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Content Marketing

How To Calculate ROI On Content Marketing

Caroline Grape

December 7, 2023

Is your content marketing strategy profitable? Effective?

Many marketers struggle to answer these deceptively simple questions.

That's because the link between content marketing (investment) and sales revenue and brand success (returns) isn't always a clear one.

Fortunately, there are several simple, straightforward ways to calculate Return on Investment (ROI) for content marketing.

Once you know the formulas, you'll have all the tools and confidence you need to make better decisions, demonstrate financial accountability, measure performance, and justify spending to stakeholders.

ROI: An essential content-marketing tool

Return on Investment (ROI) is a measure of the profit or "return" earned from an investment.

It's a simple but powerful formula that can help you understand which of your content marketing startegies is working and where to focus your efforts. For example, you can compare the ROI of different campaigns and verticals to see which ones offer the greatest returns. That's because ROI is always expressed as a percentage, making it easy to compare different strategies even if they used different resources and occurred at different times.

In fact, without ROI, it's pretty difficult to know what to prioritize. You could end up wasting precious time and resources on strategies that aren't super effective for your business—and all but ignore those that are.

ROI also gives you the tools to justify spending, successfully argue for an increase in budget, and report back to your company's leadership. At a time where many companies are hesitant to allocate large budgets on marketing, this couldn’t be more important.  Plus, it gives you a common language to collaborate with other departments, such as finance and sales.

For all these reasons and more, ROI is one of the simplest, most important formulas content marketers should know and use regularly.

How to calculate ROI for content marketing

Here, "Net Return" is equal to the current "value" of the investment minus the initial cost of investment.

The current value is just what you got back from your efforts. For content marketers, that usually means sales revenue or brand growth.

For example, if you spent $100 on a blog post and made $300 in sales revenue, then the Net Return would be:

Current Value - Initial Value = $30 - $10 = $20

This means we can also write ROI like this:

So, to calculate ROI, all you need is two numbers: the current value and the initial cost. How much did we spend and how much did we make? 

And that's it!

We'll look at what each of these means for content marketing below. There are several different ways to define "current value" and "initial costs", and you'll find that some are more "tangible" than others.

Before we continue, though, let’s look at a simple example to see how the formula works.

Calculating ROI: A (very) simple example

Let’s say you create a social media post for your business and it cost you (Cost of Investment):

Content creation and design: $200
Ad spend on the post: $100

Suppose the post performs as follows:

  • 500 likes
  • 100 shares
  • 50 comments
  • 200 clicks to your product page
  • 20 conversions (resulting in $1,000 in revenue)

Let's focus on the sales revenue for now: 20 conversions resulting in $1,000 revenue.

According to the formula above, we divide Net Return by Cost of Investment.

In this example, the ROI is approximately 233.33%.

This means that for every $1 we invested in the post (content creation and ad spend), we made a return of $2.33 in revenue. Awesome!

An ROI greater than 0% indicates a positive return, making the social media post a profitable investment.

Heads up! In this example, we looked at a single social media post.

Calculating ROI for individual pieces of content marketing can provide insight into which posts are most effective. However, be careful of reading too much into it. Marketing is complex and there are many different reasons a single post could do well.

Most of the time, you’ll want to calculate the ROI for an entire campaign, a vertical, or some other group of posts and assets.

The most valuable insights will usually come from the campaign level. We want to know which strategies are working best across a large number of posts.

Now that we've seen a simple example, let's take a closer look at how to calculate ROI on content marketing.

We'll start with all the different costs you may need to calculate.

Calculating your investment: Content marketing costs

The first step to calculating ROI is to calculate the total costs of creating and promoting your content. This includes expenses such as content creation, graphic design, advertising spend, and any other related costs.

Here are the most common costs associated with content marketing:

Figuring out all your costs is the most time-consuming part of this step.

You may need to speak to multiple stakeholders, such as HR, Operations, and Finance, and recruit the aid of your Chief Marketing Officer (CMO), Chief Operations Officer (COO), Chief Financial Officer (CFO), or Chief Executive Officer (CEO).

