Estimating Content Marketing ROI is a crucial part of any content marketing campaign.
Do you know if your content marketing efforts are paying off?
Do you have an expected timeline for when they will?
If you’re actively involved in content marketing, or considering the investment, it’s important to understand the timeline to significant results.
After all, you need to make sure content marketing will be a high-performing channel before committing a major portion of your marketing budget. Furthermore, you need to know how to set realistic KPIs. Otherwise, you’ll never know whether you’re on-track to hit your growth goals.
This guide is here to help you understand the impact content marketing can have on your business, and how long it will take.
These days, there’s more competition than ever before to capture organic search traffic, educate potential buyers, and build brand affinity online.
If you don’t consider content marketing & SEO to be a key growth channel for your business, it isn’t something to “dabble around with.”
Half-hearted efforts will result in your business being surpassed by hungrier competition.
That being said, done correctly, content marketing is one of the most powerful, compounding growth channels available.
In other words, while it takes significant expertise and effort to run an effective content marketing program, the eventual result will be a steady flow of qualified traffic, which could be more millions in additional revenue, each month.
Throughout this guide, you'll learn to:
At the end of this post, we’ve included an ROI Calculator that can help you make projections for your own business by inserting your goals, costs, and revenue estimates. I'll walk you through how to use it to build your own projections.
Let's get started.
Content marketing is about more than just driving search traffic.
We’ve entered a new era of marketing, in which those who can best educate and entertain potential customers will create impactful, high-growth brands.
Content can be used to attract new customers, help existing customers better utilize your offerings (reducing churn), and more. However, today we're going to focus primarily on the organic traffic benefits.
Before we can effectively compare your site against competitors, or focus on building & executing an effective content marketing strategy, there are a few things that need to be in place.
Specifically, you'll need a:
Creating content that provides the best possible experience for the user & ranks for lucrative search terms requires a solid foundation.
Once these elements are in place, it's time to get to work on our projections, then the hard work of turning them into reality.
Let's be clear about why we're involved in content marketing to begin with. Your goal is to drive a high volume of qualified traffic into your marketing funnel, creating significant revenue relative to the investment.
With that in mind, we're going to do a bit of competitive analysis that will allow you to estimate the revenue, expenses, and timeline to achieve several milestones. At the end, you'll have a visual and numerical representation of that timeline, and will be better able to assess whether content marketing is viable marketing channel for your business.
For the purposes of demonstration, let’s say we wanted to create a new sales engagement SaaS company. Let's call it Convertio.
Our first step will be to find out what we're up against.
To see who our potential competitors are, we’ll take a look at G2’s sales engagement leaderboard.
From this data, we can see that the top competitors in the space are: Salesloft, Outreach, InsideSales, YesWare, Cirrus, and MixMax.
Chances are, you already know who the top competitors are in your industry. If not, do a few Google searches to uncover who they are, and write each one down.
Using Ahrefs, we’re able to estimate their monthly revenue by using the the “Traffic Value” estimation for their domain:
This metric is meant to reflect what you would have to spend using pay-per-click advertising to get the same traffic, but we’ll use it as a proxy for revenue from organic search, since you should be able to at least break even on the traffic value.
Next, we’ll run this search for all six of the top competitors to get a picture of what monthly revenues from organic traffic in this industry look like:
Obviously, there is quite a bit of variance in how important organic search is to these competitors.
Our goal is to grow an impactful company, but we don't want to assume we'll do as well as the #1 player in our industry in a reasonable timeframe. So, instead, we'll average the traffic value of all our competitors.
In this case, that average traffic value number comes out to be $121,342 per month from organic traffic. We’ll set that as our revenue target.
Now, we need to find out what it will take to reach this revenue target.
While we're looking up the traffic value for each of these competitors, we'll also note the number of referring domains (unique websites linking to their domain) for each of our competitors.
Again, we'll average these to get an estimated number of referring domains needed to be a competitor in this market. In this case, that comes out to 2,383 referring domains.
** Note: This can vary depending on the quality and relevance of the referring domains. If you get links from more authoritative domains, you don't need as many to achieve the same rankings. **
Now it's time to figure out what sort of pace we can set with our efforts, and what that translates into in terms of timeline to the desired result.
In order to calculate the number of referring domains we’ll get per month, we'll consider two different sources of referring domains - those that we build via content marketing & SEO, and those which are built naturally as the result of other marketing efforts.
Thus, in total each month, we get 30 links.
However, we need to account for some link attrition. This is when links break over time because webmasters decide not to renew their domain, old content gets deleted, there is an acquisition, re-brand or redesign, or a myriad of other reasons.
If we assume an 5% attrition rate (we suggest keeping it between 5% and 10%), this drops our number of links per month to approximately 27 links.
Disclaimer: These link numbers are only estimates. Once you start producing content and developing other content marketing initiatives, you can adjust these according to your results. But for now, these estimates are a good starting point.
If we build 27 links per month and need 2,383 referring domains to compete, it would take approximately 88 months or 7.4 years to reach our target.
