When marketing a business, it’s important to understand how your advertising budget impacts your company’s success. No matter what type of business you run or how you advertise it, you need know your marketing’s ROI — return on investment.
For businesses that reach their customers online, calculating the content marketing ROI is especially important. The following is an easy guide to figuring out your content marketing ROI, along with a few tips on how to maximize it.
Knowing your content marketing ROI lets you evaluate content marketing campaigns
It’s impossible to evaluate any marketing campaign effectiveness without knowing its ROI. Content marketing campaigns, along with any other form of advertising you use, should be evaluated using this metric, becauset’s the ROI that lets you objectively assess the effectiveness of a campaign.
Basically, calculating ROI requires two raw data points to calculate a campaign’s efficiency: the cost of the campaign and the value of the leads generated.
Content marketing ROI puts these two main data points in perspective, so you can evaluate, monitor and adjust campaigns to maximize your business’ advertising resources. It helps you identify how well a campaign is working and, if tracked over time, you can understand the adjustments of the content marketing campaign’s effectiveness.
Producing more content doesn’t automatically generate more sales
Like all forms of advertising, the content doesn’t automatically generate sales. If your content is effective, then increasing your production will likely lead to more sales. If your content isn’t effective, or if you have a breakdown in your sales process, however, then producing more content will simply eat up your company’s marketing budget without growing its sales.
Blindly upping your content production won’t necessarily provide the boost in sales that you’re looking for. You need to know your content marketing ROI if you’re going to increase sales. More important, you must ensure your content do rank in Search Engine result page.
The simple theory for calculating your content marketing ROI
As mentioned above, you need two data points to calculate each content marketing ROI. Here we show you how to calculate your content marketing costs and the generated leads’ value.
Figuring out how much your content marketing costs is easy. Simply add up how much you have spent on generating content over the past month, keeping in mind that content marketing involves much more than just creating and posting content.
You need to calculate each content performance and amend it accordingly because by doing so, you can improve each content search ranking in Google to gain search traffic from Google.
The individual content performance is the critical factor for improving your content marketing ROI. You need to go over the small details, such as grammar, structure and content integrity. It is not a good idea to publish your content prematurely without going over it thoroughly first.
Now, you need to calculate the value of a lead based on your monthly sales history because we are using Google Analytic to calculate leads value per content. In formula form, this process looks like:
(Total number of leads in a month) x (Average lead conversion rate) x (Average price of your product) = (Per lead value)
With your cost of content creation (CCC) and Per lead value (PLV), you can figure out your content marketing ROI with a simple formula:
[(Total PLV of a content) – (CCC)] / (CCC) = ROI of a content
The first step, [(Total PLV of a content) – (CCC)], gives you the profit you earned through content marketing in a month. The second calculation, dividing that figure by CCC, puts it in a ratio to give your content marketing ROI. This final figure is best expressed as a percentage.
Looking at an example
For a simplified example, assume your company spends $100 on each content marketing. From this $100, you generate $400 Per lead value.
The cost of the content (CCC) is: $100.
The ROI of content marketing is:
[($400 Total PLV of a content) – ($100 CCW)] / ($100 CCW) = 3% ROI
How to use Google Analytic to track ROI
Personally, I prefer to use Google Analytic because it is free and enables me track all of my content campaigns in one place. With Google Analytic, you are able to drill down traffic sources. More importantly, Google Analytic helps you track leads from each content and improve it.
Ok, let’s start talking about how to set up a goal in Google Analytic
Sign Up To Google Analytics
Copy the Tracking Code to your website header. If you are using WordPress, it is great to use this light plugin to help you insert the tracking code easily on “plugin setting page”
Set Up Goal for Your Content Marketing
To create a goal for Leads:
1) Click On “Admin” Button in the top
2) Click On “Goal”
3) Click on “+New Goal”
4) Click on “Custom” template and then click “Next Step”
5) Name Your Goal, select “Destination” and then click “Next Step”
6) Enter your Leads Thank You Page into Destination. Turn “Value” on and assign Your “per lead value” to it. Lastly, Click on “Create Goal.”
7) Track your content performance in Reporting > Behavior > Site Content > All Pages > Page Value
Record your performance in a spreadsheet. I will be using Google Sheets as an example to record down the performance. Click on the following link to access the template
Also, be sure to check out more advanced Tracking hacks from Navneet Kaushal for SEO purposes. He has some awesome tactics to help you identify the strong points and weak points of your SEO content marketing strategy.
Additional Google Analytics metrics for you to become a better content marketer
These are the additional metrics you must track in order to increase the quality of your content.
Traffics Source/medium: When using Google Analytic, you need to know where the traffic comes from. You can accomplish this by selecting “Secondary Dimension” and ” Source/Medium” in Behavior > site content > All page. Identifying sources of traffic is crucial in Content Marketing. From the SEO perspective, it is important to measure “Organic Traffic” because any changes should be investigated as they could mean a change in Google Search Rankings. It might also indicate that your competitors are trying to outrank you.
Time On Page AKA Dwell Time: This is a metric for measuring a user’s time on a page. Thus, it is a great indication of your content quality. This is also an important signal for Google to sense your content quality. If your content quality is bad, the user will not spend any or much time on your content, it’s as simple as that. Therefore we need to improve the dwell time. Improving dwell time will lead to excellent rankings in Google.
Entrances and Unique Pageviews: These two metrics often confuse a lot of marketers. I personally think measuring entrances is a more reliable metric because, for example, when visitor Z from Google lands on page A, it will count as 1 Entrance and 1 unique Pageview for page A. However, if visitor Z then goes on to page B, then page B will show 1 unique pageview but 0 entrance value. Measuring entrances metric will help you understand how effective your content is in attracting visitors from SERPs.
Keywords CTR: Moz Dr. Peter J Meyers mentioned about this in his article back in 2012. The metric is located at Acquisition > Search Engine Optimization > Queries. It looks something like this:
It helps you know what keywords your website is ranking. Furthermore, it helps you to optimize SERP CTR to increase more traffic. We know Google takes into consideration CTR and great CTR leads to high rankings. CTR is an important factor for improving search ranking.
Moz Rand Fishkin also said so.
— Rand Fishkin (@randfish) October 1, 2014
The true story of content marketing challenges
These calculations will give you a snapshot of your content marketing ROI Remember, content marketing isn’t a one-month effort. Successful marketing campaigns take months, even years, to develop and grow. It’s not uncommon for the first month’s budget to exceed the value of your leads, generating a one-month negative ROI.
As you continue to invest in content marketing, though, each month builds upon the previous ones. The second month will be more effective than the first, and the third more than the second, and so on. By the time you’re six months in, you should see positive results.
For this reason, content marketing campaigns should be evaluated on a six-month basis, at least. After six months, you will have an accurate idea of how a campaign’s performing. Before this time, however, it’s impossible to gauge a campaign’s effect on prospective customers and long-term search engine rankings.
To ensure that your campaigns have sufficient time to produce a positive return on your investment, budget for at least six months of content marketing and ranking in Google for the long term. Don’t throw a bunch of money at your online marketing in one month and then stop those efforts the next when they don’t produce the ROI you’re looking for, and be sure to make adjustments to your content when needed to improve search ranking.
In short, make a plan for six months and run a sustained content marketing campaign. Your business will benefit from it, and you’ll be able to gauge your content marketing’s ROI accurately.