When calculating costs, there are two important things to keep in mind.

  1. First, you don't need to worry about being too precise. If you can track about 90% of your costs, you'll still have a good idea of ROI and can make informed, data-driven decisions.

    Your biggest costs will be in Production, then Distribution and Optimization, so you can focus on these.

    “Other costs” can be difficult to calculate, but in most businesses, they represent a very small portion of the overall costs and don't really differ much between campaigns. They're part of your "everyday" expenses. If you're just calculating ROI to compare strategies, you can probably leave them out.

    Ultimately, if you're not sure what to include, speak to your manager or department head. They can help you pick what will be most important and effective for you.
  2. Second, some of the costs may be expressed in dollars per hour, others in dollars per post.

    Simply do your best to collect all the costs associated with a campaign, and we can put them all together at the end.

    For example, if you paid a freelance writer $150 per LinkedIn Post and a graphic designer $65 per hour for 15 hours of work to create images for the posts, we just take the totals of each and add them together: 

    [$150 per post] x [10 posts] = $1,500
    [$65 per hour] x [15 hours] = $975
    ----------------------------------------
    [total costs] = $2,475

    If you're comparing time periods instead of campaigns (like Q1 vs Q2), simply add up all the costs for that period.

Now, it’s time to look at returns: what we get back from our investment. After that, we'll look at a detailed example of everything put together.

Calculating your return: Performance & sales metrics

There are a few different kinds of "returns" that a business might be interested in, but they all fall into two categories: monetary and non-monetary.

In terms of monetary returns, sales revenue is an important one. In fact, most of the time, your goal will be to calculate dollars earned on dollars spent.

But there are also less “tangible” outcomes, like brand awareness and customer loyalty. Even though they're not expressed in dollars, we can still use the ROI formula to compare these non-monetary returns. Plus, as we'll see below, they're super important for connecting a customer's actions to actual sales revenue.

Let's look at the different types of performance metrics there are.

Types of performance metrics

To understand returns on marketing assets, such as a blog article or social media post, you need to track its performance. Key metrics for doing this include:

  • Social media engagement. For example: how many users "liked", shared, or commented on your social media post. 
  • Click-through rates: For example: the number of clicks on emails, links, or call-to-action buttons.
  • SEO performance: For example: volume of organic search traffic, page visits, time on page, scroll-depth, keyword rankings, and backlinks
  • Lead generation: For example: form submissions, content downloads (eBooks, whitepapers, etc), newsletter sign-ups, and contact requests.
  • Conversions: For example: product purchases or sign-ups for a subscription or free trial.

(We look at which tools you can use to track each of these metrics at the end of this article.)

To calculate ROI, we need to link each customer action to sales revenue or some other business outcome we’re interested in.

To do this, we simply follow the customer journey and "chain together" different metrics until we reach our desired return.

This means that understand your customers' journey is essential to calculating ROI. The easiest and most common way of doing this is with "tracking URLs."

Link tracking and UTM tags

Link tracking refers to the process of tracking users’ online activity with special tags in the links they click known as “parameters.”

The most widely used tracking parameters for marketing are UTM tags. (UTM stands for “Urchin Tracking Module”, from back when Google Analytics was called “Urchin.”)

UTM tags provide a simple, standardized, effective way to understand how users land on a money-generating page. Plus, they work with Google Analytics out of the box. 

You can learn more about UTM links and tracking with Buffer’s Complete Guide to UTM Codes. Google also offers a URL Builder that makes it easy to generate these long and finicky URLs. 

Tracking users in this way makes it a lot easier to calculate ROI precisely.

If you aren't able to follow customers along their buying journey, though, you can still get a rough idea of ROI by looking at averages.

For example, if your blog post leads to 500 people signing up for your newsletter, and you know that, on average, 10% of newsletter subscribers buy a product, then you can assume that 50 (10% of 500) of the new subscribers will buy a product. A blog post that leads 1000 people to sign up for your newsletter would have a higher ROI than one that leads 500 to sign up. We'll see how this works in a detailed example below.

