The return on investment (ROI) is one of the most important metrics to measure the effectiveness of a marketing strategy. It indicates the probability of recovering your initial investment and thereby achieving profitability in the long term.
To calculate the ROI in a content marketing strategy, you must take into account the budget you have designated for it, the investment in the content you make, and the Income that it can generate.
A study published by the MarketingProfs company called “B2B Content Marketing: 2018 Benchmarks, Budgets and Trends” (in English), showed important statistics on content marketing, among which we can highlight:
77% of the companies surveyed in the study stated that they found a positive relationship between the quality of the content and the level of engagement.
In addition, 72% have been able to demonstrate through metrics that it is an ideal strategy for attracting leads.
51% of companies say that the sales level of the organization has increased and they can demonstrate this with metrics.
35% of companies measure the ROI of content marketing and therefore they are aware that they can generate traffic on their websites more economically than using paid advertising.
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Why is measuring the ROI of content marketing important?
While the influence of content marketing on sales is undeniable, it is just as important to be able to demonstrate that it is a profitable strategy for the company. Measuring ROI will allow us to understand which investments are worthwhile and which ones we should modify or remove from our strategy.
Within content marketing, we focus on offering the user valuable content, an excellent user experience that allows the development of a loyalty link with the brand. The metrics related to this strategy will let us know if the content we offer is both good and profitable.
One way to know if the investment of our content is profitable is by evaluating if it is generating positive results beyond the level of sales.
For example, if your blog has increased its visits, if the leads that are generated finally become customers or if the strategy is turning out to be cheaper than other options.
You should know that there is no standard formula for calculating ROI within a content marketing strategy since everything will depend on the objectives you have. Planetary can achieve a certain amount of leads a year, increase the level of engagement or organic traffic, improve your sales, etc.
In any case, to calculate the ROI you will need to assign an economic value to the indicators you use and the objectives you set.
Costs and Income generated by Content Marketing
In order to calculate ROI, it is important that you understand all the costs and returns that such a strategy can have. You need to measure them taking into account a specific period that can be monthly, quarterly, annual, etc. Among the investment metrics we must mention:
The platform on which you create the blog in case it is not free. However, WordPress is always an excellent option.
Cost for each piece of content that is paid to a third party, be it editors, designers, editors, reporters, translators, etc.
By the way, if you are looking for specialized editors to create your content, take a look at the ones we have at Publisuites
Broadcast platforms that you have to pay for such as Facebook Ads, Instagram advertising, Google Ads, etc. Automation tools, monitoring, and analysis of your content.
If you create the content yourself, you will probably invest in quality recording equipment, editing software, accessories, etc. To get high-quality content, you can avail of the best affordable content writing services as well.
The return metrics or the variables that generate Income within content marketing can vary according to the objectives you set. However, among the most important we can highlight:
- Number of views
- Unique visits
- Organic traffic level
The conversion rate of leads, indicating at what level visitors to your web site and register their details become leads.
Number of clients and sales
Customer conversion rate, which reflects the extent to which leads or potential customers end up acquiring your product or service. Income that each of these variables reports to your company.
How to calculate ROI?
After having all the data very clear, we can use the formula to calculate the ROI, made up of the following structure:
ROI = [(Income generated for a certain time – Investment in Content Marketing during the same period) / Investment in Content Marketing during the same period] * 100
In this image you may see it clearer:
The result must be multiplied by 100 to have a percentage figure. The closer to 100%, the more profitable our strategy will be.
Let’s look at an example with numbers to make it clearer. “Company X” has invested $ 2,000 per month in its content marketing campaign and has earned $ 6,000 per month. What is the Return on Investment of “Company X”?
So, we have:
Investment: € 2,000 per month
Income: € 6,000 per month
ROI = [(6,000 – 2,000) / 2,000] * 100 = 200%
With this simple formula, we see that the ROI of “Company X” is 200%. This calculation has really been very basic, so other expenses that the company mentioned above must also be taken into account.
Tips to increase the ROI of your marketing strategy
Below we will share a series of tips that will allow you to improve the ROI of your content marketing strategy. This way you can better visualize the panorama of your entire strategy:
1. Set your KPIs
The KPI are indicators that measure the performance of any process. Each company can have its own KPIs depending on the strategy it wants to evaluate. Tools like Google Analytics allow you to assign an economic value to each KPI.
The main contribution of good content within marketing is the capture of potential customers who could become loyal customers and ambassadors of your brand. In this type of strategy, it is very important that you take into account a series of metrics such as:
- Web traffic
- Conversion rate
It is also important that you control the metrics that evaluate the quality and effectiveness of your content, regularly monitoring the number of downloads, likes, organic comments, subscriptions, visits, or the number of times they share your content on social networks.
A CRM manages the relationships with your clients and is super useful when analyzing some of these KPIs. It enables sales, marketing, and customer service teams to access customer reports, data, and analysis in real-time. With mobile CRM, your team can do these tasks from anywhere through mobile devices or smartphones.
2. Identify and optimize your content investment
You must establish a defined budget for content marketing and also identify how much each movement costs you. It is important to determine the unit cost of each article or piece of content for each platform, be it social media, blog, website, or newsletter.
An excellent way to optimize these costs is through EverGreen content. It is a timeless content, which does not “expire” and that its interest endures over time.
For example, imagine you pay for an item titled “Discover the best Android smartphones on the market.”
This part will likely become obsolete in a year, as the company will have released 5 new devices, and readers will be interested in learning about the latest models. This implies that from time to time you will have to pay to update said content.
However, timeless content could be: What aspects should you take into account when buying an Android smartphone? For a long time, thousands of people will be interested in knowing this information. It is a more versatile content since it can be applied not only to the latest mobiles on the market but to anyone using that operating system.
3. Take advantage of automated marketing
Content programming and customization tools will allow you to offer a better user experience. In addition, you can increase the reach of your content and establish a more effective communication channel with your customers.
You can make the most of this for email marketing campaigns. Automated tools will let you know if your emails are being opened, ignored, or sent to the Spam folder. The key is to send offers, promotions and content according to the interests of each client, which you can find out through surveys, their shopping cart or their journey on your website.
4. Diversify your content sources
Although the blog is considered the pillar of a content strategy, do not invest all your resources only in it. Video content is increasingly popular and also gives your company a face, allows you to get to know your brand beyond texts and images. So don’t hesitate to implement talks, webinars, question-and-answer sessions, or explanatory videos within your strategy.
5. Your audience is your source of inspiration
Keep in mind that the information you share through your blog, or on social networks is an excellent way to build trust in your brand since your users will recognize that you know the field where your product or services operate.
However, this information is unidirectional and is aimed at your entire market segment. If you keep on creating content, you are simply sending information, not dialogue with your audience.
What matters much more when generating leads is that the brand speaks directly to the customer, but also that they listen to it. As we mentioned in the previous point, personalized content is the key.
We invite you to open communication channels with your clients so that your brand can receive suggestions, proposals, and resolve incidents in a timely manner. They are ways to improve your service, analyzing what worked, and at what stages you could improve it.
Improving the ROI of your Content Marketing strategy is only possible if you measure it and break it down into metrics that allow you to work better. In this way, it is much easier to analyze and play with the different variables to measure results.
Also, remember that content can be very valuable and useful, but it will not help your business grow if it is not profitable. In this way, it is just as important to measure the quality of your message and the way in which you share it with your users to identify possible failures and improve results.