Measuring the ROI of content marketing
Despite a huge surge in adoption of content marketing, measuring the business impact or calculating the ROI of content marketing is complicated.
“How do I calculate content marketing ROI” is one of the questions I get the most from people wanting to start with content marketing. Often, when it comes to content marketing, marketers are struggling to build their own business case internally.
With this post I want to demystify the field of content marketing ROI, and provide some practical help on how marketers can measure things that have a quantifiable impact on the results of the brand.
In this post I cover the following subjects:
- what is important to measure?
- how do I select the right metrics and KPI’s?
- how can I setup a dashboard? how do you calculate ROI?
Are you ready? Here we go !
What’s your content marketing objective?
Before you do anything, you need to clearly define the goals of your content initiatives.
Depending on the size of your company, your content marketing initiative, the structure of your company, etc. you will most probably have multiple objectives.
I have found that the best way to structure your objectives is to split your content marketing initiatives into what I call content programs. Usually the business objectives for these programs boil down to any of these objectives:
- brand awareness,
- lead generation,
- customer acquisition
- thought leadership,
- customer retention / loyalty,
- website traffic
- lead management or lead nurturing
What is important to measure?
Once you’ve decided your business goals, the next question is how you’ll measure success.
Where metrics go wrong
Measuring marketing success can be difficult because marketers have literally hundreds of marketing metrics to choose from, and almost of them measure something of value. The problem is that most of them relate very little to the metrics that concern a CFO, CEO or business manager:
- Certain success metrics look great on paper, but still offer little added value in making decisions. These metrics are sometimes called “Vanity Metrics” (link to blog post in Dutch on Vanity Metrics). Vanity metrics give marketers or entrepreneurs a false feel of success. Or to put it the words of Eric Ries “Vanity Metrics are dangerous.”
- Another thing often found when marketers report results is, they are reporting on quantity and not quality. A typical example is that the number of leads are reported, but we have no clue on wether these leads are any good.
- One of the worst metrics you can report on is cost metrics, because they frame marketing as a cost center. You might be able to reduce marketing cost, but that doesn’t mean anything to leadership.
- And a last pitfall metric is where marketers report on activity, and not on results. Marketing departments are always extremely busy, and it feels good to report about 20 emails that have been sent, and 5 new marketing collateral materials that have been created. But when only reporting on activity, business sees marketing as a cost center rather than a profit center.
What is important to measure?
If activity, cost, and quantity aren’t the right metrics to use, what are? Anything that speaks to the CFO’s areas of primary concern:
- cash flow,
- shareholder value
In other words, your company’s ability to generate more profits and faster growth than your competitors.
In the end CEO’s prefer to see clear results. Hard business results. They want to see the ROI of Content Marketing.
In a previous blog post article I show you those hard business results using 22 examples of companies that used content marketing, and which had clear business results.
What is important to measure in Content Marketing?
To get a better understanding of the ROI of our content marketing programs, we’ll need to surface a number of metrics. Depending on the objectives of your content marketing initiative you will need to use other metrics.
For example, if your content marketing initiative has the objective of driving traffic to your e-commerce website, in that case you must choose the metrics that track down everything that contributes to that goals. If your objective is thought leadership, you will need other metrics. I think you get the idea…
Understand the difference between Performance & Operational metrics
If you want to understand the effect of your actions, you will also need to track how much effort you are putting into it, to reach the result you are seeing. That’s why I often distinguish between performance metrics and operational metrics:
- Performance metrics: metrics on consumption, retention, sharing, engagement, leads or sales.
- Operational metrics: metrics track production (number of assets, velocity, speed of steps in the process), cost & ROI .
Measuring operational performance
For example, in larger operations you want to understand how much time people spend on writing, editing, researching, etc.
By setting an arbitrary cost on the time spent to create each type of content asset, you can get a better understanding of the total efficiency of your production resources. Initially you can simply use a time tracking tool like Harvest or Teamwork.
Alternatively you might want to check out specific content marketing tooling like Kapost, Compendium or Percolate. There are many, many more tools available, so it’s important evaluate these tools in a formal tool selection process.
Measuring per channel
In any content marketing initiative you will use communication channels to distribute and promote your content.
When building your dashboard, you want to use a couple of metrics that directly relate to the performance of your channels.
Usually these metrics are interesting to people dealing with those communication channels, but they are likely less interesting to managers or C-level.
Picking the right KPI’s
Along with metrics that give insight into the performance of your content or communication channels, you want to select a number of KPI’s. By choosing a number of KPI’s you can monitor the performance of your content marketing initiative through time.
When picking KPI’s, here are some tips to take into account:
- Choose no more than five key metrics. It’s hard to put organizational focus on more than that, so choose wisely.
- Measure success versus goals for those metrics for every campaign, every channel, every sales rep/region, every product, etc.
- Show trends for those metrics over time – that way you can immediately see where you are improving and where you are not.
- Put on a dashboard for everyone to see so there is always a succinct view of what marketing is trying to achieve, and where you stand.
- Have employee recognition systems in place. Make sure top contributors get recognition – give them badges they can put on the desks or cube.
- Rinse and repeat. The best performing companies track results weekly, monthly, and quarterly – so they can improve.
Create your content marketing dashboard
Once you have selected all your metrics and KPI’s, the next step is to bring them together into a dashboard. In case you have multiple content marketing programs, the best thing to do is to track them down in separate dashboards. To get an easy overview of everything you are doing, you might want to bring an aggregate of the most important metrics of all these programs togethers in a single view.
For each of these programs you also want to create a governance system that governs the performance of each of these programs.
In case you are unfamiliar with such governance system, let me quickly fill you in: governance is basically reporting, and deciding on your plans, the execution status, and the possible optimizations of your content marketing initiatives. Often, in these governance reports and during the governance meetings you also report on organizational issues, possible solutions, next steps, and report on budget and ROI.
Measuring Content Marketing ROI
Calculating the monetary ROI can be really difficult, especially when you have intangible objectives like thought leadership or brand awareness.
But with all the ideas and insights in this blog post you should be able to select the right metrics and KPI’s that provide insight into the gain and cost of your investment into content marketing.
Calculation the ROI of your content marketing initiative can be as simple or as complex as you want it to be.
But if you are just starting with content marketing, here are some tips that come straight from my personal experience running small to large content marketing operations:
- don’t overcomplicate your dashboard, instead spend most of your time on content quality. You really don’t need that many metrics to know if things get moving or not.
- start with one single program, and resist the urge to launch multiple programs in the beginning.
- wait 6 months to 9 months before you start setting up a formal governance system, but meanwhile track the necessary metrics. Your management might not have the patience to wait until content marketing ROI kicks-in after the usual 6 to 9 months.
- In the beginning focus on communicating internally, about the little successes your are having with your content marketing initiative (ea. first workshop, first 10 pieces of content, first downloads, etc).
That’s it for this one. If you liked this post, why not subscribe to my blog?
Tom De Baere