But if you can track exactly which subscribers actually made a purchase, your ROI will be more precise. Sometimes, the difference in performance between campaigns is small—but significant. So keep working on adding ways to track customer journeys.

Calculating monetary returns on investment: an example

As we mentioned above, there are two kinds of returns you can look at:

  1. Monetary. Typically come from sale of products.
  2. Non-monetary. Elements like brand perception and awareness. 

We’ll start by looking at monetary returns.

Suppose you create a series of social media posts promoting your new newsletter. You want to determine the ROI from the money you’ve spent on those campaigns. 

How can we do it? 

1. First, we need to calculate the cost. 

We’ll assume the following costs for our example:

  • Production: 10 social media posts at $65.00 per post (copy + graphic design) → $650.00.
  • Distribution: A scheduling tool that costs $35.00 per month; a newsletter tool that costs $25.00 per month → $60.00
  • Optimization: Google Analytics for tracking and some staff time →$180.00
  • Other costs: General overhead for the marketing department →$250.00.

This gives us a total cost of:

  • $650.00 + $25.00 + $35.00 + $180.00 + $250.00

    = $1,140.00
Heads up! In this example, we've made the assumption that the campaign took exactly one month to produce, since we've counted one month's worth of subscription fees.

But things aren't always so clean-cut. If you have monthly subscriptions you need to take into account, you have two options:

  1. Ignore 'em. That's right: if your subscription costs don't change from one month to another and your goal is to compare two or more campaigns, you can just leave them out. It won't make any difference in the final calculation, since they're the same for all campaigns.
  2. Calculate the costs based on how long the campaign took to set up. For example, if we spent six weeks working on this campaign, we would multiply the costs for our two subscriptions by 1.5 (6 weeks = 1.5 months). This is only necessary if (a) your subscription costs change between campaigns or (b) you're trying to figure out exact ROI for a single campaign, rather than comparing campaigns.

2. Next, we need to calculate the return. 

To do this, we’re going to think carefully about how customers went from (start) seeing a social media post to (end) actually purchasing a product from our website. 

For our example, it might look something like this:

  1. Customers see the social media post. Some of them click a link to sign up for the newsletter.
  2. A portion of newsletter subscribers click a link in the newsletter and land on a product page
  3. A few of those customers sign up for a free trial
  4. Some of those customers sign up for a monthly subscription

Phew! That’s quite the journey. There are some things we can track directly and others we might only measure indirectly. Let’s look at each step:

1. Customers see the social media post. Some of them click a link to sign up for the newsletter.

Marketing stars that we are, let's suppose we’ve cleverly added tracking parameters (see above) to the link in our social media post. When users sign up for a newsletter, we know they came from that post.

Of the users that click on the social media post and land on our newsletter sign-up page, a portion of them follow-through and actually sign up for the newsletter with their email. 

Heads up! Not all social media platforms make it simple to embed links. Instagram, for example, doesn’t allow links in post comments.

There are a few ways to get around this, none of them perfect. Link-in-bio tools, though, like linktr.ee, still allow you to track users who come from your social media profile. You could add a “Sign up to our newsletter” link, for example. For the duration of the campaign and the purposes of calculating ROI, we would assume that all sign-ups coming from that link were the result of the campaign. That may not be totally true... but it’s our best way to meaure ROI. 

For the purposes of our example, we’ll assume that 13,500 people see the social media post and 2800 of them click on the link to sign up for the newsletter [Metric 1].

2. A portion of newsletter subscribers click a link in the newsletter and land on a sign-up page.

Great! Some of our newsletter subscribers loved one of our newsletters and clicked a link in the newsletter. This leads them to a sign-up page for a free trial.

All newsletter platforms worth their salt come with link-tracking built in. We user Mailerlite.io (FYI, that’s an affiliate link: if you sign up, we’ll earn money. But we tried a number of platforms before settling on Mailerlite.io and feel it does a good job. It also comes with built-in support for UTM tracking, so it works well with Google Analytics and calculating ROI).

So we should have no trouble tracking how many subscribers click on the link to the product page. However, it may not be as clear how many of those subscribers signed up thanks to the social media post in Step #1.

