To this day, content marketing is one of the most important tools of online marketing. Questioning whether the effort made for content marketing, the investments in online content, and optimization of the latter are economically sensible and have positive effects is therefore as pertinent as ever.
Content marketing controlling answers these questions, also giving special consideration to rankings of online content and treating them as important grounds on which to make economic statements.
For many companies, content marketing is a sustainable, perhaps even the only, way of establishing oneself as an authority of online marketing. However, they often lack an overall assessment of content activities, even though this is needed in order to
content marketing – and that means managing it. Content marketing controlling takes care of these three tasks by
This much is certain: The bigger the role that content marketing plays for your online marketing, the more the importance of content marketing controlling grows.
The fact that content marketing is regarded as an investment from an economic point of view makes the long-term management of content marketing activities all the more challenging: Content you create today will have an impact not only in the course of the current year. In many cases, it also influences the years to come – which, of course, is wished for. This is why the evaluation of content when making investment decisions should also take future ratings and influence into consideration.
After all, content marketing controlling is also relevant and helpful because successful online content is an asset that can certainly play a role in a company valuation. However, only well documented and optimized content will probably be considered a positive asset. The sooner you start using content marketing controlling, the easier it will be to evaluate the existing content later on.
Content marketing controlling starts by planning and setting certain goals. Various aspects can be discussed as goals of content marketing controlling. Among them are:
When examining whether goals are attained, the won influence or rather visits generated by content, can be used in different ways. Visits are certainly most obvious as target figures when discussing lead and customer acquisition. Their success can be directly associated with individual articles or newsletters as well. In an indirect way, content can however also contribute to branding and establishing customer loyalty. Here, direct accesses and social media interactions can be measured and attributed to individual content elements.
Besides counting generated visits, their evaluation is an important task when examining goal attainment. There are two possibilities of evaluation: On the one hand, you can take market price of the visits as a basis. On the other hand, you can estimate the achieved online contact by assessing the revenue you generate with help of that content.
To assess market price, CPC prices of Google’s keyword planner can be used as reference. Since SEO and SEM are substitutes, the price of clicking on an AdWords advert is also a good indicator of the value of a click on a link on a website that has undergone SEO.
For yield valuation, however, the revenue that is generated by a transaction initiated by content is put aside when evaluating the contact at question:
Impressions x Click Through Rate x Conversion Rate x Profit Margin I
This reflects the gross proceeds with no expense for content marketing and optimization. If these gross proceeds are higher than the expense for creating the content, this means that your content marketing results in positive value creation.
To pin-point the success of your content marketing, the expense has to be measured as well as goal attainment and its evaluation. How you handle this largely depends on the organization of your content marketing. If you buy content from outside, you have a predictable basis on which to estimate your expenses. The same goes for content optimization. Whereas if you create and optimize content in-house, you have to calculate your expense with the dues created and defined by analytics in the course of content creation and optimization. The more diligent you do this, the more efficiently you can control your content marketing.
For the operationalization of content controlling, it certainly makes sense to determine general expense margins for articles. This can also happen in the course of target costing by setting a cost limit for content. The following expense items should be considered when calculating the expense of the content:
An interesting exemplary calculation for content marketing of a B2B project suggests average content costs of 625 Euros for each month and each article. However, this figure is certainly very individual and greatly depends on the demands and facilities of a company.
The next step deals with calculating the ROI of content marketing activities. A simple formula helps to begin with:
ROI = Revenue / Expense
Suppose an article generates 500 visits a month that are valued at a market price of 1€ each, while expense for this content is 625€ each month, that means the ROI is:
ROI = 500 € / 625 € = 80 %.
If you calculate the ROI with some income figures higher than industry average, you can approximately create the following ROI calculation:
Revenue = 500 x Conversion Rate x Profit Margin I = 500 x 0,04 x 30€ = 600€.
