What’s the ROI of Content Marketing?

Have you ever wondered, why ROI plays such an important role in content marketing or marketing in general? Let’s start with what exactly is ROI. 

What is ROI?

ROI stands for ‘Return On Investment’. Return on investment tells us about profit gained or loss generated on an investment. It is a performance measure which tells us whether the investment made is feasible or not. We can say that ROI justifies your marketing. 

As we have understood what ROI is, let’s have a look at what content Marketing is.

What is Content Marketing?

Content marketing means creating strategic and relevant content and marketing it in order to generate leads and audience interest, improving search engine ranking, increasing brand awareness etc. It is a sub-branch of digital marketing. Content marketing works because it combines other digital marketing tools like SEO and social media marketing.

If we compare traditional marketing with digital marketing. Digital marketing, more specifically content marketing is more effective because in traditional marketing methods, one goes to the audience to advertise or market the product. It’s an interruptive method. E.g.: Salesmen going door to door to sell ta product. Whereas in content marketing audience discovers the content and consumes it whenever it wants to. E.g.: Instagram posts, tweets, podcasts etc. Content marketing is more about what does the audience want than about your brand or product. It is consumer oriented.

Types of contents that are created for content marketing are:

• Blogs
• Videos
• Emails
• Social Media posts
• Podcasts 
• Quizzes
• Games
• Infographics
• Courses
• Free apps
• Webinars and much more

It is said that marketing is the key to success and this is very true. But why is that a lot of times marketing fails. To successfully market a product, brand or company it is very important to have a marketing strategy.

How to create a marketing strategy?

Things to keep in mind while creating a marketing strategy

1. Set your goals and missions –

Understand the requirements and set up goals that you aim to achieve from content marketing. 

2. Determine your KPIs –

Note down all the key performance indicators that could benefit your company and can be obtained from content marketing. There are 7 important metrics or KPIs that must be considered in order to make content marketing a success.

• Lead Quality
• Sales
• Web Traffic
• Onsite Engagement
• Social Media ROI
• SEO Success
• Exposure and Authority

3. Decide Content – 

On the basis of audience and product, decide what type of content do you want to create. E.g.: For a fashion brand endorsement social media influencers are selected and hired to promote the product.

4. Identify Resources –  

Consider all the resources that one has like social media accounts or websites, content creators and marketers. One must also take care of financial as well as time resources.

5. Create Content – 

Create audience specific and trendy content. While creating content one must take care of the standard rules and regulations as well as user guidelines in accordance with the platform on which it will be distributed.

6. Distribute and market –

For marketing and distribution one must have a properly trained team of individuals who have experience in the field.

Content Marketing or any marketing is a long term process. It is often chosen as the long term strategy for digital marketing.

Content is an asset that never breaks down or needs to be thrown away. It’s affordable to maintain, and it provides lasting value over time. It provides compounding returns value over time. Returns are directly proportional to the amount of content created as well as for how long the content has existed.

Let’s see how we can calculate ROI of content marketing. Though not the ultimate measure but ROI is one of the most useful measures to calculate success.

How to calculate ROI of content marketing?

It’s really difficult to track ROI especially in content marketing due to the ever changing numbers as well as non-monetary values. In order to optimize your content marketing strategy and maintain enviable performance levels, one needs continual feedback and analysis of their content. But more than that, clarity from the numbers is extremely essential.

Here’s the formula of content marketing ROI –

ROI=(Return-Investment)Investment×100

So, what can be considered as return and what can be considered as an investment. Let’s find out.

Returns may or may not be monetary. Customers gained from a campaign or people reached could also be considered as returns. Below are some parameters which can be considered as returns.

Some parameters to calculate returns can be-

1. Leads- The number of people reached who then are converted into leads. This can be calculated for contents like emails and webinars.
2. Conversion rate- The percentage of conversion of leads to customers. Formula for which is:  conversion rate=customersleads×100
3. Profit- The profit made through the sale of the product.

Just like returns, investment might and might not be monetary. Here’s what can be considered as an investment.

Parameters to calculate investment-

1. Cost of advertising- The amount spent on advertising and promotion of the content.
2. Time- Hours spent on advertising
3. Man power- The number of sales executive / content creators who were required for the given task.
4. Cost of development- The money as well as other resources that were consumed while developing the content.

Using these parameters, we can successfully calculate ROI of content marketing. This method can also be used for calculating ROI for other types of digital marketing. It is quite possible that during initial time frames the ROI value is negative, rather 60 out of 100 companies don’t get benefited from the content marketing at first. As it is a long term process, it takes some time for the figures to turn positive and contribute to the profit of the company. The only thing that should be taken care of is that the growth of the ROI should always be positive.