Let's look at both scenarios: 

  1. You know which social media users from Step #1 clicked on the link.

    Some newsletter platforms (Mailerlite.io included) allow you to create any number of sign-up pages and then add users to specific groups based on that page.

    This makes it easy to track who’s signed up by clicking on the link in the social media post, because you can direct them to a specific sign-up page.

    We take the exact number of social media users from Step #1 for our calculation.

  2. You don’t know which social media users from Step #1 clicked on the link.

    If you’re not able to do this, though, that’s OK. Instead:

    We look at the average number of newsletter users who clicked on the product page, and assume the same proportion of users from Step #1 clicked on the link.

    For example: if 20% of newsletter subscribers clicked on the link in the newsletter, and 500 people signed up for the newsletter from the social media campaign, we assume that 100 of them (20% of 500) clicked on the link—even if it may be 97 or 105 in reality.

For the purpose of our example, we’ll assume it’s exactly 20% of social media users who signed up for the newsletter and clicked on the link. [Metric 2]

3. A few of those customers sign up for a free trial.

Wow, we’re good at this! The product page has convinced a few users to sign up for a free trial. 

You could either track customers using URL parameters (e.g. https://www.shoesforyou.com?origin=newsletter&campaign=summer_sale&content=banner) or with a unique product page that can only be reached via the link in the newsletter (e.g., https://www.shoesforyou.com/unique-product-newsletter-page).

Either way, we know how many newsletter subscribers sign up for a free trial. For our purposes, let’s assume it’s 10%. [Metric 3]

4. Some of those customers sign up for a monthly subscription.

Finally, we come to the end of our initial sales journey. Some of the people who signed up for a free trial have signed up for a paid subscription. 

Just like before, you may be able to track exactly which users from Steps #1 - #3, or you may only know the percentage of free trial members end up signing up for a subscription. Let’s assume it’s 5% either way. [Metric 4]

We’ll use one last figure in our calculation: the average lifetime value of a subscription member. Suppose your average subscriber stays on for 18 months, at a rate of $35.00 per month. This puts their lifetime value at $630.00. [Metric 5]

If your customer buys a product rather than a subscription, the value will be the cost of the product. 


Awesome! We know have all the information we need to calculate the ROI on our social media campaign. 

Here’s what it looks like:

Total cost:

  • $1990.00 (see above)

Total return:

  • 2800 social media users sign up for the newsletter
    20% of them (560) land on the product page
    10% of them (56) sign up for a free trial
    5% of them (2.8) buy a subscription...
    → ...with a lifetime value of $630 → 2.8 x $630

    = $1,764.00.

We’re getting close!

Now, we just plug these values into our ROI formula:

Congratulations! Our social media campaign represents a return on investment of 54.73%. That’s outstanding!

If the amount was negative, it would have meant we spent more than we made and we had a negative return on investment. We would either need to cut costs or improve conversions. 

These calculations also reveal another important benefit of doing ROI calculations: we now know there are several key areas where we can focus our efforts to improve the ROI. We can try to increase the number of:

  • Social media users that sign up for the newsletter. (Right now, it’s 8%: 2,800 from 35,000).
  • Newsletter subscribers that click on a link to a product page (from 20%). 
  • Page visitors who sign up for a free trial (from 10%).
  • Free trial users who become paid subscribers (from 5%).

Calculating non-monetary returns on investment: an example

Monetary returns are important, but there are other metrics you may want to consider. Brand awareness is an important one. 

There are many different ways to measure brand awareness. Some are very simple to calculate, like the number of social media followers you have, the total search volume for your brand name, or total brand mentions on social media. 

Others are more complicated to measure, but highly valuable. Share of Voice is a very interesting metric: it compares how often your brand is mentioned in relation to your industry or product versus how often other brands are mentioned in similar circumsntaces. 

Let’s look at Share of Voice. You can use tools like brand24 and brandwatch to get the metrics you need, including brand mentions (how often your brand is mentioned in press, coail media, or industry publications). We also need to look at competitor mentions

To obtain Share of Voice, we divide our brand mentions by the total mentions: ours and competitors. 

