Despite many articles recommending methods to determine content ROI, this continues to be a hot and confusing topic for many B2B marketers. Why is this?
There are different purposes and uses for ROI. Content performance, at an asset or campaign level, is typically the way marketers think of content ROI. While difficult to measure, marketers need performance measures to tweak execution. But don’t confuse performance with ROI.
To make a business case at the executive level, asset and campaign performance measures are not useful. They are too tactical. They doesn’t align with executive business criteria, or inform the kinds of decisions they make. Because they don’t show what’s possible, they miss the strategic importance and and impact on top business objectives.
Marketers think with a traditional expense justification mindset rather than an investment mindset. We’ve written here about the misunderstanding between investment and expense.
A Content ROI Investment Model
An investment mindset for B2B content impacts three business categories:
- Business strategy
- Business operations
- Content operations.
Background and context for this conversation are the new realities associated with self-educating, B2B buyers, and their preferred buying decision process. Belief in this, and the role of content, is the foundational premise for what follows. Are you assuming everyone “gets it”?
These new realities have made content a strategic imperative of the business. Content is a primary driver of top business objectives and outcomes:
- New customer acquisition and organic revenue growth
- Sales and marketing productivity and efficiency — lower selling costs
- Acquire data on customers, buyers and other audiences for data driven decisions
- Deliver a consistent, exceptional customer experience.
This should be the primary context for your ROI conversation.
There is still a significant need for education about how content impacts each of the four top business objectives. At the executive level, the rhetoric has been heard, but often not baked into business strategy and plans. Few executives have first-hand experience with digital content tactics. Few B2B organizations have a business level content strategy. This is both the challenge and opportunity for marketing leaders.
In these areas, the risk to business strategy can be under-investing in high leverage assets, such as content.
Here are questions and metrics that can help you reframe your ROI case in this strategic context.
- New customer acquisition and organic revenue growth– By how many did you miss new customer targets last year?
– What “must win” deals were lost?
– By how much were revenue growth targets missed?
– What are the risks this condition will perpetuate, or get worse if economic or competitive conditions tighten?
– What was the “cost” of not acquiring that new business?
– Identify content gaps that could help alleviate that situation. (See blog Define Your Use Case Requirements).
– What percent of that “cost” would be required as an investment to address content gaps?
- Sales and marketing productivity and efficiency, and lower selling costs
– What is the difference between the revenue, margins and cost associated with your top “A” sales people, compared with “the herd of B” players?
– To increase new customer acquisition and revenue, what will be the incremental investments made through a “sales first” vs. content marketing approach?This is a significant investment number. Content can make a significant impact for a comparatively low investment.This doesn’t occur today because executives think of content as a disposable expense, not as an investment in long-life assets. Make the case for content as an enabler, if not an equalizer, improving return on sales investments. This number will dwarf any tactical content performance measure you care to make.Link your digital content and initiatives to significant, traditional marketing investments such as advertising, events and paid search. Show how content leverages and extends those investments by expanding and extending connections, conversations and insights delivered through those (expensive) channels.
- Acquire data on customers, buyers and other audiences for data driven decisions
– How do you show the impact of more/better data about customers, buyers, influencers and other key audience types?
– What is the value of data-driven decisions that better inform and target sales, marketing and content investments?
Digital content is essential to data acquisition.
- Deliver a consistent, exceptional customer experience
– What are the customer experience objectives and associated metrics?
– How is content currently related to meeting those objectives?
– Are those content investments similar to those in other functional groups (marketing and sales), such that they could be shared and leveraged cross-functionally?
The opportunity cost and other risks associated with missing these strategic objectives, when associated with “the job” content can perform in achieving them, is a strong start.
Investment in content is small compared with the cost of not meeting these high visibility, strategic objectives.
Business operations is another strong area for content ROI. The premise is, content marketing can perform some essential activities better and at significantly lower cost than sales methods.
One objective is to free expensive sales people to focus on more, better qualified opportunities. Sales resources excel at one-on-one custom conversations. The sales approach doesn’t scale well.
By improving sales productivity per rep, organizations have the option to use fewer reps to meet new customer and revenue numbers. This lowers sales investment and risk.
Assess and build metrics for the cost of sales vs. content marketing resources to key activities:
- Percent of time sales spends prospecting vs. working qualified active opportunities. Apply the percentage to total sales payroll costs (excluding commissions) to identify a current cost.
