The Content Formula: Calculate the ROI of Content Marketing & Never Waste Money Again

Michael BrennerCEO, Marketing Insider Group@BrennerMichael

Liz BedorBrand Strategist, NewsCred@lizbedor

Calculate the ROI of Content Marketing & Never Waste Money Again

The Content Formula

@BrennerMichael @LizBedor

What is Marketing?

What is the ROI?

Let’s Talk About Banners

WARNING!

Math ahead! @BrennerMichael @LizBedor

Less likely to click on a banner than…

“We need to stop interrupting whatpeople are interested in and give

people what they are interested in.

”@BrennerMichael

@LizBedor

Take your brand out of the story and make your customers the hero.

ContentMarketing

What Brands Publish

WhatCustomers

BUSINESS INSTINCT EMPATHY CHARITY

“ ”ANN HANDLEY

THE PROMISE OF CONTENT MARKETING:

To earn your audience…

….versus buying.

Marketers need to measure things that have quantifiable value that they can take to the bank

We hear lots of questions about content marketing . . .

What is content marketing?

How do I get my content shared?

Should we hire journalists?

How can I create a viral video?

How do I map content to the buyer journey?

How do I convince my boss to fund content marketing?

What tools should I consider for my content marketing?

What is the cost of content marketing?

Is it ok to sell in my content marketing?

How do I perform a content audit?

Is content marketing the same as native advertising?Should our content be

gated?

What should we write about?

How do I get my boss to see the value in content marketing?

What are the factors of success with content marketing?

How can I get good at content marketing?

What does great content marketing look like?

Why is content marketing important?

“HOW DO I CALCULATE

CONTENT MARKETING ROI?

”Is the most common question we

hear from marketers struggling to build their own business case

internally.

1 BUILD THE BUSINESS CASE

3 MEASURE RESULTS

2 FIND THE BUDGET

Marketing should be tied to

a business case that sales and

executives can understand.@BrennerMichael

@LizBedor

The Buyer’s Journey Has ChangedThe business buyer is now in control over where information is consumed.

Buyer Sales Rep

Buyer’s Journey

of the buyer’s journey is complete before a salesperson is contacted

via @glassruss @bizo

Build the Business Case

Reach earlystage buyers

Engage new buyerswith your brand

Conversions you wouldhave never reached

How Much Early-Stage Search Traffic Comes To Your Website?

Early-stage SearchesThings that make my

product possible

Middle-stageA product type

Brand SearchesYour brand and offer

Search / Social Volume

What is Content Marketing?(10-3000 X)

How do I succeed with Content Marketing?

(2-10 X)

What tools can help me with

Content Marketing?

How Much Early-Stage Search Traffic Comes To Your Website?

Do You Rank in Position 1-3 For Your Product Category?

Organic search is responsible for 64% of

all web traffic

Only 2% of users travel to the 2nd page

of Google

18% of users click on the first organic listing

Do You Rank in Position 1-3 For Your Product Category?

IMAGINE: You Own the Categorywww.makeup.com - owned by L’Oreal

IMAGINE: You Own the Target Audiencewww.CMO.com - owned by Adobe

IMAGINE: You Are a Top Source in Your Industrywww.health.clevelandclinic.org - top source for healthcare information w/ +2M visitors per month

IMAGINE: Marketing That Attracts New BuyersAMEX OPEN Forum is the largest source of new leads for AMEX’s Small Business division

3 MEASURE RESULTS

2 FIND THE BUDGET

$100 Billion Opportunity**

Content Used30%

Content Not Used70%

** Source: Econsultancy* Source: Sirius Decisions

Calculate the Cost of Unused Content

Current contentproduction costs

Amount thatgets used

How much yourorganization is

wasting onunused content

What Do You Spend On Paid Search Because You Don’t Rank Organically?

Reallocate Budget from Low Performing Marketing Programs (Advertising?)

The average click-through rate of display ads is 0.1%. (DoubleClick)

.1%8% Only 8% of internet users account for 85% of

clicks on display ads (and some aren’t even humans!)(comScore)

50% About 50% of clicks on mobile ads are accidental(GoldSpot)

Run CRM ROI Report, Rank Low to High

CASE STUDY: Advertising Partnership Funded SAP Content Marketing

Saved / invested in content marketing platform$100,000

Reach, Engagement and LEADS SAP would have never seen.