Don’t panic - this is normal in any sophisticated market.
It’s important to keep in mind the number of years is an approximation. Over time, the URL Rating and authority of their key pages, as well as the number of referring domains competitors have, are likely to increase.
Don’t worry about that too much right now. Although competitor growth is certainly important to consider, that’s a more advanced consideration that will come into play once our content marketing efforts are further along.
We're only trying to get an estimate now, not an exact calculation. Just keep in mind you’ll need to adjust for competitor's organic traffic growth, not just your own, as you begin to run a more in-depth competitor analysis.
Remember, you can use our ROI Calculator at the bottom of this post to play around with these numbers & make the calculations easier.
It’s worth mentioning that the authority of your domain isn’t everything. The authority of a given page can allow it to rank for terms over more authoritative domains.
For instance, if you produce a best-in-class guide for a given search query, and put a ton of work into building 2x or 3x as many links at the top competitor has, chances are good that you’ll be able to outrank them despite having a “weaker” domain.
High domain authority (shown by URL Rating) is advantageous in that you can more easily rank for terms you target, but that doesn’t mean a domain with a lower URL Rating can’t surpass you by producing better content and getting more links to that page.
We’re obviously biased, but we believe the best option for many companies in this category (B2B SaaS) is to work with a high-end content marketing agency. This would make cost estimation very simple.
Let’s take a look at what the typical content marketing & SEO package for a company like this might look like in the first year:
Alternatively, you can also look at building an internal content marketing team, in which case your cost calculations need to be based and labor hours and salaries.
Let’s say your internal team is still aiming to produce the same 4 pieces of content each month. If that’s split between two content creators (1 writer, 1 designer) who average a $50,000 salary each, and they spend about half their time working on content marketing (with the other half being spent creating for other departments, such as creating sales resources), we’re looking at $4,166 per month for content production.
But, you also need to add in the promotion costs. So, let’s say you have a very lean SEO team, comprised of an SEO Director (~$60,000 salary), a link builder (~$38,000 salary), and a technical SEO / developer (~$50,000 salary).
Combining our internal costs for content production & SEO work, we’re looking at ~$16,500 per month for an internal team.
So far, you should understand how to estimate your costs. However, as you start scaling your marketing activities, you’ll want to learn not only how to calculate costs, but how to optimize them.
A valuable metric to optimize is the cost-per-referring-domain, or CPRD, which tell you how much money it takes to acquire each referring domain. You can lower your CPRD by either reducing total marketing costs per month or increasing the number of links generated per month.
In this example, our total monthly expenses are $8,448. Our total referring domains per month, are approximately 27 (this includes our 5% link attrition rate).
Calculating CPRD is now just simple division:
Thus, it takes $312 to acquire a new referring domain utilizing a content marketing agency, or $685 per new referring domain utilizing your internal team.
As we scale, we’ll want to work on optimizing our CPRD to get a higher ROI.
Let’s say, for example, we reduce your total monthly expenses for an internal team to $15,000 per month (with the same number of referring domains per month, at 27):
This would drop our CPRD to $555.
We could also reduce our CPRD by increasing the number of referring domains (or our efficiency in getting links from new domains) per month.
Let’s say we increase the total monthly referring domains to 40 (while keeping costs the same as the original, at $18,500):
In this case, our CPRD would be $375.
Pro Tip: If you need assistance obtaining more referring domains per piece of content, check out our content marketing services.
Calculating revenue for our example is fairly simple, because we already found our goal earlier.
Based on the competition, we would have monthly revenues from content marketing of $121,342 once we reach that level. We estimate that will take 7.4 years, or 88 months, to reach that level of revenue.
However, a website usually takes at least 6 months to generate search revenue, so we’re going to calculate our average monthly revenue increase using 88 months:
Thus, for the first 6 months we’ll make $0. For the next 82 months, revenue will increase by $1,479 each month on average. Again, this is just a projection and your results will likely vary, but this will help establish an initial expectation for your business.
Will you realistically go from making $0 in revenue to over $1,479 the next month? Unlikely. Instead, revenue will increase at a much more gradual rate in the beginning, and become more predictable later on.
Putting these costs and revenue estimate together, we're able to build a timeline of our cost and revenue.
In this particular case, our monthly revenue would exceed monthly expenses at a year, and total revenue would surpass total expenses in month 21. By the end of our five-year projection, the return on investment is 457% in total.
Of course, this isn't an exact timeline, as a variety of factors could make this progress slower or faster. What this does do is provide a good benchmark to compare ourselves against, and a confirmation that for this company, content marketing does indeed make sense as a marketing channel.
Now it's time for you to do your own ROI projections to determine whether content marketing might be a good channel for you. Use Ahrefs and the free calculator below to
If content marketing looks like a great channel to grow your business, we'd love to chat about how to make that a reality.
Note: To view the charts after entering your data, click the "View Charts" button in the upper right-hand corner. You may need to wait as long as 30 seconds for your results to appear - there's a lot of math going on in the background!
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