Content Marketing is all fun and games
and extremely thrilling until you sit down to track your ROI.
Calculating your ROI for content marketing seems like more daunting a
task than the entire process itself.
The
trouble is that most people only associate content marketing with vague
metrics that cannot be quantified. Whereas it is totally agreeable that
Content Marketing does have a lot of unquantifiable impact on your
business, still, there must be a way to calculate your ROI because after
all, business is a number game.
Before we go ahead and tell you how to calculate content marketing ROI within an Hour, let us first talk about your objectives.
Define Your Content Marketing Objectives
Before
launching your Content marketing campaign, you must have defined your
objectives- what is it that you wish to achieve through content
marketing. The objectives differ from business to business and marketer
to marketer.
You might be doing
content marketing to establish thought leadership and branding. You
might as well have a lead generation strategy aligned with your content
marketing plan. Or else, you might also be looking for an enhanced
search engine presence.
Calculating
direct ROI in all these cases is not feasible. When you are not looking
for revenue increase through Content Marketing, you measure performance
instead of monetary ROI.
Difference Between Performance Analysis and ROI Calculation
These two are often mistaken and used synonymously. However, the difference is huge.
Consider this scenario:
Scenario 1:
You
have started your blog section and the goal of your blog section is to
educate your audience in order to establish yourself as a trustworthy
source of information and generate brand recall.
Analysis 1:
In
this case, you are not generating content to get leads and you are not
even trying to do that. When your goal is not leads or revenue, what do
you track? You track whatever is your objective at the first place.
Branding being your primary goal, you do a performance analysis on how
has your branding improved through content marketing. There are various ways of tracking brand awareness such as tracking your direct traffic on Google Analytics.
Now, consider another scenario.
Scenario 2:
You published an eBook and promoted it in order to generate leads for your new service launch.
Analysis 2:
Lead
generation being your primary goal, you can quantify the number of
leads generated and number of leads converted thereby calculating your
monetary ROI.
Now that you understand
the difference between calculating ROI and performance analysis, let’s
understand how to calculate ROI within an hour. Yes, it’s that simple.
Step 1: Calculate Investment of Time
This
has to be extremely accurate. You can even use chrome extensions like
Toggl to keep a track of time you invest in the process of content
creation and distribution. If you have an individual specifically
assigned with this job, it gets even easier for you to track because in
that case, all you have to do is to consider the salary you pay to your
resource.
Considering you have spent
10 hours creating and distributing content, you translate it to the
compensation of those hours. If it is $5 per hour, you end up investing
$50. Like I said, if you have an individual doing it full-time, it’s
easier for you to calculate.
Let’s suppose it took $50 of man hours to create and publish a piece of content. We will use this as a standard in our examples.
Step 2: Outline Your Metric
If
you are doing Content marketing for revenue generation, you could
possibly be doing it in one or the other of two ways possible.
You
are either targeting direct online sales through your content- like in
the case of an e-commerce website, or you are looking to generate leads
that then convert into your offline customers- like in the case of a
home cleaning service provider.
Step 3: Calculate Gross Returns
Putting
a utm-sourced call-to-action to your website, you can track the number
of clicks that land on your sales page from your content page. Further,
you can also track how many people of those who clicked have finally
made a purchase. It allows you to track the amount of purchase made on
your targeted page because of your content. Though the calculations can
be complex depending on your entire model, figuring out total amount of
purchase is totally possible.
Suppose
20 people from your content page land on your sales page where you are
selling handbags. Out of these 20, 10 have made a purchase of $20 each
leading to $200 sales. Your gross return is $200.
In
case of lead generation, you can track how many leads could you end up
with and how many of them transformed into a customer. Suppose 1 out of
20 leads converted leading to a sale of $400 for your home cleaning
service business. This is your gross return.
The calculations here are rather straightforward, but in your case, it will depend on various other nuances of your pricing.
Step 4: Choose an attribution model
This
is the most critical part of your ROI calculation. You need to do it
smartly so that you don’t end up wasting more time calculating the ROI
than doing the actual work. It’s a one-time activity so you will not
have to do it every time you are calculating your content marketing ROI.
Attribution
model is how you attribute your revenue to various steps in the funnel.
It depends on how many phases do you have in a funnel. If you get 15
leads and there’s a sales guy who pitches the service to these 15
people, this guy needs to be attributed too. The larger the funnel, the
complex is the calculation.
There are two types of attribution models you can choose from- multi-touch attribution and last touch attribution.
In
last touch attribution, you assume that the last step taken by the
customer before purchasing receives full attribution. So if the last
step before purchase was reading your content, the content gets the full
credit.
In multi-touch attribution,
you give credit to each phase in the funnel. Since it is almost
impossible to attribute a fixed percentage to each phase, you can give
equal credit to each phase, which is again unrealistic, but still more
accurate than last touch attribution.
Now suppose there are three phases in your funnel. You divide the total revenue by three and attribute it to your content.
In our examples, let’s suppose both the businesses have three funnels.
So,
$66.6 can be attributed to content in the case of online handbag store
and $133.3 in the case of home cleaning service provider.
Step 5: Calculate ROI
Time to calculate your final ROI! You are now only left with simple straightforward calculations.
With
$50 of man hours spent on creating and publishing the content in
question and $66.6 of gross returns in the case of online handbag store,
our calculation says $16.6 of returns and i.e. 24% ROI.
Following the same equation for home cleaning services leads to $83.3 of returns and i.e. 62.4% ROI.
Hurray!
Just
a little bit of ground work and you have your Content Marketing ROI in
less than an hour. The entire calculation does not take much of your
time and with that knowledge, you can calculate the ROI of every single
piece of content. Now imagine the power it gives you. By calculating ROI
of every content marketing effort, you have a lot of data to back your
future decisions and strategy. Data driven marketing fuels your digital campaigns and brings precision in every effort that you put forward.
Calculating
ROI gives you insights into what works and what does not thereby
facilitating better results. If you have yet not measured your content
marketing ROI, you should start doing it right now to use the power of
data to its full potential.
This post was originally published on YourStory
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