March 28, 2019
In last week’s installment I covered several steps you can take to ensure you are accurately measuring the impact of your content marketing efforts, focusing on top and mid-funnel tactics. This week we’ll take a closer look at how to measure your content marketing activities that are designed to drive bottom funnel objectives, specifically conversions. With only 21% of B2B marketers saying they are successful at tracking the ROI of their content marketing activities, there is clearly plenty of room for improvement in how marketers measure and analyze the results of their BoF efforts.
Measuring the Performance of Your Bottom of the Funnel Content
Hopefully, by now you’ve embraced the idea that content marketing can be an effective approach for generating leads, improving the quality of your leads and successfully nurturing them along the entire sales cycle. Your in-depth research has provided you with a deep understanding of your customer’s informational needs at each point along their journey and you’ve built up trust and credibility as a provider of this information at each step of your customer’s journey. For a key segment of your target audience that has progressed to the point of making a purchase decision you are now looking to close the deal, so your focus should be on producing content that will do one or more of the following:
- Makes it clear how your product or service is different from or superior to your competition
- Removes all barriers from the decision-making process
- Provides support for a prospect’s decision to purchase from you
Don’t forget, you’re still using the guideposts of relevancy, accuracy and value, and you’re focused on providing fact-based content that your prospects are either actively seeking or will assist them in their decision-making, possibly in ways they may not have even been aware of. At this stage, perhaps more than any other, having that deep insight into what really matters to your target customer becomes a huge advantage. If you know what criteria they prioritize when making purchase decisions, or whether the decision is made by an individual or a committee, you can craft content that speaks directly to what is most meaningful to them and their influencers and will drive that critical conversion.
Content you create for prospects that are ready to buy may require you to do the greatest amount of heavy lifting, but the impact will also be the greatest. On the flipside, drop the ball at this point in the game, when you’re so close to the finish line, and you’ll experience the greatest hit to your ROI. I know we’re talking about measurement, but I can’t emphasize enough how critical it is to get the content elements right. This means investing the time to make sure your content strategy, informed by research, is sound and your execution is aligned with your strategy and executed at a high level. Otherwise, your measurement efforts will just expose how poorly your content is performing.
Managing Your Data
Depending on the number of different pieces of content you create, how frequently you publish and how many different versions you create to distribute across different platforms, you are potentially looking at a significant amount of data to monitor, capture and analyze. This is another reason to invest sufficient time into setting up your measurement methodology prior to beginning the content production and publishing process. Commit sufficient time and resources to developing a plan that includes:
- What data you want to capture – Your data sets will align with your success metrics and one data set can be associated with more than one success metric.
- How you will record and capture the data – There are many options, including simple Excel spreadsheets, third-party analytics apps, and custom built back-end systems.
- How you will you view and analyze the data – The value of your performance data is only as good as your ability to analyze it and extract useable insights. If you are only creating a couple pieces of content a week and distributing on one or two platforms you can probably derive actionable data through a manual process. However, as you grow your content marketing efforts you will reach a point where this becomes unmanageable and you will want to explore investing in a marketing dashboard. The beauty of dashboards is that they pull in and assemble data from multiple sources to give you a single view of how your content is performing and allow you to customize what data points you see and how they are presented. Here is a really good overview of some of the most popular marketing dashboards currently available. I’ve had success with Tableau, primarily due to their flexibility to accommodate businesses of all sizes, and Hub Spot, because of its ability to breakdown revenue attribution, but the best solution for your business will be determined by your individual needs and priorities. A good dashboard that you find easy to use and puts all the critical data at your fingertips is one of the most valuable tools in a successful content marketers toolkit. Take your time to trial several until you find the right one for you.
How To Calculate Your ROI
Ask any seasoned content marketer to talk about measurement and you’re sure to get a response that includes how important it is to “manage expectations” and that “content marketing takes time.” Both are true but neither are likely to help you a whole lot in gaining support for content marketing efforts in your organization. Yes, you need to be realistic with timelines, but you also need to show real impact. As the marketing function moves from being a cost center, in most organizations, to a revenue generator, marketers are under more and more pressure to prove how every marketing dollar spent contributes to the bottom line. In other words, for your company’s content marketing efforts to receive the needed resources, you will need to demonstrate its ROI.
The first step in figuring out how to calculate the return on your content marketing investments is to define each of the components. For example, what costs should be counted as an “Investment,” and is the “Return” based on all sales, sales generated during a specific time, or over the lifetime of a customer? Here are a few suggestions for what components to include and how to define them.
- It’s important to bear in mind, and communicate to stakeholders, that early returns aren’t always the best barometer: Any marketing program necessarily begins with a negative ROI, increasing in return over time as it scales in volume and reach. Just like you need to give your content time to have an impact, you need to give your performance numbers time to adjust as your conversions increase.
- In order to analyze these conversions, to determine which of them happened as a result of your content marketing strategy, you’ll have to make some small leaps of faith. For example, it’s fair to assign the organic traffic coming from search engines to your content marketing efforts since your content is what’s pulling in inbound links. The more inbound links your site has the higher your domain authority will be. The higher your authority, the more visible your website will be on search engines, and so on.
- You should also factor in referral traffic. All the off-site content that you’ve published on other platforms has likely had a significant impact on your referral traffic, so this clearly should get credited to your content marketing.
- Social media traffic is also going to most likely be a significant contributor. If your distribution strategy has been designed effectively, this may actually be your biggest driver of engagement.
