Content marketing formula 2016

MARKETING INSIDER GROUP
The Content Formula
Calculate the ROI of Content Marketing & Never Waste Money Again

MARKETING INSIDER GROUPWhat is the ROI?

What is the ROI?
Let’s Talk About
Banners?
The 1st Banner (1994):
44% Click Thru Rate!

WARNING!
Math ahead!

Less likely
to click on a
banner than…

“We need to stop interrupting what
people are interested in and give people
what they are interested in.
”

Ann Handley: Take your brand out of the story and
make your customers the hero.”
Content
Marketing
What
Brands
Publish
What
Customers
Want
Business Instinct CharityEmpathy

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.
“
”

PART ONE
/ Build The
Business Case
BUILD THE BUSINESS CASE FIND THE BUDGET MEASURE RESULTS
1

Marketing should be tied to
a business case that sales and
executives can understand.

Reach early
stage buyers
Engage new buyers
with your brand
Conversions you would
have never reached
= $
BUILD THE BUSINESS CASE

Early-stage Searches
Middle-stage
Brand Searches
Search/SocialVolume
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?
(1)
How Much Early-Stage Search Traffic Comes To Your
Website?

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

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?

Do You Rank In Position 1-3 for Your
Product Category?

IMAGINE: YOU OWN THE CATEGORY
www.makeup.com -- (owned by L’Oreal)

IMAGINE: YOU OWN THE TARGET AUDIENCE
www.CMO.com -- owned by Adobe

IMAGINE: YOU ARE A TOP SOURCE IN YOUR INDUSTRY
www.health.clevelandclinic.org -- Top source for healthcare information w/ +2M visitors per month

IMAGINE: MARKETING THAT ATTRACTS NEW
BUYERSAMEXOPEN Forum is the largest source of new leads for AMEX’s Small Business Division

PART TWO
/ Find The
Budget
2

Content
Used
30%
Content
Not
Used
70%
60% -70% of Content Goes Completely Unused*
$100 Billion Opportunity**
**Source: Econsultancy
* Source: Sirius Decisions
= $

How much your
organization is
wasting on
unused content
Amount that
gets used
Current content
production costs
Calculate The Cost of Unused Content

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

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)
Reallocate Budget From Low Performing
Marketing Programs (Advertising?)

Run CRM ROI Report. Rank Low to High
=$

CASE STUDY: ADVERTISING PARTNERSHIP FUNDED
SAP CONTENT MARKETING

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 Visitors
10,000 Subscribers
1,000 Leads

We shifted investment
from advertising to content
marketing so we could
shout louder than we spend.
Beth Comstock
CMO, GE
”
“

PART
THREE
/ Measure
Results
3

Content Marketing ROI is 4X our
traditional marketing spend.
”
“
Julie Fleischer
Former Sr. Director, Kraft Foods

Paid vs. Organic Search Traffic
REACH
Organic Search Share of Voice
Unbranded Search Traffic
LEADS
CONVERT
OTHER CONVERSIONS
SUBSCRIBERS
Time on Site
ENGAGE
Social shares
Subscriptions
Bounce rate
Retention Rate
Upsells
RETAIN
CONTENT MARKETING ROI

CONTENT MARKETING ROI - REACH
TheValue of Organic Search =
(Paid Search Budget X Organic SearchTraffic) / Paid SearchTraffic
TheValue of Unbranded SearchTraffic =
(Paid Search Budget X Unbranded SearchTraffic) / Paid Search
Traffic
TheValue of Achieving Digital “Fair Share” =
(Online Share of Organic Search / Market Share) X 100

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

Organic search traffic can be
calculated easily via Google Analytics:
1 Go to Acquisition
2 Campaigns
3 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
TheValue of RepeatVisitors =
(OnlineAd Budget / AdTraffic) * RepeatVisitors
TheValue of Subscribers=
(Sales from Email Nurture) / # Subscribers

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 return
to 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 to
look 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 drive
new visitors.
If 80%, or 3,200 visitors are net new, you’re spending an average of $1.56 per
visitor.
$5,000 / 3,200 = $1.56
Taking that finding, we can then calculate the value of our 800 repeat visitors.
800 * $1.56 = $1,250
Therefore, 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
TheValue of Content Marketing Leads =
(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 %

