Content marketing is still in its infancy. However, as with social media before it, it’s starting to poke its little head out of the safe world of harmless early–adopter experimental stuff without real budgets, and growing to become a widely accepted and vindicated marketing practice. 

As content marketing goes mainstream, conversation has started to turn from "Ooh, this is exciting" to the thorny topic of return on investment (ROI). 
I recently stood up at a conference and asked a distinguished panel of content gurus one question: what are the hard metrics when measuring content ROI?

My question was on behalf of a client whose digital strategy was based around storytelling. The strategy worked beautifully, but we wanted to know how content contributed to that success as opposed to good design, user experience, and technology.

What experts don’t know

After a sharp intake of breath, one expert declared that success was a joint affair (a bit of a cop-out answer).

Another confidently assured us it was down to whoever proposed the storytelling strategy.

Then one content guru refreshingly admitted he didn’t know, because there were no hard metrics to measure content.  

I feel he was half right; there are some hard metrics, but it’s quantifying the soft metrics that’s difficult.   

Let’s rewind for a moment and define what we want to measure. The Content Marketing Institute recently updated its definition of content marketing to “a strategic marketing approach focused on creating and distributing valuable, relevant and consistent content to attract and retain a clearly defined audience – and ultimately to drive profitable customer action.” 

The same source claims that 23% of B2C marketers are successful at tracking the ROI of their content. They also claim that 74% of marketers believe they could drive 2.5 times more ROI, brand lift, or lifetime customer value (LTV) if they had an expert content team.  

This begs the question, how are these marketers tracking content ROI with such success? What do they know that my panel experts didn’t? 

Delusions of ROI

Perhaps these marketers are fooling themselves. Or perhaps they truly have demonstrated a causal link between their content and their overall business results.

Either way, for content marketing to be worth doing, we need to understand how it’s influenced the sales funnel. We have to demonstrably 'move the needle' if we want anyone to buy into our content strategy. 

Just show me the money! 

The bean-counting view of content marketing goes something like this: 

1. You produce content that is found by consumers
2. Consumer engagement with your content must generate sales to a value higher than the content creation cost to justify making more content
3. That is all

To begin to create an ROI calculation model, you need to balance all the measurable benefits of your content marketing with the hard outgoing costs to the business: salaries, content creation overheads, distribution costs and the price of any paid promotions.  Oh, and don’t forget the cost of content creation software ownership and possibly a few content monitoring tools. 

Now look at the third element: cost savings. Good content replaces a salesperson in many cases, and answers questions without the need for (or cost of) a customer service representative.  So the formula we’re working with so far is:

Revenue generated + Savings made – Total cost of Creation = ROI 

To create a viable ROI calculator, though, you’d have to account for immediate and residual brand effect, as well as sales conversions.

The soft impact of good content 

The problem with the accountant’s approach to content ROI is that it focuses on connecting content consumed to sales. This is enough for some companies, but it’s missing a big chunk of the measure. Content delivers less tangible, longer term value that isn’t explicitly included in the ROI formula above. 

Content marketing is fundamentally about earning familiarity and trust, building a relationship. For most businesses, it doesn’t produce a flood of sales from the first blog post or tutorial video. Instead, each piece of content creates familiarity and affinity with your brand so that when the consumer — or someone they know — is in the market for what you’re selling, they think of you. 

This kind of long-term inclination is very difficult to measure or connect to all its causes, never mind tracing it back to a specific piece of content. Even the most cunning attribution model falls flat when it tries to code “my cousin’s dog groomer’s friend read something online and texted my mother, who said I should try your product, but I ignored her suggestion until my best friend tried it too”.  

Measuring the short-term gain from content marketing is useful, but only to an extent. The only valid way to evaluate content ROI is against average lifetime customer value. 

Give yourself many chances to fail, by putting many opportunities to the test.  As long as you fail quickly, learn fast, and adapt, every step optimises the long term effectiveness and ROI of your content marketing.