In business, the ROI (Return on Investment) is one of the most important indicators for success or failure. It describes the ratio between the profit and the costs of a particular investment. Many marketing departments, CEOs and freelancers are still struggling communicating the ROI of their company’s content (marketing) efforts. Yet, it’s crucial to know the business value of content in your organisation.
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In this article, I’ll try to provide a basic approach to calculate your content’s ROI. Although, I won’t be able to sketch a complete DuPont analysis for your content, it might be a first step in controlling your efforts in content strategy and/or content marketing.
Know what & how to measure
Peter Drucker might have coined one of the most important quotes in business management:
If you can’t measure it, you can’t improve it.Peter Drucker
Most businesses are not able to track the performance of their content. You might think you are missing the right tools or the knowledge to measure your content performance. However, you can start small with just one free but comprehensive tool: Google Analytics. If you haven’t implemented Google Analytics (or a similar website analytics tool) so far, stop reading and go ahead to install the tracking code.
With a website analytics tool like Google you’ve taken the first step towards measurability of your content. However, it seems there is an infinite number of content-related data that can be tracked out there. Don’t get lost in the details.
Before you can decide what you want to measure you need to know where the content of your organisation lives. At this point I would recommend you to go for a content audit of all the content your company has produced. To save you time and trouble (at least for now), you can also take a look at the different channels your company uses to communicate.
Make a list of the different social media channels, websites, blogs, newsletters, etc. your organisation is offering. Subsequently, you have to find common key figures which you can use to represent the performance of the different channels. As soon as you know what data you are looking for, it will be easy to find a suitable tracking tool.
Common KPIs for content performance
In the content strategy community, there is still a lot of discussion on how to measure content performance and success. Especially soft factors such as trust, brand, sentiments and similar qualitative data are hard to measure and assess.
Nevertheless, there are some important KPIs that can be measured for almost every channel, whether it’s your newsletter, website or Facebook page:
- Reach: the total number of different people exposed at least once
- Engagement: how involved people are with your content
- Leads: the total number of new contacts (email addresses or similar) created
- Conversions: the total number of goal achievements (sales, downloads, etc.)
While reach can be seen as a vanity metric, which means it won’t have any value for measuring success, it’s still a basic indicator for your content’s possible influence. From a business perspective, leads and conversions are definitely the most important KPIs.
Calculate your ROI
Now it’s time to connect the KPIs with your investments. You can analyse each channel on it’s own or you can calculate the ROI for all channels and your whole content marketing efforts. I would suggest you to break it down to the different channels. This will help you to find the most successful channels. For each channel, divide the investments (cumulative costs) by any KPI. The result could be for example the costs for each person you reached, the costs for each lead and more commonly the costs for each conversion (sometimes also described as CPA, cost per acquisition).
Fuel for content controlling
But why should you measure all these things and relate it to your content (marketing) investments? It’s the most basic thing you could do for content controlling. Whether your are an analytical person or not, it’s crucial to know whether your efforts are profitable or not. It’s even better if you know which efforts (for example channel-wise) are more profitable than others.