Pro Tip: Another way to calculate brand mention is in relation to a specific keyword, typically a product. So, Asana might calculate Share of Voice around the keyword “product management” and Google might calculate Share of Voice around “search engine”.

For the purposes of our example, we’ll assume the costs are the same as above: $1,140.00.  

Suppose the month before our campaign, our brand awareness tool shows us that our brand was mentioned 250 times over a month and our five main competitors are mentioned 820 times.

Our initial Share of Voice is:

  • 250 / (820 + 250)

    = 250 / 1070

    = 0.23 or 23%

And after our campaign, it’s mentioned 280 times, while our five main competitors are mentioned 1,890 times. 

Our new Share of Voice is:

  • 280 / (280 + 1890)

    = 280 / 2170

    = 0.13 or 13%

Yikes! It’s gone down. What does that mean for our ROI?

Let’s calculate it. Our ROI formula is:

In this case, our "net return" is expressed as a Share of Voice rather than a dollar amount. 

Here’s what it looks like: 

We have a negative ROI of 0.877%. Essentially, for every dollar we spent, our Share of Voice fell by 0.877%. That’s a bad outcome, so we would need to go back to the drawing board and figure out why our campaign failed. 

In this case, although our brand mentions actually did increase, the outcomes of all our competitors did so by more. Was it just one or two competitors? Did we miss out on an important event or opportunity? What did they do that we didn't? 

These are important questions, and they’ve only been raised because we took the time to quantify our efforts and costs. This is the power of ROI—even if it’s negative, it provides insight into where we’ve gone wrong, what we got right, and how to move forward. 

5 tools for tracking content marketing ROI

Attributing leads or conversions from various content marketing channels, including LinkedIn, social media, blog articles, and email campaigns, is crucial for tracking how effective your overall content marketing strategy is. 

Let’s look at some easy ways to track content marketing ROI.

1. Google Analytics

Use it to measure: Website traffic, time per page, audience segmentation, ad traffic, lead origins, and conversion rates 

Source: Agency Analytics

Google Analytics is a powerful tool for tracking website traffic, conversions, and user behavior. Set up goals, e-commerce tracking, and link tagging (aka UTM parameters — more on that later) to monitor the performance of your content.

You can also set up conversion tracking in Google Analytics (or similar conversion tracking tools).

How to do it:

1. Install the tracking code provided by your chosen analytics tool on your website. This code allows the tool to collect data on user interactions.

2. Set up goals: In Google Analytics, go to your Admin settings, then select the property where you want to set up goals.

3. Create a new goal: Click on "Goals" and then "New Goal." Choose a template that matches your conversion type, or select "Custom" to create a unique goal.

4. Configure goal details: Provide details for your conversion goal, including the goal name, the type of conversion (e.g., Destination, Duration, Pages/Screens per Session, Event), and other relevant settings.

5. Define goal conditions: Specify the conditions that trigger the conversion tracking. For example, if you want to track form submissions, set the destination page or event that indicates a successful form submission.

6. Verify and save: Test the goal to ensure it's tracking accurately. Once verified, save the goal.

Pro Tip: Create funnels.If your conversion involves a multi-step process, consider setting up a funnel to track users' progression through the steps leading to the final conversion.

2. UTM parameters

Use it to measure: Lead origins, conversion rates, email click-through rates, keyword performance

Use UTM parameters (Urchin Tracking Module) to tag links in your content, emails, and social media posts. This lets you monitor the source, medium, campaign, content, and keyword associated with each click and conversion in Google Analytics.

UTM parameters consist of key-value pairs and are typically added to the URL of a landing page or website link. They help answer questions like:

  • Which campaign or source drove the most traffic to a specific page?
  • Which social media platform is responsible for the most conversions?
  • Which email campaign led to the highest click-through rate?

Here's an example of a URL with UTM parameters:

https://www.example.com/page?utm_source=facebook&utm_medium=social&utm_campaign=summer_sale&utm_term=shoes&utm_content=cta_button

Pro Tip: URL Generators
Use a UTM URL generator like this one from Buffer or this one from Google.

