Especially when you’re experiencing a time of growth and change in your business, evaluating your efforts matters. Knowing how to calculate ROI (return on investment) helps you know whether or not your marketing efforts are successful.
When you learn how to calculate ROI, you’re able to effectively evaluate your marketing efforts. That way, you can make strategic changes, delegate or outsource, and plan ahead.
It’s okay if the idea of calculating your ROI feels overwhelming. You’re not alone! But it is likely much easier than you think.
What Is Content Marketing ROI?
For content marketing, ROI (return on investment) is basically a percentage showing how much revenue was generated by a specific marketing campaign—in comparison to what that initiative cost. It lets you know how much money you earned vs spent so that you can see whether that content marketing strategy was effective.
Learning how to calculate ROI is really important. ROI is directly related to your revenue, which means it’s a crucial piece of knowing the true value of your current strategy.
Of course, ROI isn’t the only piece of information or data you should consider when it comes to content marketing. Engagement, shares, views, and more also matter! But ROI should definitely be included in your list of metrics to review.
Most of us have no idea how to calculate ROI for content marketing…but luckily, it’s actually pretty simple!
How To Calculate ROI For Your Content Marketing In 4 Steps
Let’s dive in and figure out how to calculate ROI! There are four key steps you’ll need to take in order to use this key metric for your content marketing.
Figure Out How Much Creating A Piece Of Content Costs
First, you’ll need to figure out how much money you actually spent in order to create a piece of content.
Whether you’re creating content yourself or outsourcing content creation to a marketing agency, there’s a cost attached! Of course, outsourcing comes at a price…but doing things yourself takes valuable time, skills, and sometimes even money for equipment or tools.
You’ll also want to consider assets that were essential to that content marketing piece, like images, videos, and audio. If you paid for them, factor them into the cost!
Figure Out The Cost Of Distributing That Content
Once you know how much money it costs to create a content piece, you need to know how much it costs to promote it. Creating the content is just the beginning—obviously, you want people to see it and interact with it!
How do you figure out how much it costs to promote your content? Make sure to include things like Google Ads and social media advertising, email marketing providers, and any other tools or software that you used. And of course, if you’re outsourcing, be sure to consider those costs, too.
Now that you know how much generating and promoting your content costs, you have part one of the formula you’ll need when learning how to calculate ROI!
Related: The Lifecycle of Your Blog Post
Calculate How Much Money You Generated From That Piece Of Content
Now it’s time to figure out how much revenue you generated with this piece of content marketing. Content marketing is about more than just generating sales. But for ROI, we’re just looking at how much revenue you received from that piece of content.
One of the best tricks to know when learning how to calculate ROI is using UTM links to track conversions from specific pieces of content. With UTM links, you can track exactly what pieces of content are converting well and use those to implement a more effective content marketing strategy long-term.
Direct ROI Vs. Indirect ROI
Did you know that there are actually two types of ROI? Yup! It’s important to know about both direct and indirect ROI in order to effectively measure what matters for YOUR business.
With direct ROI, we’re measuring things like conversions, sales, or downloads. Direct ROI is easy and straightforward to track.
But with indirect ROI, we’re measuring things like number of inquiries, brand awareness, and other intangible metric types. These are a little trickier (sometimes even impossible) to measure, but they’re also important in helping you grow your business. So make sure you’re taking those things into consideration, too!
Related: A Guide to Tracking Your Marketing Conversions
Do The Math!
Once you know the cost and revenue generated for a piece of content, you have everything you’ll need for figuring out how to calculate ROI!
Here’s the super simple ROI formula:
- Take the revenue you’ve generated and subtract your costs
- Divide that number by the costs
- Convert that number into a percentage
Let’s look at an example so that it’s easier to understand! So let’s say that you spent $250 creating a piece of content and received $3,000 of revenue from that piece of content. Your ROI would be 1100%!
Knowing how to calculate ROI lets you gauge the effectiveness of your marketing efforts. On a basic level, just know that spending less than what you generate in sales is a win.
Review Your Results
Depending on how your ROI is looking, it’s time to adjust your strategy. One of the main reasons we learn how to calculate ROI is so that we can know what’s working and where we need to improve.
When you’re calculating metrics like ROI, it’s so important to know what factors are driving (or inhibiting) your conversions.
And one of the most important areas to focus on in improving ROI is your CTAs (calls to action). Including multiple effective CTAs (and including them in the right places) is key to boosting ROI.
Once You Know How To Calculate ROI, How Do You Strategize Your Content Marketing?
Once you know how to calculate ROI, it’s important to use that information to make strategic marketing decisions.
You’ll also want to tailor the metrics you track to the content you’re working on and your long-term goals. Before you even consider calculating ROI, you need to plan ahead based on specific goals and track particular metrics that align with those goals.
Think about the potential your content has to generate revenue. Will it drive engagement, show up in search results, and prompt action? All of these factors matter in boosting your ROI.
Just remember: ROI isn’t the end-all-be-all of marketing metrics. But, for some pieces of your content marketing (like paid ads), knowing how to calculate ROI is super important and helpful.
And now that you know how to calculate ROI for your content marketing, you can start evaluating your marketing and learning exactly what you need to focus on.
Remember, you don’t have to handle your marketing on your own—I’m here to help you! Let’s talk about how I can support your business in all of its marketing needs.