1,000,000 Organic Visitors10,000 Subscribers1,000 Leads

We shifted investment from advertising to content

marketing so we could shout louder than we spend.

Beth ComstockCMO, GE

3 MEASURE RESULTS

2 FIND THE BUDGET

Content Marketing ROI is 4X our traditional marketing

spend. ”“

Julie FleischerFormer Sr. Director, Kraft

Content Marketing ROI

Paid vs. Organic Search Traf -fic

Organic Search Share of Voice

Unbranded Search Traffic

CONVERT

OTHER CONVERSIONS

SUBSCRIBERS

Time on Site

ENGAGE

Social shares

Subscriptions

Bounce rate

Retention Rate

Upsells

RETAIN

Content Marketing ROI - Reach

(Paid Search Budget X Organic Search Traffic) / Paid Search Traffic

The Value of Organic Search =

(Paid Search Budget X Unbranded Search Traffic) / Paid Search Traffic

The Value of Unbranded Search Traffic =

(Online Share of Organic Search / Market Share) X 100

The Value of Achieving Digital “Fair Share” =

HOW TO CALCULATE THE VALUE OF:PAID VS. ORGANIC SEARCH TRAFFIC

Organic search traffic can be calculated easily via Google Analytics:

1 Go to Acquisition2 Campaigns3 Organic Keywords

In this example, the site has received 359,953 visits from organic search traffic, totaling 25% of overall traffic.

Assume we spend $100,000 for 1,078,799 visits.

1,078,779 359,593

$100,000 X

CROSS MULTIPLY & DIVIDE TO FIND “X”

ALGEBRA DOES COME IN HANDY!

PAID ORGANIC

TRAFFIC PERCENTAGE 75% 25%TOTAL TRAFFIC 1,078,779 359,593

COST/VALUE $100,000 $33,333

ORGANIC SEARCH TRAFFIC IS WORTH $33,333

Content Marketing ROI - Engagement

(Online Ad Budget / Ad Traffic) * Repeat VisitorsThe Value of Repeat Visitors =

(Sales from Email Nurture) / # Subscribers The Value of Subscribers =

HOW TO CALCULATE THE VALUE OF:Repeat Visitors

Source: Inc, 2 Web Metrics You Should be Watching All the Time, 2014

Repeat Visitor Ratio (RVR) measures the percentage of visitors who returnto your site after an initial visit during some specific time period.

Let’s say you got 4,000 visitors this month and 800 were repeat visitors.

800/4,000 = 20%

To put a monetary value on RVR, we need tolook at the average amount you’re spending

in advertising to drive net new traffic.

For our example, let’s say you’re spending $5,000 per month on advertising to drivenew visitors.If 80%, or 3,200 visitors are net new, you’re spending an average of $1.56 per visitor.$5,000 / 3,200 = $1.56Taking that finding, we can then calculate the value of our 800 repeat visitors.800 * $1.56 = $1,250Therefore, our repeat visitors are valued at $1,250 per month.

Don’t forget that while you want to increase the

percentage of repeat visitors, you also want to increase the total number of visitors…Otherwise you’ll be preaching to the same

choir.

Content Marketing ROI - Conversion

(Content Marketing Costs / Content Marketing Leads)

(Content Marketing Costs / Event Registrations)

(Content Marketing Leads * Content Marketing Conversion Rate X Avg. Sale Price)

(Avg. Marketing Lead Sales / # of Marketing Leads) X Content Marketing Lead %

The Value of Content Marketing Leads =

HOW TO CALCUATE THE VALUE OF:COST PER LEAD

In this example, we’ve created two pieces of content:• For the ROI Guide, we spent $3,000 to create and invested $10,000 to

distribute.

• For the Strategy Guide we also spent $3,000 to create, but spent $20,000 to distribute.

• Combining these costs, we can see that the ROI Guide cost us $13,000 and the Strategy Guide cost us $23,000.CONTENT ACTIVITY COST TOTAL COST

ROI Guide Creation $3,000$13,000

ROI Guide Sponsored Email $10,000

Strategy Guide Creation $3,000$23,000

Strategy Guide Sponsored Webinar $20,000

CHANNEL COST NEW LEADS MQLs CPMQL

ROI Guide $13,000 550 205 $63

Strategy Guide $23,000 700 130 $177

Now that we know how much our content cost to create and distribute, let’s see how the content did in terms of lead generation to calculate cost per qualified lead.• To calculate cost per lead, we want to take the total cost ($13,000) divided by the total number of

qualified leads (205).

