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 in 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 the 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 the 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.
An 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 was taken by the customer before purchasing receives full attribution. So if the last step before the 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 a 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 are 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.
Just a little bit of groundwork 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 to 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 force of data to its full potential.