Content Marketing


A Guide to Understanding and Measuring Content Marketing ROI

A Guide to Understanding and Measuring Content Marketing ROI

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How to link your content marketing efforts to your business’s bottom line.

Today, over 73% of major organizations hire an expert to manage their content marketing.

Content marketing has become an integral part of marketing strategies around the world for both B2C and B2B businesses.

Experienced marketers know exactly what content to produce for a brand and where to promote it, but knowing how to link that content to a company’s bottom line is where the challenge comes in.  

A study by MarketingProfs states that 56% of marketers doubt whether content marketing has any real impact, and a mere 26% actually know how to track their efforts and show a return.

We have long since moved away from using vanity metrics such as page views and impressions to prove the effectiveness of blog posts or landing pages. Engagement metrics do still play an important role but because marketers really need to start proving that their efforts are making a financial difference to the organizations they work for, they need to start linking content performance to actual business goals too.

Did You Know: 70% of B2B marketers are planning to create more content in 2017 than they did in 2016. – Content Marketing Institute

Setting your content marketing objectives

Content marketing is a long-term commitment so when you’re setting your objectives, it’s important to do some forward thinking and set your objectives accordingly.

It’s important to note that your objectives don’t necessarily need to be linked to a monetary outcome. They should be based on what’s important to your business. Some examples of common content marketing objectives include:

  • Increased brand awareness and engagement
  • Customer loyalty
  • Increased sales
  • Lead generation and nurturing opportunities
  • Customer education
  • Increased website traffic

Did You Know: The top 3 content marketing goals for businesses are: Lead Generation (85%); Sales (84%); Lead Nurturing (78%). – Content Marketing Institute  

While your objectives give you something to work towards as a content marketing expert, your efforts also need to make sense financially in order for your company to experience continued growth. This is where customer acquisition costs and ROI measurements come in.

Calculating customer acquisition costs to measure content ROI

Customer acquisition costs (CAC) are how you’re going to showcase the usefulness of your content marketing efforts. CAC looks at what was spent in order to acquire your customers.

In order to measure your content’s ROI, you’ll need to look at the cost of developing content versus the number of new customers that were acquired to know what your CAC is.  

Step 1: Calculate total content marketing costs

Add up all of the expenses involved with producing your content. This could include anything from software, technology, and distribution to writers, designers, and developers.

Step 2: Calculate CAC

Take your total content marketing costs and divide it by the total number of customers that were acquired during that period in order to calculate your CAC.

Next you want to take the total revenue generated during the same period and divide that by the total number of customers acquired in order to establish what the average customer spent with the business.

Now, compare your CAC to the average revenue per customer to calculate your profit and your content’s ROI.

From there you can decide whether your content marketing strategy needs to be revised.

Additional methods for calculating content ROI

  • Brand awareness and engagement

We all know that in order for your content to produce the desired results you need to know who your target audience is.

Knowing how they spend their time online is also important as it gives you a better idea of how and where you can reach them.

Brand awareness and engagement stats are one way to show content ROI. Start by creating a comprehensive list of all the channels and platforms where your brand is present.

Make a note of your current number of subscribers, fans, and followers on each platform and start tracking your growth.

Tracking your growth across these different platforms will give you a better idea of where you’re getting the best ROI.  

Next look at your engagement rates to gauge how successful your content is on each channel or platform so that you can refine your content strategy in order to see better results.

Did You Know: Leaders in content marketing experience 7.8 times more website traffic than non-leaders. – Content Marketing Institute

  • Lead acquisition and nurturing

Google Analytics is a fantastic tool to use to measure the ROI of your content. The acquisitions and behavior tabs are the most useful.

Google’s acquisitions tab will tell you where the majority of your leads are coming from. It covers traffic channels (organic, referral, direct and search), AdWords, social media platforms, and online campaigns. Once you know where your leads and customers are finding your brand online and which content they’re reacting to, you’ll know where to focus your attention going forward.

If you’re looking to track specific campaigns, you can add UTM codes to your campaign URLs. UTM codes will help you identify individual campaigns within Google Analytics so that you have a more in-depth view of the performance of your brand and content marketing efforts. You could even go as far as tracking how many leads were collected from a specific campaign and how many of those leads were converted into customers. A landing page with a lead capture form would be a good example of this type of campaign.

The behavior tab will give you an overview of how website visitors are navigating your site and where they’re spending most of their time. By analyzing the pages with the most traffic you can find out what content is drawing the most interest and leading to the most conversions so that you can implement more of the same tactics.

Did You Know: The cost of content marketing is 62% less than traditional marketing and it generates up to 3 times more leads. – Demand Metric

  • Sales

Sales data really comes in handy when it comes to measuring content ROI. This is another area where your customer acquisition costs will play a role.

Each of your customers has a lifetime value (LTV), a metric that will tell you how much revenue your business could expect to earn from the average client. Before you can measure ROI using your sales data, you’ll need to calculate your customers’ average LTV.

In order to establish what a new customer is worth, you’ll need to use the following calculation:

Step 1: Calculate your margin

(Eg: My production costs are $200 and I spend $50 on marketing and business development to attain a new client)

Step 2: Calculate your customer retention rate

(Eg: In January, I have 100 clients. In February, I only have 70 clients as 30 of them have canceled their subscriptions. 70 / 100 = 70%)

Step 3: Determine client discount rate

(Eg: Did you offer your customers a discount? What was the percentage? In this example, we didn’t offer a customer discount)

Step 4: Calculate your customer lifetime value (CLV) using the following calculation:

Margin x (Retention Rate %) / ([1 + Discount Rate %] – Retention Rate %)

$50 x (70% / ((1 + 0 – 70%))) = $35

To understand the ROI of your content marketing efforts, look at the CAC of an individual customer and compare it to your average LTV to decide whether you’re spending too much on content marketing and if your strategy can be refined in order to reduce your CAC.

Did You Know: 51% of B2B buyers are more reliant on content to research and make B2B purchasing decisions than they were a year ago. – Demand Gen

Before you calculate CAC and ROI

Return on investment and your customer acquisition costs are measurements that should be discussed and worked on with your CFO and management team. Your costs will be unique to your specific business and sector so it’s difficult to know what you should be working towards and achieving without involving your CFO and department manager.

There is more than one way to calculate content ROI so it helps to look at it from all angles and not just from a monetary standpoint if you want to continue improving your content marketing strategy in the future.

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About the author

Laetitia is Content Marketing Strategist. After several years managing marketing projects in London, she joined Upfluence in 2016. She loves a good storytelling and can't wait to hear your brand's story. Connect with her on Twitter at @LaetitiaCatta.

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