• $13,000 / 205 = $63

• Therefore, our ROI Guide cost $63 per qualified lead.

CHANNEL COST NEW LEADS MQLs CPMQL

ROI Guide $13,000 550 205 $63

Strategy Guide $23,000 700 130 $177

To determine an accurate average total cost per lead of content marketing, we’d want to take a larger sample, but for the purpose of this guide, we’ll simplify and average these two costs.$63 + $177 / 2 = $120

Therefore our average total cost per lead for content marketing is $120.

Content Marketing ROI - Retention

Content Customers / Subscribers LTV vs. LTV Customers Who Don’t Read / Subscribe

Content Customer Retention Rate vs. Non-Content Customers

Revenue per Content Customer vs. Non-Content Customers

The Value of Retention =

Thank you!

Appendix

HOW TO CALCULATE THE VALUE OF:UNBRANDED ORGANIC SEARCH TRAFFIC

#ThinkContent @lizbedor

To calculate unbranded organic search, we need to exclude your brand or products’ name from the search.To do this, create an “Advanced Filter” that will exclude those branded keywords.In this example, our brand and products contain the word “Raspberry.”

Let’s say the results showed that now with excluding branded keywords, your site’s organic search

traffic accounts for 269,694 visits, or about 19% of total organic traffic.We go back to our table to calculate the value of this traffic.

1,078,779 269,692

$100,000 X

CROSS MULTIPLY & DIVIDE TO FIND “X”

PAID ORGANIC

TRAFFIC PERCENTAGE 75% 19%TOTAL TRAFFIC 1,078,779 269,692

COST/VALUE $100,000 $24,100

ORGANIC UNBRANDED SEARCH TRAFFIC IS WORTH $24,100

HOW TO CALCUATE THE VALUE OF:ORGANIC SEARCH SHARE OF VOICE

This essentially measures how much your brand or product is talked about

compared to your competitors.

COMPETITOR 2

COMPETITOR 3

COMPETITOR 1

Now record the rankings for each keyword you selected for yourself and your competitors.

If you do rank, record in what position. (Note: You can rank more than once)

KEYWORD RANKING #1 RANKING #2 RANKING #3

DANCE SHOES 1 2 3

DANCING SHOES 2 3 4

CHEAP DANCE SHOES 2

AFFORDABLE DANCE SHOES 5

BALLET SHOES

#ThinkContent @lizbedor

2014 GOOGLE CLICK THROUGH RATES

POSITION CTR1 31.242 14.043 9.854 6.975 5.56 3.737 08 09 0

Source: Moz, Google Organic Click-Through Rates in 2014.

Now that you have your rankings, calculate yourshare of voice for each keyword using the chart to the left.

KEYWORD RANKING #1

RANKING #2

RANKING #3

DANCE SHOES 1 2 3DANCING SHOES 2 3 4CHEAP DANCE SHOES 2AFFORDABLE DANCE SHOES 5

BALLET SHOES

2014 GOOGLE CLICK THROUGH RATES

POSITION CTR1 31.242 14.043 9.854 6.975 5.56 3.737 08 09 0

Source: Moz, Google Organic Click-Through Rates in 2014.

Now that you have your rankings, calculate yourshare of voice for each keyword using the chart to the left.

KEYWORD RANKING #1

RANKING #2

RANKING #3

DANCE SHOES 31.24 14.04 9.85DANCING SHOES 14.04 9.85 6.97CHEAP DANCE SHOES 14.04AFFORDABLE DANCE SHOES 5.5

BALLET SHOES

If your rank more than once, simply add the click through rates to find that keyword’s total share of voice.

KEYWORD RANKING #1 RANKING #2 RANKING #3 SOV

DANCE SHOES 31.24 14.04 9.85 55.13%

DANCING SHOES 14.04 9.85 6.97 30.86

CHEAP DANCE SHOES 14.04 14.04%

AFFORDABLE DANCE SHOES 5.5 5.5%

BALLET SHOES

55.13 + 30.86 + 14.04 + 5.5 + 0 / 5 = 26.38

@lizbedor#ThinkContent

To find your overall share of voice, average the share of voice for all your keywords.

