How To Calculate Content Marketing ROI

How To Calculate Content Marketing ROIThe single most important concept in small business content marketing is ROI - Return On Investment. As a small business, you simply cannot waste millions, thousands, even hundreds of dollars on marketing campaigns that don't produce specific and measurable results for your business. I'm a major proponent of ROI in my own business, and you should be too. Every single marketing strategy you employ should be designed to bring money back into your business. Today I want to look specifically at a question I get asked a lot, "How can I calculate the ROI on Content Marketing?"

Like any other form of marketing return on investment, Content Marketing ROI can be calculated as long as you're tracking your efforts, your expenses, and your results.

What Is Content Marketing?

Obviously this is a broad question outside the scope of this post. Since our goal here is simply to calculate R.O.I. we really just need to make a list of all the Content Marketing strategies you're currently using. Your list might include:

  • Blogging
  • Social Media
  • Webinars
  • Video Marketing
  • Guest Blogging
  • Email Marketing
  • Article Marketing
  • Infographics
  • Podcasts
  • Teleseminars
  • Print Newsletters
  • Magalogs
  • And much much more!

Since so many diverse strategies that get the "Content Marketing" label, you just need to make a list of the strategies YOU are using in your business. This is also a good time to consider what Content Marketing strategies you are using and what new strategies you should explore and try out.

What Are Your Content Marketing Hard Costs?

You should end up with a list of practices you're using each month. Let's say your list includes Blogging, Social Media, Webinars, and Email Marketing.

Great! Now we have an idea of what your monthly Content Marketing campaign looks like. In order to get an accurate idea of how much you're spending each month on Content Marketing, you'll need to add up the costs you pay for software, services, tools, postage, printing, and any other hard costs you can identify. Hard costs are much easier to determine because they generally show up as single line items in your credit card or business checking statements.

Here's an example of a breakdown:

Blogging
-$450/month Blog Copywriting & Management Service
-$10/month Blog Hosting Fees

Social Media
-$250/month Social Management Services
-$40/month Social Analytics Tools

Webinars
-$50/month Webinar Hosting Software

Email Marketing
$200/month InfusionSoft CRM

TOTAL = $1000/month

What Are Your Content Marketing Soft Costs?

Now that we know your hard costs, we can move onto soft costs. "Soft Costs" is simply a loose term that refers to any ambiguous or indeterminate costs. For our purposes, since we're looking at Content Marketing, you'll want to think about labor -- your own labor and the labor of your employees and/or contractors.

Since soft costs relate more to time and labor, they can be difficult to calculate precisely. Calculating the time spent to pay your employees and contractors is fairly easy to do. If, for example, your employee spends 10 hours per month working on tasks related to your Content Marketing campaign at $10 per hour, then just calculate that as $100 plus any payroll or other processing fees.

Your own time is much more difficult to calculate, but important to consider. Let's say your time is worth $100 per hour. If you are running your own Blog and doing all of your own social media work, and you spend 10 hours per week (40 hours per month) then we're already at $4000.

I do strongly suggest breaking out this calculation as accurately as you can -- especially if you personally are doing a lot of your own Content Marketing work. Once you have a total of all hard and soft costs, just add them together to get a final total figure.

Calculating Your Content Marketing ROI

Now you'll need to determine how much money is coming INTO your business from your Content Marketing efforts. The only reliable way to track this is to use a tool like InfusionSoft to track your Lead Sources and your specific Marketing Campaigns. The thing I love about InfusionSoft is it actually allows you to plug all of your expenses directly into your Lead Source tracking.

In our business, for example, we get a lot of great leads from LinkedIn. So we keep track of the total advertising and other costs we have each month for LinkedIn. Then, at the end of every month, every quarter, or every year we pull a Total Customer Value report inside InfusionSoft to see exactly how much revenue came from customers we acquired through LinkedIn.

So, in order to calculate the total Content Marketing ROI in your business, you'll simply need a Total Customer Value report for all of your Content Marketing lead sources. These might include Facebook, Twitter, Google (from Blogging), and Webinar Registrations. Once you have that total number, you can calculate your return like this:

Total Content Marketing Expenses = $1000/month
Total Content Marketing Revenues = $3000/month

Total Content Marketing ROI = 300%

In other words, you spent $1000 and you got a $3000 return.

Why Lifetime Customer Value Is Important For ROI
A key concept you need to recognize in this equation is something called "Lifetime Customer Value" (LCV). LCV is simply what the name suggests -- it's the total amount of money a customer brings into your business over the course of the "lifetime" of their relationship with you and your business.

This concept is so important because some customers will take 1 month to buy, some will take 10 months to buy, and others may take 100 months to buy. (Yes, seriously.) Always remember: your goal is to create a complete Content Marketing sales funnel.

Also, the total value of a customer you've acquired should continue to rise over time. And when that happens, your ROI goes up too. This is why it's so important to calculate ROI monthly, quarterly, and annually. A great Content Marketing campaign you launch this month could take several months to bring new business into your coffers.

So, what are you waiting for? Get started calculating your Content Marketing ROI!

Jason Clegg

Jason Clegg is the CEO & Founder of Convert With Content. He's on a MISSION to help small businesses convert tire-kickers into lifetime customers & raving fans with #ConvertWithContent marketing systems that work! His secret weapon is Infusionsoft.

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Jason Clegg - December 17, 2013 Reply

What are you including your Content Marketing ROI calculations?

Stephanie Frasco - December 17, 2013 Reply

This is such valuable information. Calculating ROI should be simple. This sums it up nicely.

Christina - January 14, 2014 Reply

Hi Jason,

Where did you find those estimates from? Would you be able to share the providers? Are those realistic numbers? Thanks!

    Jason Clegg - January 17, 2014 Reply

    Hi Christina,
    Yes, those are very realistic numbers. I based the Blog Management and Social Media Management pricing off our own service offerings and prices. Hope that helps!

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