Putting a valuation on marketing is something we’ve struggled with for decades, and will probably continue to struggle with for a while. The obstacles in the way of easy valuation of content include having clear goals for your content, the use of business metrics, and the technology to connect content to the opportunities affected.
First Things First…
Let’s begin by debunking the current ways that businesses try to prove value for content marketing. Many companies use ROI as a marketing metric. This is not a good metric for content marketing because it only tracks the financial return on an investment, and 99% of the time there is no direct financial return with content. This is because content isn’t tied to revenue, and there are many pieces of content engaged with before revenue comes in the door. Not to mention the fact that measuring content ROI will not help you make better content in the future, nor will it prove your value to the company. It will only show how well you spent money. This locks the business into thinking that marketing just spends money, rather than provides value.
If not ROI, Then What?
Most people think they will show value by tracking the influence of content on deals. Tracking how influential content is to a person during the buying cycle will show its value and show how marketing is influencing deals. This will typically look at the last campaign touched before an opportunity is created. This type of measurement is way too subjective to even be considered accurate. It cannot take into account outside factors such as word of mouth, and completely discounts a holistic marketing model in favor of a silver-bullet marketing model. Influence reporting also doesn’t show any true business value to your company. It assumes that if you can figure out what is influential and do more of that, then your ROI will increase, which we have already stated does not show your business value.
So if not ROI or influence, what should we look at?
If you are looking for ways to prove value and ways to improve your content, you should look at three core areas of reporting: engagement, velocity/efficiency, and overall lifetime value.
When tracking engagement, you should look at metrics that give you actionable numbers. How many eyeballs did your content get? This will tell you whether or not your promotional strategy did its job. Secondly, you need to measure actual engagement — how many people saw your content AND engaged with it? This will tell you if your copy and content resonated. Finally, you need to measure against your goal. What percentage of people took the next action that you were driving them toward? This will tell you how powerful your call to action was. All of these metrics are actionable. These metrics should be the first thing you look at in order to show the business value of your engagement campaigns.
Use Real Business Goals to Determine Success
To show business value with content marketing, you need to look at your business goals. ROI is not a business goal; however, increasing the number of revenue cycles is. If you can show that you decreased the length of the sales cycle by 10%, that is a massive business driver. This is only traceable when you are measuring the sales cycle and the stages within the sales cycle, which means you’ll need technology. Marketing automation and a CRM are the most common combination used to accomplish this. This combo will allow you track each stage in your marketing funnel and the speed at which a lead moves through the funnel. This is a velocity measurement. Showing you can increase the sales cycle by x% tells your CEO that he can generate more money each year. This is predictable revenue — it allows for strategic business planning and shows real business value.
In addition to velocity, you should also measure efficiency; i.e. how many people start at the top of the funnel compared to how many come out the bottom. By measuring this as well as your velocity, you’ll also learn how to be more efficient. Remember: currently, best-in-class companies only have a 1.6% efficiency for the entire marketing funnel, which means that for every 100 leads they generate, only 1.6 turn into a closed deal. The more efficient you are, the better the leads you’re bringing in and the better your content becomes at moving them through the funnel.
Overall Lifetime Value
Finally, when looking to evaluate your content, you have to consider the fact that the cost of content marketing is much higher than any other form of marketing from previous generations. Our teams have to be bigger, we have to spend more money on technology, and the cost of reaching a consumer is also much more expensive. The cost of generating a deal is much higher than it was before. This means it may take us longer as a business to recoup that money, which in turn means that the longer we have them as a client, the more profit we can extract and the higher the return on our efforts will be. This is why we need to look at the Lifetime Customer Value (LTV) as a marketing metric. IF we are bringing in better deals (and more efficiently), and they are staying around longer, we are providing true business value.
The easiest way to track this is using churn rates. The hard part about making this a marketing measure is that it is more dependent on the product, customer service, and overall business experience. This is where content marketing can take on a bigger role. It is no longer content for content’s sake, but content for experience’s sake. The better a person’s experience, the longer they will stay a client and the higher their LTV. Focus on delivering the best experiences possible with your content, which means providing the most relevant content wherever the person/account is in their lifecycle with your company.
If you can look at your content marketing in these ways, you’ll be able to prove the real value of your content marketing efforts and have actionable metrics that will help you evaluate your marketing moving forward. This does require that you have the correct tools to track engagement and tie that engagement to opportunities. It also assumes you can get your boss to stop demanding ROI metrics.
All of this takes time and work, so good luck and always keep moving toward metrics that are actionable and support your business goals.