KEYWORD RANKING #1 RANKING #2 RANKING #3 SOV

DANCE SHOES 31.24 14.04 9.85 55.13%

DANCING SHOES 14.04 9.85 6.97 30.86

CHEAP DANCE SHOES 14.04 14.04%

AFFORDABLE DANCE SHOES 5.5 5.5%

BALLET SHOES

TOTAL SHARE OF VOICE 26.38%

55.13 + 30.86 + 14.04 + 5.5 + 0 / 5 = 26.38

HOW TO CALCULATE THE VALUE OF:SUBSCRIPTIONS

Source: AMEX Open Forum, What’s Your Email List Worth (In Actual Dollars)?, 2013

Your email list is an asset, and should be valued as such.

Source: MarketingProfs, The Art and Science of Growing Your Email List, 2014

FIRST THING’S FIRST:

You must know your maximum allowable cost threshold for getting a new subscriber, otherwise, you’re spending in the dark.

POSITIVE RETURN

DIMINISHING POSTIIVE

RETURN

MAXIMUM ALLOWABLE

NEGATIVE

RETURNS!

FIRST THING’S FIRST:

You must know your maximum allowable cost threshold for getting a new subscriber, otherwise, you’re spending in the dark.

or, worse yet, to the point of negative returns.

POSITIVE RETURN

DIMINISHING POSTIIVE

RETURN

MAXIMUM ALLOWABLE

METHOD QUANTITY OF SUBSCRIBERS (QOS) COST PER ACQUISITION (CPA)

FACEBOOK AD 200 $2.30

TWITTER 400 $1.00

PAID SEARCH 300 $2.00

WEBINAR 100 $0.10

First, calculate what it actually costs you to get a new subscriber from each list-building method.

Let’s say you’ve tested a few tactics anddecided that your maximum allowable CPA for a new email address is $1.50.

MAXIMUM ALLOWABLE

METHOD QUANTITY OF SUBSCRIBERS (QOS) COST PER ACQUISITION (CPA)

FACEBOOK AD 200 $2.30

TWITTER 400 $1.00

PAID SEARCH 300 $2.00

WEBINAR 100 $0.10

Moving forward, you’ll want to continue pursuing all methodscosting $1.50 or less.

METHOD QUANTITY OF SUBSCRIBERS (QOS)

COST PER ACQUISITION (CPA)

UNSUBSCRIBERATE (UR)

AVERAGE SALE VALUE (ASV)

FACEBOOK AD 200 $2.30 30% $100

TWITTER 400 $1.00 5% $100

PAID SEARCH 300 $2.00 15% $150

WEBINAR 100 $0.10 5% $200

Over time, we need to also measure the quality of the subscribers on your list by monitoring things like average sale value and unsubscribe rate.

METHOD QUANTITY OF SUBSCRIBERS (QOS)

COST PER ACQUISITION (CPA)

AVERAGE SALE VALUE (ASV)

FACEBOOK AD 200 $2.30 30% $100

TWITTER 400 $1.00 5% $100

PAID SEARCH 300 $2.00 15% $150

WEBINAR 100 $0.10 5% $200

To calculate the value per subscriber, we need find the difference between the sale value and cost per acquisition for the subscribers.To do this, we use the formula below:VALUE PER SUBSCRIBER = ( QOS * ASV * ( 1 – UR ) – QOS * CPA ) / QOS

METHOD QUANTITY OF SUBSCRIBERS

COST PER ACQUISITION

AVERAGE SALE VALUE

TOTAL VALUE

VALUE PERSUBSCRIBER

FACEBOOK AD 200 $2.30 30% $100 $13,540 $67.70

TWITTER 400 $1.00 5% $100 $37,600 $94

PAID SEARCH 300 $2.00 15% $150 $37,650 $125.50

WEBINAR 100 $0.10 5% $200 $18,990 $189.90

We’ll use Facebook Ads as an example:VALUE PER SUBSCRIBER = ( QOS * ASV * ( 1 – UR ) – QOS * CPA ) / QOS

VALUE PER SUBSCRIBER = ( 200 * 100 * ( 1 – 0.30 ) – 200 * 2.30 ) / 200

Therefore, the value of each Facebook subscription is $67.70

AVERAGE SALE VALUE

TOTAL VALUE

VALUE PERSUBSCRIBER

FACEBOOK AD 200 $2.30 30% $100 $13,540 $67.70

TWITTER 400 $1.00 5% $100 $37,600 $94

PAID SEARCH 300 $2.00 15% $150 $37,650 $125.50

WEBINAR 100 $0.10 5% $200 $18,990 $189.90

Based on these calculations, we can see that paid search and webinar methodsreturn the most value per subscriber.