3. Email marketing analytics

Use it to measure: Click-through, open, and conversion rates, and audience segmentation 

Email marketing platforms offer insights into open rates, click-through rates, and conversion rates. Track how content in emails drives engagement and conversions. 

Platforms like Mailchimp, Constant Contact, or HubSpot all offer built-in performance tracking and analytics features.

Source: Mailchimp

Pay attention to:

  • Open rates
  • Click-through rates
  • Engagement metrics
  • Performance over time
  • Audience segmentation
  • Conversion tracking

This can help you understand how well your content and call to actions (CTAs) perform, who resonates most with your content, and ultimately, how your email marketing impacts your content ROI.

4. Social media analytics

Use it to measure: Campaign performance, engagements, click-through rates, brand awareness and perception

Social media platforms provide metrics on engagement, shares, and click-through rates for content shared on these channels. Connect these metrics with website analytics to understand their impact on lead generation and conversions.

Social media analytics tools provide in-depth insights into how your social media content performs. By tracking metrics such as likes, shares, comments, and clicks, you can gauge user engagement. This engagement data is the foundation upon which you'll build your ROI calculations.

Many tools let you collect and track all of your social media data in one place, like Buffer and Hootsuite.

Source: Hootsuite

LinkedIn also has their own analytics page built in, so you can see how your business page is performing, track your post engagement, and check click-through rates.

5. Customer surveys and feedback

Use it to measure: Brand awareness and perception, engagement quality, brand trust and credibility, impact of content on purchasing decisions

Gather feedback from customers to understand how content influenced their decision-making process and satisfaction. This qualitative data complements quantitative analytics which can help you measure some of those more intangible sides of content marketing. 

It can help you identify customer pain points and challenges, maintain customer loyalty and satisfaction, ask customers directly how effective your content is, give insight to conversions, CLV, CAC, and customer segmentation. 

This information can help to fill gaps when reporting on your ROI and explain further your content strategy and goals. 

Some questions you could ask in your customer survey:

  • Did you discover our brand or products through our content (e.g., blog posts, videos, social media)?
  • Do you find our content relevant to your needs and interests?
  • Do you subscribe to our newsletters?
  • Did you find any of our social media posts or blog articles particularly helpful or interesting?

What’s next?

Now that you’ve calculated ROI on your multi-channel content marketing efforts, you can use this information to maximize your long-term ROI, report internally, and adjust your marketing strategy.

Benchmarking

Once you’ve calculated your ROI, yuu can compare it against industry benchmarks to evaluate your performance relative to competitors and identify areas for improvement. 

Use your KPIs defined earlier to select benchmarks that align with your priorities, industry, and goals. You can then identify any gaps that come up and adjust your strategy accordingly. 

For example, let's say you work for a software-as-a-service (SaaS) company specializing in project management tools. You discover that the industry average for SaaS companies is a 2% conversion rate on blog posts, while your blog posts have a 1.5% conversion rate. This indicates that there's room for improvement in converting blog readers into leads. To achieve this, you could implement strategies like more compelling call-to-actions (CTAs) or content upgrades on your blog posts.

Reporting

ROI and the data you collect to calculate it will help you justify your expenditure, successfully request additional budget, and engage with stakeholders. It provides you with the tools necessary to speak to leadership, especially those who are used to numbers and figures. 

Adjust your marketing strategy

Most importantly, ROI calculations allow you to understand where to focus and what actions to take. 

Let’s look at some ways to adjust your marketing strategy based on the information you’ve collected when calculating your ROI. 

Conclusion

Efectively calculating the ROI of content marketing is crucial for gauging the success of your marketing efforts, optimizing resource allocation, and making informed, data-driven decisions.

By understanding both tangible and intangible returns, and utilizing various tracking and analytical tools, marketers can not only justify their expenditures but also continuously refine their strategies for long-term success.

This approach ensures that every content marketing effort contributes positively to both immediate financial goals and brand objectives. 

Need help with your content marketing strategy? Drop us a line. We’d love to help.

Hero image source: Markus Winkler

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