This results in a higher ROI than in example 1: ROI = 600 € / 625€ = 96%
Still, this figure remains unsatisfactory, since content does not cover the costs in this example, neither when using market price nor when evaluating revenues. Does this mean that content marketing is uneconomic?
You surely have noticed that these examples leave out one crucial aspect of content marketing: content marketing is sustainable! That means that personally created content usually generates visits not just during one short time period, but over the course of months or even years. To calculate success, you do not only have to use general expense as a basis, but a figure proportionate to time. This figure has to determine the content’s actuality, the resulting loss in value, and also the sustainability of optimization. Of course, these are very complex and difficult things to determine, which implies that while calculating a content’s duration, you should be guided by intermediate-term empirical figures. These are hugely influenced by a topic’s actuality: While the duration of content on fashion subjects will most likely be rather short, certain health advice subjects will for example last longer. However, seasonal aspects have to be taken into consideration as well. If, for instance, content is only relevant in winter, the expected duration has to be divided by four since this content will only be relevant one out of four seasons.
If, in another example, we expect our content to have a duration of 3 years, 36 months accordingly, regardless of season, the success calculation of our example using market price evaluation of visits changes significantly. The proportionate monthly expense is distinctly reduced, and therefore the content ROI increases considerably:
ROI = 500 € / (625 €/36) = 500 € / 17,6 € = 2.835 %!
Before inciting a(nother) gold rush of content marketing, it should be pointed out that next to successful content, there are also unsuccessful ones. These are marked by not gaining high rankings in search engines and therefore creating much fewer visits. Therefore, successful content has to carry unsuccessful content: The winner has to pay for all the losers.
In order to control content marketing, success calculation and therefore determining the individual content’s ROI is essential. Depending on the range of content activities, it may make sense to control content on an individual level or to gather content in groups and to calculate their success on an aggregated level. In general, one question has to be diligently answered: In which content types and subjects should the company invest and which content types should not be further expanded? In principle, what counts is to identify and expand content with a long duration, stable and high rankings, and many visits.
When creating and expanding content, the intertemporal aspect of content marketing is crucial as well. Creation, purchase, and optimization of content is a matter of investing. Here, not only current revenues but also future proceeds are held against all expenses paid. The process of determining the advantages of investing in content is similar to calculating its success. However, when calculating investments in content marketing, future revenues have to be discounted in the present. This can be achieved by a net present value calculation that presents the present value of content as a total of its future cash values:
Net Present Value of Content= t=0nRevenue(1+i)t-Expense
In this formula, t represents the period, n represents the content’s duration, and i is a discounting interest rate that is orientated towards the company’s revenues. The longer the duration is, the lower the net value of future content revenues gets. Since content on current events has an especially short duration while advice articles are more persistent, this method of calculating the net present value is all the more important the less contemporary content is.
This net present value is also relevant when content needs to be evaluated. Especially when dealing with company sales, content is an asset that provides significant value for company evaluation. If a website has high rankings, content is frequently the basis of any online business and can therefore be taken into consideration for evaluation. This is mostly relevant if a company valuation is conducted as an asset deal, meaning not all of the company is sold, but only individual sectors.
Content marketing controlling and content evaluation create demanding evaluation and estimation tasks for any online marketer. However, you should not shy away from the work they require. Only targeted content investments whose concrete success is continually examined and evaluated can count as successful in the long run and can therefore be taken as a basis for further content strategies.
Published on 11/04/2016 by Dominik Große Holtforth.
Prof. Dr. Dominik Große Holtforth teaches business studies and media management at Fresenius University of Applied Sciences in Cologne. He is also head of the e-Commerce department which deals with strategy-related questions, the controlling of key performance indicators as well as competition strategies in online marketing and e-Commerce. Prof. Große Holtforth is co-founder of the e-Commerce agency Warenkorb.com and founder of the online plant shop “Meine Orangerie.” This is how he combines scientific expertise and practical experience.