Why is Return On Investment (ROI) so Difficult to Calculate?
If you spend $1,000 on a writing service, you want to know you’re going to make $10,000 is sales as a result. Well, it doesn’t work that way. And this is where the ROI problem is detected. Content marketing is not necessarily tied directly to sales. It’s more indirect. We know it helps but it is difficult to concretely say this piece of content contributed to the actual sales transaction.
We all know that B2B buyer’s journey includes much online research before a sales person enters the picture. We also know that no one buys a product after reading a single blog post. Rather it is a stepping stone leading them closer to the decision to buy.
There is the problem with ROI tied directly to each piece of content created. It’s impossible to know for sure. That is unless you asked your customer about every step of their research that lead them to the purchase in the first place. That’s not a likely scenario.
So how do you measure the effectiveness of a content piece?
Start with measuring what can be measured. Things like the number of visits, number of likes, number of shares, number comments, the number of sign-ups, or number of click-throughs, etc.
At least you’ll know whether a piece is being read. This means you’re increasing your visibility and brand awareness.
Here’s a simplistic example.
Let’s say you write a blog post with a call to action leading the reader to a Landing Page. Let’s say the reader clicks the call to action to go to the Landing Page. Once on the Landing Page, the reader signs up for the offer.
The blog post’s job was to get readers to click the call to action. So did it do its job? Yes.
And did the Landing Page do its job to get the visitor to sign up for the offer? Yes.
By accepting the offer, the reader/visitor is now considered a warm lead or customer depending on your business. Now you have the ability to count the number of sign ups as warm leads or customers.
The scenario described above is a simple one. There may be multiple content pieces used to drive traffic to the landing page. As a result, it becomes quite difficult to know which piece of content lead the reader to the landing page.
“If I can say what is the number one way to measure marketing effectiveness it would be two things: Marketing Metrics and Predictive Analytics. First, marketing metrics is important because they tend to measure output things in terms of effectiveness. The second is a new trend: Predictive Analytics. Predictive analytics involves using statistics to examine and determine patterns in data.” says D. Anthony Miles, a nationally known expert in the fields of Entrepreneurship and Marketing. (Docurated.com)
There are ways to determine it though. With creative codes embedded in the piece and relying on the reader to enter such code when they get to the landing page is one way. You can imagine how complicated that may get if you have multiple step process before the landing page.
Now let’s look at a more realistic B2B Buyer’s Journey example.
Think about a typical B2B buyer’s experience. They have a problem they need to solve. They begin by researching on the internet who else has this problem and how did they solve the problem. The buyer finds user groups and communities of users who have the same problem and talk about their trials at solving the problem. Maybe they find a White Paper that explains the problem in detail and offers generic means of solving the problem. Next, the buyer stumbles upon a case study providing hope their problem can be solved. Further research, lands the buyer on an article addressing the very thing they are researching with a call to action to sign up for a webinar to learn more. After attending the webinar, a follow-up email is received with a call to action to download a demo or schedule a consultation.
As you can see this is a long process that happens over a long period of time. Decisions are not made instantaneously. How would you measure every step in the process described above? How would you tie each step together to see the whole path the B2B buyer went through?
Ryan McKee, Director of Brand Engagement at MEC shared the example below shows a typical user having 37 interactions before purchasing skis, bindings, and backpack.
There is definite value in having all these content pieces. For without them there would be no stepping stones for the B2B buyer to follow. But knowing the exact return for each piece is tricky.
How to Calculate ROI for a Content Piece According to InboundMarketingAgents.com
Step 1: To calculate true ROI, you need to know how much it costs you create content in the first place. Not just the content, but defining the strategy, the planning time involved, and the execution times too. What’s the total overhead of creating a content piece?
Step 2: “Next you’ll need to calculate the value you place on goals or conversions, and what achieving those conversions is worth.”
Step 3: Now take the revenue that can be attributed to the content piece, and divide it by the cost to produce the content piece.
If the result is less than 100%, then you still have work to do. If it is 100% or greater than you’re making more money than it took to create the content piece and you are profitable.
While the above is one way to calculate ROI, also consider ROI may mean more than dollars. You may want to measure brand awareness, security risk mitigation, or customer experience. All of these may not translate to specific dollar amount earned. So don’t get stuck on focusing on dollar only ROI calculations.
Select metrics that help you achieve your objectives and goals. Then establish discipline around analyzing your results and using those results to improve marketing efforts you implement.
There will be times when ROI will be hard to measure. In those situations, you can always keep an eye on sales as you measure all the other things mentioned in this article. While it may be difficult to tie directly, there should be a correlation to sales. If you notice sales increasing, check out the other measurements to see if there’s an increase also. Talk with the sales department to determine if they ran any special promotions during that period of time, if not, chalk it up to your awesome marketing abilities.
Prove the ROI of Your Social Strategy Webinar hosted by HootSuite June 24, 2017