative returns.
Knowing your cost to obtain a new list member is the only way to determine how much you can actually afford to invest in growing your list sign-up… And what your maximum allowable cost to obtain a new subscriber should be.
As a general rule, your list sign-up cost per acquisition (CPA) should be well under your average sale amount from a new customer and within range of what you pay to obtain other valuable actions, such as webinar sign-ups, free content downloads or even direct sales.
First, calculate what it actually costs you to get a new subscriber from each list-building method.
Now we need to determine your maximum allowable CPA for acquiring a new list member, and continue to invest in the methods that fall at or below your CPA.
Let’s say you’ve tested a few tactics and decided that your maximum allowable CPA for a new email address is $1.50. Moving forward, you’ll want to continue pursuing all methods costing $1.50 or less.
Over time, we need to also measure the quality of the subscribers on your list by monitoring things like average sale value and unsubscribe rate.
When you analyze the data, you’ll easily be able to spot the methods that produce the best quality and quantity of subscribers within your allowable CPA. The higher the quality of subscribers you attract, the more likely they are to convert to becoming not only customers but also your best customers-resulting in more revenue from which to raise your CPA.
To calculate the value per subscriber, we need find the difference between the sale value and cost per acquisition for the subscribers. To do this, we use the formula below:
VALUE PER SUBSCRIBER = ( QOS * ASV * ( 1 – UR ) – QOS * CPA ) / QOS
We’ll use Facebook Ads as an example:
VALUE PER SUBSCRIBER = ( QOS * ASV * ( 1 – UR ) – QOS * CPA ) / QOS
VALUE PER SUBSCRIBER = ( 200 * 100 * ( 1 – 0.30 ) – 200 * 2.30 ) / 200
Therefore, the value of each Facebook subscription is $67.70
Based on these calculations, we can see that paid search and webinar methods return the most value per subscriber.
However, since paid search’s CPA is more expensive than our maximum allowance of $1.50, we should defer to webinar and Twitter tactics.
Your site’s bounce rate is a metric that indicates the percentage of people who land on one of your web pages and then leave without clicking anywhere else on your site.
A high bounce rate is a reason for concern since it indicates that your website visitors aren’t looking for more content on your site, clicking on calls-to-action, or converting into contacts.
Since attracting and converting visitors into qualified leads is the main objective for content marketing, this is an important metric to measure and improve.
Why do visitors bounce? Two reasons:
1. They didn’t find what they were looking for
2. The page wasn’t user friendly
So what can you do to improve your site’s bounce rate?
While social shares can be seen as an engagement metric, but should be quantified as a free source of distribution and reach.
Let’s say you spend $1,000 on paid social distribution and reached 5,000 viewers.
For this campaign, each view was worth $0.20 ($1,000/5000).
Now let’s say a social post was shared organically by your followers and reached 500 viewers.
Based on the value of each view from our paid distribution, we can also value our 500 organic views at $0.20 each, or $100 total.
Brands should also track if their social follower growth positively correlates with their total number of shares. If it does, this would indicate that your organic social shares are reaching the right audience for your brand.
Google has stated that it uses more than 200 factors to rank a web page, but which are the most important?
There is one thing virtually all SEO experts agree upon: The number and quality of links coming into your site is near the top of the list.
So how can you measure your off-site SEO?
What to do with this data?
These are prospects who became customers because of either helpful, useful and/or entertaining content you provided them.
Calculating content marketing’s cost per lead is crucial in order to benchmark your program’s effectiveness against other marketing programs.
Determining this is quite simple. To begin, we need to know the costs accrued to create and distribute the content.
In this example, we’ve created two pieces of content:
For the ROI Guide, we spent $3,000 to create and invested $10,000 to distribute
For the Strategy Guide we also spent $3,000 to create, but spent $20,000 to distribute
Combining these costs, we can see that the ROI Guide cost us $13,000 and the Strategy Guide cost us $23,000.
Now that we know how much our content cost to create and distribute, let’s see how the content did in terms of lead generation to calculate cost per qualified lead.
Our ROI Guide generated 550 new leads, 205 of which were qualified leads.
To calculate cost per lead, we want to take the total cost ($13,000) divided by the total number of qualified leads (205).
$13,000 / 205 = $63
Therefore our ROI Guide cost $63 per qualified lead.
To determine an accurate average total cost per lead of content marketing, we’d want to take a larger sample, but for the purpose of this guide, we’ll simplify and average these two costs.
$63 + $177 / 2 = $120
Therefore our average total cost per lead for content marketing is $120.
In order to determine the percentage of leads from content marketing, we first need to gather total number of leads sourced from other marketing programs.
Looking at this gathered data, we see that content marketing accounts for 205 of the total 710 marketing qualified leads. To find the percentage, we take 205/710 to find that content marketing accounts for 28.9% of total qualified leads.
Finally, to determine the actual revenue sourced by content marketing, we need to look at conversions.
For this example, let’s say our content marketing has a conversion rate of 50% and the average sale is worth $500.
To find our total conversions, we need to multiply our total qualified leads by 50%
205 * 50% = 102.5 conversions
Based on that finding we assume these sales will average $500, so to find the total value we • multiply 102.5 * $500 = $51,000
Therefore, our total content marketing conversions are worth $51,000