freeimage-7057984-webHow are you tracking the return on your content? It’s a simple question, but for many marketers, it’s one that likely comes with a complex answer.

Why? Let’s look at the context. This year, content marketing has become the #1 priority for marketers. Yet most of the emphasis so far has been on simply producing the content in the hopes that if we build it they’ll come. But now content investments are coming due and the CMO’s organization is being asked to demonstrate a return on the more than $16B being spent on content marketing.

While some companies are tracking leads generated directly from white papers or webinars, and others can track viewthroughs and shares of online video clips, I’d estimate that there are many who haven’t taken the next important step of measuring the return on their content investments.

It doesn’t have to be this way though, and if the content marketing ecosystem – which includes everyone from brand marketers and content producers, to agencies and software platforms – is going to continue to thrive, then marketers need simple ways to measure their return on content.

A Four-Step Return on Content Framework

While there’s no one correct way to measure your content efforts, I’d like to share a simple framework that should give you a reasonable starting point. There are four steps:

1. Calculate your fixed content creation and development costs
How much does it cost to create the content? These include elements like video production, copywriting and design, and the labor behind them.

2. Calculate your ongoing promotional costs
How much are you spending to get the content seen? This includes factors like paid promotion on social networks and ad platforms, and your average click-through rate or CPM. 

3. Identify your payback factors
Since you’ve paid to have content developed and you’re paying to get it seen, now you need to determine the actual payback. Metrics that factor into payback can include online conversion rates and the number of leads generated, as well as sales stats like average order value (AOV) or average selling price (ASP).

4. Calculate your return
Identifying how much the content initiative cost and what you gained in exchange is the hard part. Now, calculating the return on your content is as simple as dividing the net payback by total cost within a consistent time frame.

The Framework in Action

Take a financial services brand that launched a content marketing campaign across three personal finance blogs, for example. The campaign includes a series of three videos, a retirement guide, and an infographic on personal wealth. The initiative is supported by a display campaign to drive traffic to a branded content site designed to further inform and capture leads. The company spends a total of $40,000 to create and promote the content over six months (Step 1: Fixed content creation cost and Step 2: Ongoing promotional costs).

Through promotion, SEO and social sharing, the company is able to generate 1,400 targeted site visitors per month. That traffic converts to newsletter signups or free consultation requests at a rate of three percent. Those leads convert into actual customers at a rate of 10 percent . At an average 6-month value per customer of $3,000, the total payback revenue is $75,600 (Step 3: Payback factors).

Using the framework, this financial services company achieves a return of 89% on their content program in that six month period (Step 4: Calculate the return). And while there are likely a myriad other benefits like increased brand awareness and growth in thought leadership, utilizing this formula offers some solid data to put in front of a skeptical CFO.

It’s a little fuzzy without real numbers from your own business, so I encourage you to download our free Content Return Calculator, which is an easy to use spreadsheet that lets you plug in your assumptions and start quantifying the value of your content marketing efforts.

What If Content Return is Negative?

There is no one-size-fits-all set of metrics for content costs and paybacks across market segments, so questions will arise about different variables and industries.

There’s also the question of what determines whether a company is getting a “good” or “bad” return on content marketing. Will it be higher or lower based on the target audience? Is it OK to have a negative return?

Meanwhile, measuring the return on your content in the way I’ve described above doesn’t measure softer brand benefits such as positioning or credibility. Those are all important factors in assessing the value of content marketing, but we didn’t include them because there’s a separate, more difficult art to quantifying brand value in most cases.

Content marketing is undoubtedly hot. It feels good to offer something to consumers that’s more valuable than just advertising messages, and there are many of us who intuitively recognize content marketing as an effective part of the marketing mix. But removing the black box and clearing up some of the fuzziness will get everyone from the CMO, to the CFO and the CEO on board with content marketing’s role and business value.