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December 12, 2014Content Marketing: How to Measure Objective Results from a Subjective Marketing Medium
Content marketing rose quickly in popularity once it became a buzzword, but it also earned a negative reputation because of its assumed inability to be effectively measured. It is true that there are limitations that prevent your content marketing campaign from being a simply measured, one-to-one system. However, if you track and analyze the proper metrics and accurately estimate your total costs, you can identify exactly how much money your content marketing program is earning you.
In this guide, I’ll walk you through the steps necessary to create an equation that will accurately estimate the cost to value ratio of your campaign.
Why Content Is Difficult to Measure
Content marketing has a number of limitations because it is more of a qualitative strategy than a quantitative one. Some of these limitations include:
- Online content posts are permanent, and therefore have a theoretically unlimited value.
- The effects of content posts are cumulative, meaning the value of older posts increases slightly with every new post, making it difficult to accurately predict the value of any individual post. A campaign with a low ROI in the first few months of execution may turn into a campaign with a high ROI after a year or more.
- While some posts may immediately generate conversions, content marketing has more impact in building a reputation over time. Since brand reputation is a difficult value to quantitatively measure, it’s hard to use as part of your calculations.
- Content marketing has an indirect but strong effect on your search engine rankings, therefore making it responsible for bringing new traffic to your site even if those users are unfamiliar with your content strategy.
Nevertheless, it’s possible to estimate your content marketing strategy’s short-term and long-term effectiveness by calculating your current ROI.
Identify Your Sources and Your Goals
Identifying the factors that will enter your equation is the first step of the process. Before you can measure the success of your campaign, you have to know your definition of success. What defines success to an e-commerce platform isn’t necessarily the same as what defines success to a B2B service company.
Ask yourself the following question: what defines a successful visit to your website? For many companies, this will be a conversion. Conversions can be a user filling out an information form to be contacted later, or a user making a purchase on your storefront. It is a user action that either completes a sale or completes the online portion of the sales funnel. You may define success differently, such as achieving a social share from a visitor or inspiring the click of an affiliate link, but those can be qualified as “conversions” as well. We will consider a “conversion” to be a user completing any desired action on your site.
Creating Your ROI Equation
If you’re going to objectively calculate the value of your campaign, you need to start with a reliable formula or equation.
There will be two sides to our equation. The left side will represent the total cost of your campaign. The right side will represent the total value. For our purposes, we’ll look at this within the parameters of one month, but the equation can be applied at any level—weekly, yearly, etc.
If the left side is greater than the right side, your campaign is currently losing money. If your campaign has just started, this is normal; it usually takes several months to a year or more before the effects of your efforts start accumulating into measurable growth. If your campaign has been running for some time, you may want to audit your current strategy to pinpoint a disconnection or major flaw.
If the right side is greater than the left side, your campaign is actively making you money. Even if you spend massive amounts of money on your campaign, if the right side of your equation is greater, you’re making more money than you’re spending.
Let’s take a look at each side in detail.
Left Side Data: Calculating Your Costs
The left side should be relatively easy to calculate. If you outsource your content marketing, simply use the amount of money you pay monthly.
If you use your internal staff for your content marketing program, calculate the total cost based on their salaries and what portion of their job includes content management. For example, if you have one full-time content marketer and one general marketer who spends half her time posting on social media and the other half doing administrative tasks, calculate your total based on one full salary and one half salary accordingly (again, monthly).
Total these up for your monthly costs and put them at the left side of your equation.
Right Side Data: Interpreting Data from Google Analytics
Now comes the tricky part.
There are two major factors you’ll want to look at here: direct content conversions and content-influenced conversions.
Direct content conversions are conversions that come about as the sole result of a user’s interaction with a piece of content. For instance, if you have a dedicated landing page that offers a downloadable whitepaper in exchange for filling out a form, every form fill-out counts as a direct content conversion. You can measure this number of conversions by setting up goals in Google Analytics for each of your specific, trackable landing pages, and measuring the number of monthly conversions they achieve.
Content-influenced conversions are conversions that came about as an indirect result of your content marketing program. These could be new visitors who found you on social media, avid readers who finally made a purchase, or users who found you through search. These are difficult to measure, because there’s no way to measure exactly how much influence your content had on a buying (or converting) decision.
However, here is an easy way to estimate them. Head over to the Acquisition tab of Analytics and click “Overview.” This will show you a breakdown of your four main sources of traffic: Organic (search-based), Direct (URL input), Referral (external links), and Social (social media posts). Of those four, Organic and Social visits are the ones most directly attributable to your content marketing program. Direct visits could easily be influenced by your content, but for the sake of preserving a conservative estimate, we’ll leave those off for now.
Total up the Organic and Social visits you’ve had in the past month, and divide that number by the total number of visits. Multiply that by 100 and you’ll have the percentage of visitors who came to your site as a result of your content marketing program. Now, take the total number of conversions (other than direct content conversions) and multiply it by your percentage. Add that number to your direct content conversions, and you’ll have an estimated number for the total amount of conversions your content marketing program is responsible for.
Do note that suffering from inordinately low conversions may be a symptom of a problem with your conversion strategy (such as your form length, site design, or offer value), rather than a symptom of a content marketing flaw. This guide assumes your conversion rates are healthy.
Assigning Your Conversion Value
If your conversions represent final sales, then calculate the average sale on your site and you’ll end up with an “average conversion value” figure.
Otherwise, use your sales data to calculate what percentage of your conversions actually result in a closed sale, as well as the average value of that sale. Multiply your total content conversions by your close ratio, and then multiply that figure by the average value of each sale. This will also serve as your “average conversion value” figure.
The Final Step
Once you know your average conversion value figure and the total number of conversions your content was responsible for, multiply those two values together. Your end result will be the total amount of money your content program brought in directly last month—and it doesn’t even count the brand value and familiarity your content facilitated! Compare this figure to the left side of your equation (costs). If it’s greater, you have an estimated—but objective—measure that your content marketing campaign is generating a profit.
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Over the years he's written for publications like Marketing Land, Search Engine Journal, MarketingProfs and other highly respected online publications. Connect with Tim on Linkedin & Twitter.
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