- Percent of leads generated by marketing and sales. Often sales are generating more than 60%, 70% or even 80% of new leads. This is inefficient, and an opportunity for improvement.
- Initial lead generation: number, quality and cost (sales vs. marketing). Anemic lead and opportunity pipelines may be a symptom of under-investment in content, along with deployment and distribution activities like marketing automation and publishing through social channels.
- Developing (nurturing) contacts not yet willing to engage through education-oriented content. This includes expansion efforts to identify and touch as many of the expected number of buyers on B2B buying teams (5 on average). How is this being done by sales?
These factors contribute to important sales and marketing cost metrics:
- Cost per qualified sales opportunity (when sales initiated vs. marketing)
- Close rates per marketing vs. sales generated leads
- Cost of new customer acquisition. This is an important metric. Content marketing has the potential to significantly lower this investor level metric.
To gain a rough starting baseline, work some percentages of number of new customers against your aggregate revenue growth from new customers (apply a percentage of the aggregate selling cost you think reflects the new customer acquisition goals, to the revenue number excluding recurring or expansion revenue from existing customers).
There are many other metrics you can develop, like the number and cost of sales meetings required, sales cycle times, and win/loss rates associated with different “classes” of sourced leads and opportunities.
Other business operations costs that content impacts should be part of your ROI discussion and justification:
- New product time-to-market-acceptance (hitting year one and two revenue and margin targets). Again, risk and opportunity cost of missing these often missed targets.
- New sales rep onboarding and ramp up time to full productivity. This includes the cost of reps across the time period, and the opportunity cost of lost revenue.
- Sales turnover costs
How you measure outcomes delivered and impacted is a key challenge. But it doesn’t have to be perfect. It can even be anecdotal when connected to important outcomes explained above.
This moves us to the final category, Content Operations.
This is sobering research on the ROI of digital channels or disciplines. Clearly, content marketing is a huge challenge when using the measuring tactics approach. These are all essentially performance measures.
This chart should convince you of the need to change your approach when making the case for content investment to your executive team.
The question executives will have about Content Operations is, “how well can you execute on the investments that are made?”
Here you might focus on three important areas and how well you:
- Meet digital content criteria, and resolve new challenges
(ie deliver a constant stream of quality, relevant, useful content, to meet the primary use case requirements of key content constituents, at scale)
- Lower marginal cost of content
- Improve performance at tactical level
Essentially quality, cost and performance. Standard measures for any operation.
Executive View of B2B Content ROI
Based on this assessment, how might your CEO, CFO and other executive team members think about the current state of content ROI?
- We have no over-arching or unified content strategy for the business.
- We’re not purposefully developing content. Decisions are not based on well-defined, considered and prioritized use case requirements. We seem to have a lot of coverage gaps.
- We execute through an outdated content operations model. Our process can’t meet, let alone optimize, digital content requirements — especially the need to scale without compromise.
- The content we do create is managed and deployed ineffectively. Much of our content can’t be found, doesn’t fit specific situations, can’t easily be edited to fit, is outdated within a year, can’t be maintained to extend useful life, and is not being leveraged through re-use.
- Despite the fact we’re spending millions on content — some sanctioned, much unsanctioned — we have no credible accounting of what we really are spending. Our decision and spending process is highly fragmented throughout siloed functions and tactics. We have little control over the process.
- We can’t effectively measure the impact of content. We don’t inform clear tactical decisions, let alone content ROI calculations.
- Unfortunately, we’re trying to measure performance attributes that don’t meet the threshold for business level ROI consideration.
To paraphrase a common expression, don’t let the performance tail try to wag the big, content ROI dog.
Focus on the impact of content on significant, must achieve, business strategy and business operations outcomes.
These are the areas and numbers that will show the greatest financial impact, as well as resonate with senior executives.
At this level, executives are interested in the big and aggregate numbers. The total investment in content, compared with the total outcomes delivered or significantly impacted.
Another decision at this level is to determine whether (and where) investment is too little or too much.
Beyond metrics, capture stories and examples where content made a significant impact on a major deal, improving a significant traditional marketing tactic, reduction in selling costs, or in other areas listed above.
Highlight strategic factors that are currently under-performing, or at serious risk. Look to gain a percent of what’s “at stake” as investment to mitigate those risks.
Make the case you can execute content operations to deliver quality work products on time, and at scale, to meet use case requirements.
Keep it simple and focused on the big, important possibilities. In the end, it’s belief systems, supported by the ability to execute, that will decide the matter.