Content Marketing’s ROI

Your boss wants to know: what's the ROI of content marketing vs. PPC? Read on.

Your boss wants to know: what’s the ROI of content marketing vs. PPC? Read on.

What is the return on investment of content marketing versus pay per click?

To compare the relative values of PPC and content marketing, begin with cost, a factor that’s inherently variable regardless of your marketing approach.

For content marketing, costs depend on the size of your organization, the volume of content being produced and the source of that content. Production can happen entirely in-house, it can be outsourced, or it can be handled through a combination of the two approaches.

The cost of a Pay Per Click (PPC) campaign, depends, of course, on the cost per click, and some keywords are exponentially more expensive than others.

A study published by Kapost and Eloqua, two companies involved in content management and marketing automation respectively, uses $4.22 as the average cost per click and posits that a mid-sized organization would spend $425,376, including management expenses, over 24 months, to yield 100,800 clicks. Each lead, then, costs $108.

The results don’t vary much over time. Unless the campaign itself changes, the number of clicks generated in the first month will be much the same as the number generated in the 24th month, and the same expenses will likewise continue, with the PPC campaign naturally requiring continued investment. The campaign generates clicks from the start, and it continues at a steady pace and at the steady price of $108 per lead.

On the content side of the ledger, the numbers are quite different. Kapost and Eloqua expect that same mid-sized company to spend almost $12,000 per month on its content marketing operation. Again, this is a recurring cost, as new content is created on a regular basis, this time totaling $312,560 over two years.

At first, the choice to invest in content looks like the kind of mistake that ends careers, if not companies, because the impact is not immediate. In the first month, our mid-sized company seems to be paying thousands of dollars for each lead.

But something else is happening. Traffic is growing, attracted by quality content, and the best part is that it’s quality traffic. With the right content and a commitment to build on that content, word spreads, and a growing audience of prospective customers becomes increasingly engaged. This is true for B2C sites, which tend to have the largest audiences, as well as for their B2B counterparts, where audiences may be smaller, but quality is even higher.

In our example, using a 2 percent conversion rate – again, half the 4 percent rate applied to PPC – increased traffic has generated 4,172 leads in 24 months. The cost per lead is $75, 31 percent less than the PPC equivalent, and it has fallen some 80 percent since its scary start.

Over time, then, content marketing is significantly more cost effective than PPC, but the “over time” part of the equation is crucial. Content marketing takes time to get rolling, especially if you’re starting from scratch. It requires commitment to the longer view and a willingness to persist when results take time. It calls for patience.

Those qualities are sometimes in short supply, so a commitment to content can require a conscious willingness to downplay the importance of immediate results. That has to be accompanied by a change in marketing perspective.

Marketers are most at home in the world of the marketing campaign, the business of buying time and space from existing media and running your marketing program for a discrete period of time. Campaigns have their advantages. They’re easier to evaluate. Results can be measured, and you can alter your campaign in response to what you’ve learned. In essence, you’re renting an audience from someone who already has that audience available, and you’re relying on that “someone” to provide the content that keeps the audience around.

When you venture into content marketing, things change:

• You’re in control, creating the content instead of depending on someone else.

• You’re taking ownership of the audience, not renting it.

• Your content, once up, lives on, and it continues to function as effective marketing.

• Your traffic is organic, the best possible audience and the one most likely to generate quality leads no matter what business you’re in.

Are there issues to consider? Yes, just as there are issues to consider with any marketing approach. There’s the fact that content will not, as a general rule, provide instant payback. There’s the issue of quality. Higher quality yields better results, but quality can’t always be judged until your content meets the real world. And there’s the question of volume. Posting more content more often can get results that are much better than what would be expected because of greater volume alone.

Increasing the content flow, however, takes real commitment to the process, a commitment that includes devoting adequate company resources in support of content production, not always an easy sell when there’s pressure for speedy results.

But no marketing approach is perfect. Quality content helps people to find you, to engage with you, to trust you, to share what you have to say with others, to like you and to “like” you – and to come back for more. If any of that matters, content is the name of the game.

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