This is a guest post from Meegan Rucker, Digital Marketing Manager at Full Circle.
Great marketing proves its own value. However, when it comes to content marketing, the ROI can seem elusive and undefined. Most blog posts and articles only drive a few direct conversions, if any, yet all marketers know the importance of a robust content strategy to drive awareness, thought leadership, SEO, and lead nurturing. Some content goes stale after a week, while other rich pieces are relevant for years. Quantifying all this unknown into a dollar figure can seem downright crazy.
In this infographic from Socedo, we’ve created a simple and effective attribution model that can help you discover just what your content is worth. Knowing the financial worth of your content provides you the motivation to continue to create new, informative pieces. All it takes is a little time and effort to brew just the right equation to get there.
This road we’re about to go down is chock full of math, but it’s all math you need to do in order to judge the effectiveness of your marketing efforts. After all, you have to understand your content funnel before you measure its success.
Sit back, take a sip of your favorite caffeinated beverage, and let the ROI calculation begin!
Here are some things you’ll need:
– Access to Google Analytics or other web analytics tools
– Determine the average lifetime value of a customer. For help with this, take a look at this infographic from Kissmetrics.
– Determine the average conversion rate. This can be done per landing page for best results, but if you must use an overall average based your website, so be it. It’s very easy to figure out: how many people visit your site (or each landing page) per month? Out of those, how many sign up for a product trial or request a demo? How many of those trial or demo requests become paying customers?
– Defined attribution point. If only there was one standard attribution model in marketing! For the sake of this ROI model, we’ll follow a fractional attribution model, which acknowledges that people’s decision to buy a product has been influenced by a variety of factors, not just the last ad or content they viewed before making the purchase. This model includes:
Direct attributed conversions captured via the sign-up form associated with a piece of content, trial sign-up or URL tracking. For example, if someone visited a blog post and then signed up for a free trial, or requested more information on your pricing in the same session, you can attribute those conversions directly to that blog post.
Indirect conversions as a percentage of the increase in leads determined by historical content attribution. All the effort you put into promoting your content (i.e. ads, organic social media posts) as well as the effort done by third parties (i.e. say if you syndicated your content on a third party site) are driving views to your content. While people may not visit your website via a link in your article right away, they may return to your site via search at a few days later to continue their research. The thought leadership articles or guest blog posts are indirectly driving leads by increasing search traffic (or word of mouth) traffic to your site.
When you publish a new article on an external site, take a look at traffic numbers and conversion rates from your site. If you see an increase in your conversion rate along with an increase in site traffic shortly after publishing your article (say 72 hours), you should give some credit to this article. For example, looking at your historical data, you might assume a 10 percentage increase in leads through search or word of mouth within a 48 hours of publishing your content.
–Estimate value for various types of content. Once you have all this data, you’ll be able to assess the overall value of various types of content releases. A feature release may get a higher percentage of attribution than a blog post on a more top-of-the funnel topic. A byline placed in a popular publication that your target audience respects should be weighted more heavily than an article on a less known site. Of course, this percentage will change with time as you optimize content and change your focus to the channels that work best for you.
Do the Math
So now you have the lifetime value of a customer, your conversion rate, and the percentage of attribution for each type of content. The last thing you need to get started is the cost of a piece of content, which is (cost per hour) x (number of hours). Here’s how you determine the ROI of each piece of content:
- Calculate the total number of attributed signups from the content. Add together the direct attributed conversions that you capture with the sign up form, the estimated conversions of the landing page from the total traffic generated from the content piece (Google Analytics!), and the indirect signups as a percentage of the net increase in new signups after the piece is published.
- Multiply your total attributed signups by the Total Lifetime Value in dollars of a customer. Odds are, your CRM or marketing automation system already has this value.
- Now subtract out the cost of creating the content. This is the total number of hours to create and distribute the content multiplied by the hourly rate of the person creating the content. Any other costs (software used, paid promotions) can also be included. This will get you the total return from this piece of content.
- Finally, divide the total return by the content cost to determine the incremental ROI. You can expect this much return for every dollar you spend on creating this type of content.
For an easier understanding, here’s how to make coffee with Socedo to help explain our ROI of content algorithm:
See? Easier than pie. Whether you had an epiphany reading this post or if it’s clear as mud, I hope that the one thing you learned when reading this post is that the more you track in your marketing efforts, the better off you’ll be. Even if you only realize half these data points, you can still gain insight into what’s working, what’s not, and what your users are interacting with. Use this information to create a better online experience, and everyone wins.
Meegan Rucker is a digital marketer passionate about building effective customer experiences. You can connect with Meegan on Twitter and LinkedIn. She developed the ROI of Content Algorithm at Socedo, a social data platform for discovering and nurturing leads. The infographic was created by Teena Thach, Marketing Specialist at Socedo.