As online advertising has become less efficient due to the revised privacy regulations, content marketing is a necessary addition or even a great alternative to ads. The budget you spend on content marketing can yield a lot! Calculate the return on investment of your content in 4 steps.
What is Return On Investment?
Return on Investment, often abbreviated as ROI, indicates how much each euro you invest – in this case in content marketing – yields.
How do you calculate whether it is worth investing in content?
The following do-it-yourself method is especially suitable for e-commerce companies and companies that mainly generate digital leads. If your marketing objectives are focused on brand values and brand equity, or if you advertise a lot in different media, then calculating your ROI is more complex. The data experts at Matter are happy to help you with this.
You also generate value like brand equity, increased consideration, buzz and employee pride.
Example ROI calculation in four steps
Step 1: Determine the revenue from content in the last quarter
Do you work at an e-commerce company with impulse products and/or services? Simply add up the revenue from content clicks and determine the revenue. Do you work at a company that focuses on digital leads? First, determine the value of a lead. For that, you need to know two things: how many of the leads you got through content normally lead to a transaction? And how much does someone spend on average throughout the period that they are a customer? If the average lifetime value is €800 and 15% of new leads result in a purchase, then the value of a lead is 15% x €800 = €120. The total return from leads from content is then the number of leads x €120.
Step 2: Determine how much you spend on content production and distribution on average per quarter.
Think of producing articles, blogs, podcasts, videos and whitepapers, researching image rights, sending out a newsletter, and optimizing your SEO. Also include the cost of internal hours for, for example, developing a content strategy.
Step 3: Then add up what you spend on content per quarter.
This includes any licenses for software or hosting.
Step 4: Calculate the ROI.
ROI = revenue from content (step 1) – the cost of content (step 2 + step 3), divided by the cost of content (step 2 + step 3).
The Matter experts are happy to help and support you.
What does a content ROI above or below 1 mean?
A ROI above 1 indicates that the content is profitable. But the value is often below 1, just like with regular advertising (the average ROI of advertising in Europe is 0.81 – not including the costs of creative production).
Remember: you are only looking at one short-term aspect of the return with this calculation. You also generate value with your content that you have not taken into account here. Think of brand equity, increased consideration, buzz or employee pride.
What does a ROI analysis cost?
When your company has a tight budget and a good understanding of the digital customer journey, the above calculation is relatively easy to do yourself. Matter is happy to help you with the measurement plan, analysis, interpretation, and optimization options.
Depending on the situation, this can cost €3,000 to €5,000. The costs of Marketing Mix Modelling and in-depth Return on Content measurements vary per case. Take into account amounts between €15,000 and €25,000 for good research with concrete conclusions and optimization handles.
Our experts are happy to help
Get to work on ROI! Just analyzing changes and trends in your ROI will provide relevant insights. The Matter experts are happy to help and support you.
Would you like to know more about our Matter approach and mean your ROI on content marketing? Please fill in the form!