How to figure out the ROI of a content marketing strategy

Content marketing sounds like an exciting endeavor to add up to your digital marketing mix. But as it requires a steady flow of content creation, marketers and salespeople may often ask if it's really worth the money.

You may have heard about the wonders of content marketing, an approach that centers on creating and distributing valuable, relevant and consistent content to attract a very clearly defined audience. Ultimately, that leads to driving profitable customer action, according to the Content Marketing Institute.

Rather than pushing for the products and services, your marketing campaign provides orientation, education, and help, to address the pain points and concerns of your customers.

Up to that point, heads of marketing and sales get it. It is an interesting approach to reach out for potential leads by providing them content that nurtures them.

• If you’re selling an enterprise management software, you’d better advise your customers about the importance of teamwork.
• If you’re head of admissions of a university, it might be good to explain and give guidance to potential students about the ideal college major for their needs, interests, and capacities.

And then it comes.... the time-consuming question. Why would I have my people writing articles instead of selling, and writing blogs instead of pitching?

Because it is worth it.

When you’re running a content marketing operation, you’re adding up to your brand, providing consistency in its message.

"We’re a clinic, and we’re worried about your health".

Well, prove it.

Give your potential patients advice about preventing heart disease and running a healthy diet. You’re strengthening your brand and adding up to your reputation.

What's in it for my bottom line?

When content marketing is pitched to a CFO, the inevitable question arises...

"What’s in it for the company? What’s its Return on Investment?"

The ROI. Three of the most threatening letters for a marketer….

Let me rephrase. Three of the most threatening letters for a legacy marketer. The type that said, “I’m wasting half of my marketing budget, but I don’t know which half.”

The Content Marketing Institute gives three benefits for companies who use content marketing:

• Increased sales.
• Cost savings.
• Better customers who have more loyalty.

But is it cost effective?

If you want to know that, you’d better run your own calculations. But we can give you some guidance.

Imagine you’re a B2B software company trying to build a hype of your new suite. Your marketing team realizes that as your customers run a considered buying process -that is, they run quotations and online searches for the best options available in the market- you need to build a presence on the web and social media.

• First, to establish a presence and become a brand that is on the top of their minds.
• Second, because you want to place yourself as a potential solution to a problem they didn’t even realize they could solve.

You’ve calculated your numbers:

• Your website receives 2,000 visitors a month.
• Out of those visitors, you receive 100 potential leads for marketing and sales.
• You turn an average of 10 of those leads into customers, for a US$1,000 subscription software.

Your CFO realizes the numbers don’t add up, and you need to run preemptive measures quickly.

The quickest way is to invest on the web:  buy Ads on Google, Facebook, LinkedIn, and Twitter and create a campaign focused on your product suite.

You bid US$5,000 with some specific keywords and a very well-defined demographics, and your numbers skyrocket:

• You get 20,000 visitors a month.
• Your lead conversion rises to 250 people.
• You convert 20 customers.

Was that worth it?

• You increased 10x times your number of visitors.
• Increased 2.5X times your lead generation.
• Closed 2x times more customers.

You’re still wasting a chunk of your marketing budget.

You ask sales "why was there such a low closing rate?"

Most of the 250 people were looking for a B2C software solution.

Your company was clear about whom you wanted to target. Was your potential customer clear about that as well?

You pitched a product online, instead of providing information about it. 

After you finish your one month trial of Google Adwords, your numbers plummet, and your return to your usual, customary 2,000 visitors a month. It was an illusion.

The cost-effectiveness of Content Marketing

Imagine you invest in building a content marketing team in-house or at an agency, and you spend the same US$5,000. They run an Inbound Marketing strategy that includes a robust set of content marketing practices:

• A clearly defined content strategy with blogs, guidelines, and content offers focused on your buyer persona’s interests and consideration process
• Well defined keywords for a search engine optimization (SEO) strategy.
• Distribution through a variety of in-house and third party social media channels, that your buyer persona follows on a day-to-day basis.
• Subsequently, after absorbing a qualified lead database, developing a personalized, segmented email marketing strategy.

We run those numbers on an ROI calculator, based on estimations of HubSpot’s 2015 ROI report.

What do we get?

• 7,400 estimated visits a month, received via organic searches.
• 270 leads.

What is then umber of customers? We'll leave it as an open-ended question.

However, if you have 270 leads for 7,400 visitors, that’s a much larger conversion rate! That may mean a series of things:

• The content you’re providing on your website and via social media is more appealing.
• The leads you’ve generated are more qualified. Why? Because they chose to check you out and get more information after getting more in-depth information from you.

The chances of converting those leads into customers are higher. You're nurturing them in their buying process. They’re becoming aware of your solutions without receiving a single call of a sales rep (yet), simply because they’re educating themselves through you.

If you keep feeding this content machine through time, your numbers will rise, as your SEO positioning will increase and your social media presence as an industry authority will get rapport.

It is a steady, more sustainable way to building a name in digital marketing. What you need, though, is patience and perseverance. Because building this presence requires time. But trust me, it is totally worth it. 

Struggling to calculate the ROI of content? Send us your comments.