AVERAGE SALE VALUE

TOTAL VALUE

VALUE PERSUBSCRIBER

FACEBOOK AD 200 $2.30 30% $100 $13,540 $67.70

TWITTER 400 $1.00 5% $100 $37,600 $94

PAID SEARCH 300 $2.00 15% $150 $37,650 $125.50

WEBINAR 100 $0.10 5% $200 $18,990 $189.90

Based on these calculations, we can see that paid search and webinar methodsreturn the most value per subscriber.

However, since paid search’s CPA is more expensive than our maximum allowance of$1.50, we should defer to webinar and Twitter tactics.

HOW TO CALCUATE THE VALUE OF:SOCIAL SHARES + FOLLOWERS

While social shares can be seen as anengagement metric, but should be quantified

as a free source of distribution and reach.

Let’s say you spend $1,000 on paid social distribution and reached 5,000 viewers.

For this campaign, each view was worth $0.20 ($1,000/5000).

Now let’s say a social post was shared organically by your followers and reached 500 viewers.

Based on the value of each view from our paid distribution, we can also value our 500 organic views at $0.20 each, or $100 total.

HOW TO CALCUATE THE VALUE OF:SHARE OF VOICE/OFFSITE SEO

How can you measure your off-site SEO?• Measure your inbound links and their value with Open Site Explorer.

(https://moz.com/researchtools/ose/)

• Do the same with your competitors’ sites and compare

Source: Altitude Marketing, SEO Checklist Part 2: Measure and Improve Off-site SEO Factors That Drive Organic Search Traffic to Your Site,

What to do with this data?• Scan your highest-authority inbound links for opportunity to get other similar

links.

• Scan your competitors’ highest-authority inbound links. Can you get those links too, or do they provide ideas for getting similar links?

• Inbound links from non-profit (.org) and education (.edu) sites are especially powerful.

• Build your inbound links gradually. Google algorithms will notice, and may penalize a quick accumulation of links.

Source: Altitude Marketing, SEO Checklist Part 2: Measure and Improve Off-site SEO Factors That Drive Organic Search Traffic to Your Site,

HOW TO CALCUATE THE VALUE OF:PERCENTAGE OF LEADS FROM CONTENT MARKETING

Looking at this gathered data, we see that content marketing accounts for 205 of thetotal 710 marketing qualified leads.

PROGRAM MQLs

Content 205

Events 300

Advertising 30

Email 100

Public Relations 75

Total 710

Looking at this gathered data, we see that content marketing accounts for 205 of thetotal 710 marketing qualified leads.To find the percentage, we take 205/710 to find that content marketing accountsfor 28.9% of total qualified leads.

PROGRAM MQLs PERCENTAGE

Content 205 28.9%

Events 300 42.2%

Advertising 30 4.2%

Email 100 14.2%

Public Relations 75 10.5%

Total 710 100%

EVENTS

ADVERTISING

CONTENT

PUBLIC RELATIONS

HOW TO CALCULATE THE VALUE OF:CONVERSIONS

PROGRAM MQLs CONVERSION RATE

AVERAGE SALESVALUE

Content 205 50% $500

For this example, let’s say our content marketing has a conversion rate of 50% and the average sale is worth $500.

AVERAGE SALESVALUE

Content 205 50% $500

• To find our total conversions, we need to multiply our total qualified leads by 50%.

For this example, let’s say our content marketing has a conversion rate of 50% and the average sale is worth $500.

AVERAGE SALESVALUE CONVERSIONS

Content 205 50% $500 102.5

For this example, let’s say our content marketing has a conversion rate of 50% and the average sale is worth $500. • To find our total conversions, we need to multiply our total qualified leads by 50%.

• 205 * 50% = 102.5 conversions

Content 205 50% $500 102.5

• 205 * 50% = 102.5 conversions

• Based on that finding we assume these sales will average $500, so to find the total value we multiply 102.5 * $500 = $51,000

TOTAL CONVERSION

Content 205 50% $500 102.5 $51,000

• 205 * 50% = 102.5 conversions

• Based on that finding we assume these sales will average $500, so to find the total value we• multiply 102.5 * $500 = $51,000

• Therefore, our total content marketing conversions are worth $51,000

The Content Formula: Calculate the ROI of Content Marketing & Never Waste Money Again

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