- If you have tagged your site correctly, you should now be able to filter out any conversions, from your monthly total, that you cannot attribute back to your content—leaving you with the monthly conversions that your content drove. Tally up the revenue received through those sales and you have a pretty accurate Return number.
- Depending on your line of business and the length of the sales cycle, you’ll want to give your content marketing program a minimum of 3-6 months of runway before you begin gathering return data. The most accurate baseline, upon which you can gauge future success, will come from months 6-12 of sales data.
- Accurately calculating what you are spending on your content marketing can be very easy. Or very hard.
- If you outsource all your content marketing work to an agency, it’s relatively simple. It’s their fee, plus some percentage of the salary of whoever is managing them. If you are paying on a project basis or per asset produced, it’s a little trickier and probably best to take the average cost over a specific time period. The challenge here becomes determining the corresponding period of time for return/revenue. Again, a lot depends on the length of your sales cycle but if you have an ongoing content marketing program, I’d suggest using your investment/cost from months 1-6 and your return/revenue from months 3-9. This assumes an average sales cycle from first touch to conversion of three months. If your sales cycle is longer, just push the start of your return time period out accordingly.
- If, however, you do your content marketing in-house, your primary cost will be your employees. If you have a dedicated team, then it’s just the sum of their costs to the company, including wages/salaries, benefits, and a percentage of hard costs (equipment, workspace, supplies, etc.). If your content marketing teams consists of people with shared responsibilities, then it becomes a bit trickier. You just have to assess what percentage of their time is dedicated to content marketing activities and use that percentage of their cost-to-employ.
- Also don’t overlook outside expenses, such as freelancers (e.g. a professional photographer for product shots or graph designers for infographics).
- You may also have media costs if you have decided that promoting your content across different social platforms is needed to obtain the desired reach.
- The bottom line here is that you need to know all the costs that are included in creating your content, promoting it and measuring its impact.
Doing The Math
Okay, now that you’ve figured out how you want to define the variables in the ROI equation you have to figure out what equation to use. Again, there is flexibility here and what’s right for others may not be right for you.
If you’re strictly interested in calculating profit, it’s pretty straightforward as discussed above. But there are other benefits, some more tangible and some less tangible, that your content marketing may be contributing to. For example, in addition to driving individual sales, an effective content marketing program can increase average order size producing a better revenue-per-customer metric. Content marketing can also support your up-sell and cross-sell efforts or improve your customer retention rates.
One popular BoF metric that content marketing is very effective at improving is lead conversion rate. Lead conversion rate, not to be confused with sales conversion, is calculated like this:
Number of leads collected/total site traffic x 100
Do you know the value of each lead produced? To determine how much each lead is worth you have to know your conversion rate. For example, if you convert 1% of web site leads to a sale and each sale is worth an average of $1,000 then each lead is worth $10. To calculate the ROI, where return=revenue, determine your total cost of creating and promoting your content for the month. If this expense was $2,500 then you need to generate 250 leads to cover your content marketing investment. Anything over this number is positive return on your investment. This is just one way of looking at your content ROI.
Almost every one of my clients has, at one point or another, asked me “What’s a good conversion rate for our content marketing programs?” Of course, this is dependent on many things, such the platforms and channels you are using to publish and distribute content, the industry you’re in, contract size, sales cycle, etc. But as a rule of thumb, a good inbound marketing conversion rate is around 4 percent. To really know what “good” is for you, establish a baseline against which you measure future efforts. Again, I’d use the first six months as a minimum as content marketing takes a bit of time to get traction and build momentum. If your company has the patience and confidence in content marketing, use your first year to build a foundation of performance data to use as your benchmark going forward.
You Determine the Value of Your Data
Becoming good at figuring out your content marketing ROI will give you confidence that you can measure what you’re doing but its primary benefit is informing your future marketing efforts. The goal is to ensure that the money you are spending on content is being spent wisely, that it’s attracting more interest in your brand, engaging more prospects and, ultimately, leading to a growing number of sales.
It’s also necessary for determining what types of content work best for all of your demand generation activities. For example, you may find that investing money into high-production video content is driving a lower return on investment than an event sponsorship with speaking opportunities or a series of well-researched infographics, which cost about the same amount to produce.
This insight into what your audience prefers and responds to is invaluable macro business intelligence. Your ability to see the ROI, conversion rates, and consumption metrics on the individual pieces of content (blog posts, podcasts, short guerilla-style videos, etc.) is equally valuable at the micro level, allowing you to make data-driven decisions on what is most effective at moving your audience along the sales funnel.
Having an effective way to report on the results of an initiative is necessary and always useful when looking to make a case for future investment or doling out credit for good work, but I would argue that the most value from a sound approach to measurement comes from the ability it gives you to know what’s working and what isn’t and use this information to inform future efforts and improve results. It provides actionable insight that informs decisions, both short term and long term: decisions about strategy, about timing, about resource allocation and about the future direction of your company.
You may be surprised that what works the best isn’t what you had anticipated. Keep measuring your content ROI and other KPIs so you know what is and isn’t working, what to replace your low-performing content with and where to funnel more of your marketing dollars. Launching a successful content marketing program takes research, planning, dedication and follow through. Repeated success requires a process that effectively capture and analyzes results from previous efforts and applies those learnings to future efforts, or as the greatest college basketball coach of all time would say:
“Winning takes talent, to repeat takes character.”
In a future post we’ll take a closer look at how your performance data can inform everything from real-time campaign optimization to target audience expansion to new product development.
Thanks again for taking the time to read and if you have questions of suggestions for future topics, we would love to hear from you!