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
TheValue of Retention=
Content Customers / Subscribers LTV vs. LTV Customers Who
Don’t Read / Subscribe
Content Customer Retention Rate vs. Non-ContentCustomers
Revenue per Content Customer vs. Non-ContentCustomers

Thank you!
Michael Brenner
CEO, Marketing Insider Group
@BrennerMichael
Liz Bedor
Brand Strategist, NewsCred
@lizbedor

APPENDIX
Michael Brenner
CEO, Marketing Insider Group
@BrennerMichael
Liz Bedor
Brand Strategist, NewsCred
@lizbedor

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

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
YOU

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 CTR
1 31.24
2 14.04
3 9.85
4 6.97
5 5.5
6 3.73
7 0
8 0
9 0
10 0
Source: Moz, Google Organic Click-Through Rates in 2014.
Now that you have your rankings, calculate your
share of voice for each keyword using the chart to
the left.
DANCE SHOES 1 2 3
DANCING SHOES 2 3 4
CHEAP DANCE SHOES 2
AFFORDABLE DANCE
SHOES
5
BALLET SHOES

2014 GOOGLE CLICK
THROUGH RATES
POSITION CTR
1 31.24
2 14.04
3 9.85
4 6.97
5 5.5
6 3.73
7 0
8 0
9 0
10 0
Source: Moz, Google Organic Click-Through Rates in 2014.
Now that you have your rankings, calculate your
share of voice for each keyword using the chart to
the left.
DANCE SHOES 31.24 14.04 9.85
DANCING SHOES 14.04 9.85 6.97
CHEAP DANCE SHOES 14.04
AFFORDABLE 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

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
COST

NEGATIV
E
RETURNS
!
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
COST

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
and
decided that your maximum allowable
CPA for a new email address is $1.50.
MAXIMUM
ALLOWABLE
COST
$1.50
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 methods
costing $1.50 or less.

METHOD QUANTITY OF
SUBSCRIBERS (QOS)
COST PER
ACQUISITION (CPA)
UNSUBSCRIBE
RATE (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)
UNSUBSCRIBE
RATE (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
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
(QOS)
COST PER
ACQUISITION
(CPA)
UNSUBSCRIBE
RATE
(UR)
AVERAGE
SALE VALUE
(ASV)
TOTAL
VALUE
(TV)
VALUE PER
SUBSCRIBER
(VPS)
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

METHOD QUANTITY OF
SUBSCRIBERS
(QOS)
COST PER
ACQUISITION
(CPA)
UNSUBSCRIBE
RATE
(UR)
AVERAGE
SALE VALUE
(ASV)
TOTAL
VALUE
(TV)
VALUE PER
SUBSCRIBER
(VPS)
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 methods
return the most value per subscriber.

METHOD QUANTITY OF
SUBSCRIBERS
(QOS)
COST PER
ACQUISITION
(CPA)
UNSUBSCRIBE
RATE
(UR)
AVERAGE
SALE VALUE
(ASV)
TOTAL
VALUE
(TV)
VALUE PER
SUBSCRIBER
(VPS)
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 methods
return 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.

SOCIAL SHARES + FOLLOWERS

While social shares can be seen as an
engagement 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.

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,

PERCENTAGE OF LEADS FROM CONTENT MARKETING

Looking at this gathered data, we see that content marketing accounts for 205 of
the
total 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
the
total 710 marketing qualified leads.
To find the percentage, we take 205/710 to find that content marketing accounts
for 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
EMAIL
PUBLIC RELATIONS

CONVERSIONS

PROGRAM MQLs
CONVERSION
RATE
AVERAGE SALES
VALUE
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.

PROGRAM MQLs
CONVERSION
RATE
AVERAGE SALES
VALUE
Content 205 50% $500
• To find our total conversions, we need to multiply our total qualified leads by 50%.

PROGRAM MQLs
CONVERSION
RATE
AVERAGE SALES
VALUE
CONVERSIONS
Content 205 50% $500 102.5
• 205 * 50% = 102.5 conversions

PROGRAM MQLs
CONVERSION
RATE
AVERAGE SALES
VALUE
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

PROGRAM MQLs
CONVERSION
RATE
AVERAGE SALES
VALUE
CONVERSIONS
TOTAL CONVERSION
VALUE
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

More Details
http://earningsmoney.com

Content marketing formula 2016

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