All of us, marketers, know that content marketing is no longer a buzzword, but an invaluable piece of the puzzle. Without creating content we hardly have any means of engaging potential and existing customers. Not to mention that brand positioning & establishing thought leadership is literally impossible without it.
Content marketing, however, much like anything else needs to be measured and the marketer needs to have the ROI expectation information prior to even starting a content marketing campaign.
So, how do you determine the cost of content and the expected ROI?
There are several aspects that play a role into determining the cost of any content marketing strategy, but it can all be explained with a simple formula:
Content marketing = content creation cost + content promotion cost
Now, the tricky part is measuring the two parts of the equation. To make it easy we’ll follow the 20/80 rule, or in other words – we’ll calculate the time it will take to create a marketing campaign and then we’ll predict 4 times as much (in terms of working hours) for the promotion of this content.
Let’s have a look at an example
Content creation costing
If we are to run a content marketing campaign for a new service we’ll first establish the type of content which will be created for it. Let’s imagine, that we’ve boiled it down to the following:
- Research amongst potential customers to extract information about the problems they’re experiencing and use them afterwards to demonstrate how our service will solve their problem.
- A report, based on the above research which summarizes the information and is added to a landing page for lead generation.
- Five 30-second videos which tackle a specific problem demonstrated in the report and show how our service offers a solution.
- 10 blog posts – a summary of the problems and solutions, plus several blog posts each describing a specific issue in detail.
Now that we know what we’re creating, it’s time to estimate it. The estimation should include both the time aspect and the economic measurement, including the time of all people involved. Here is a proposed scenario:
Once this calculation is done for all people involved in each of the processes, you’ll have the total cost of the content creation. If you’re a business owner – please don’t forget to include your own time for reviewing the content created – this is the only way to truly know how much your campaign will cost you.
In business, as in life, every minute counts.
Content promotion costing
When it comes to costing content promotion many only think of the advertising budget. But don’t forget that it doesn’t end there. Within your content promotion strategy you may have several aspects, including, but not limited to:
- Creating social media posts;
- Contacting bloggers;
- Guest blogging;
- Reaching out to influencers;
- Email marketing;
- Search advertising;
- Social media advertising.
Besides budget, each of the above will cost you the hourly rate of the person /or people/ dealing with it, multiplied by the time it takes to complete the tasks. But how do you determine how much time it will take?
Let’s go back to the 80/20 rule which many of us, including myself, praise. The rule is:
“Spend 20% of your time creating the content and 80% of the time promoting it”
With this formula in mind, it’s easy to see how much time you should expect to spend on your content promotion efforts. If the overall calculation above shows you that you are expected to spend 1000h creating the content, then:
Time to create content 1000h * 4 = 4000h for content promotion.
If you’ll have one person involved in promoting this content and that person costs you $20/h, then your content promotion will cost you $80,000 + the advertising budget.
So, how do you determine ROI?
For many small businesses the numbers above will seem scary. And they should – many fail to recognize that salary is also an expense and should be calculated in the marketing budget. Here’s something crucial to remember, before we dig deeper into calculating ROI:
Content marketing is a marathon winner, not a sprinter.
With everything explained above, I’m sure you’re already close to figuring out how to calculate ROI. The simple formula is:
Predicted sales of the campaign – campaign budget = ROI
Don’t forget that content marketing ISN’T A CAMPAIGN – IT IS A LONG TERM COMMITMENT. Although you may decide to measure the results in 1, 2, or 3 years from the initial start of your content marketing efforts, the results will last much longer.
- The articles and videos you have created (if you’ve done a good job) will continue sending customers your way.
- The results from the report you’ve provided to your customers will build authority, which is impossible to measure, yet priceless.
- The guest posts you’ve posted will continue being shared by the blogger on whose blog you offered them to and will continue benefiting you.
After you take all that into account – you’ll be able to determine the cost of your content marketing campaign & the ROI.
Do you have any other marketing related questions? Drop them in the comments and I will answer with a post as detailed as possible.
Also published on Medium.