Tag Archives: ROI

Untangling Content ROI

How to measure content ROI is a recurring question in forums and at conferences.  It’s a complex topic — I wish it were simple.  Some people present the topic in a simple way, or claim only one kind of measurement matters.  I don’t want to judge what other people care about: only they know what’s most important to their needs.  But broad, categorical statements about content ROI tend to mislead, because content is complicated and organizational goals are diverse.  I can’t provide a simple formula to calculate the value of content, but I hope to offer ideas on how to evaluate its impact.

The Bad News: The ROI of Content is Zero

First, I need to share with you some bad news about content that nearly everyone is hiding from you.  There is no return on investment from content.  If you don’t believe me, ask your CPA how you can depreciate your content.

A widespread misconception about content ROI is that content is an investment.  Yet accountants don’t consider most content as an investment.  They consider content as an expense.  The corporations that hire the accountants consider content as an expense as well.  In the eyes of accountants, content isn’t an asset that will provide value over many years.  It is a cost to be charged in the current year.  From a financial accounting perspective, you can’t have a return on investment when the item is considered as an expense, instead of as an investment.

Many years ago I took an accounting class at Columbia Business School. I remember having a strong dislike of accounting. Accounting operates according to its own definitions.  It may use words that we use in everyday conversation, but have specific ideas about what those words mean.  Take the word “asset.”  Many of us in the content strategy field love to talk about content assets.  Our content management systems manage content assets.  We want to reuse content assets.  The smart use of content assets can deliver greater value to organizations.  But what we refer to as a content asset is not an asset in an accounting sense.  When we speak of value, we are not necessarily using the word in the way an accountant would.

I warned that broad statements about ROI are dangerous, and that content is complicated.  There are cases where accountants will consider content as an investment — if you happen to work at Disney.  Disney creates content that delivers monetary value over many years.  They defy the laws of content gravity, creating content that often makes money over generations.  Most of us don’t work for Disney.  Most of us make content that has a limited shelf life.  Until we can demonstrate content value over multiple years, our content will be treated as an expense.

So the first task toward gaining credibility in the CFO office is to talk about the return on content in a broader way.  Just because content is an expense, that doesn’t mean it doesn’t offer value.  Advertising is an expense that corporations willingly spend billions on.  Few people talk about advertising as an investment: it’s a cost of business, accepted as necessary and important.

The Good News: Content Influences Profitability

Content is financially valuable to businesses.  It can be an asset — in the commonsense meaning of the word.  It’s entirely appropriate to ask what the payoff of content is, because creating content costs money.  We need ways to talk about the relationship between the costs of content, and revenues they might influence.

Profitability is determined by the relationship between revenues and costs.  Content can influence revenues in multiple ways.  Content is a cost, but that cost can vary widely according to how the content is created and managed.  The overall goal is to use content to increase revenues while reducing the costs of producing content, where possible.  The major challenge is that the costs associated with producing content are often not directly linked to the revenue value associated with the content.  As a result, it can be hard to see the effects on revenues of content creation costs.  Content’s influence on profitability is often indirect.

Various stakeholders tend to focus on different financial elements when evaluating the value of content. Some will seize on the costs of the content. How can it be done more cheaply?  Others will focus exclusively on the revenue that’s related to a set of content items. How many sales did this content produce?  These are legitimate concerns for any business.  But narrowly framed questions can have unintended consequences.  They can lead to optimizing of one aspect of content to the detriment of other aspects.  Costs and revenues can involve tradeoffs, where cost-savings hurt potential revenue.  Costs also involve choices about kinds of content to produce, so that choices to spend on content supporting one revenue opportunity can involve a decision not to produce content supporting another revenue opportunity.   For example, a firm might prioritize content for current customers over the needs of content for future customers, especially if revenue associated with current customers is easier to measure.

The key to knowing the value of content is to understand its relationship to profitability.

Customers Generate Profits, Not Content

Spreadsheets tend to represent things and not people.  There are costs associated with different activities, or different outputs, such as content.  There are revenues, actual and forecast, associated with products and services.  The customers that actually spend money for these products and services are often represented only indirectly.  But they are the link between one set of numbers (expenses involved with stuff they see and use) and another set (revenues associated with stuff they buy, which is generally not the content they see).

Unfortunately, the financial scrutiny of content items tends to obscure the more important issue of customer value.  Content is not valuable or costly in its own right.  Its financial implications are meaningful only with respect to the value of the customers using the content, and their needs.  The financial value of content is intrinsically related to the expected profitability of the customer.

The financial value of content is clear only when seen from the perspective of the customer.  Let’s look at a very simplified customer lifecycle.  The customer first enters a stage of awareness of a brand and its products.  Then the customer may move to a stage where she considers the product.  Finally, if all goes well, she may become an advocate for the brand and its products.  At each stage, content is important to how and what the customer feels, and how likely he or she may be to take various actions.  So what kind of content is most important?  Content to support awareness, content to support consideration, or content to support advocacy? Asked as an abstract hypothetical, the question poses false choices.   The business context is vital as well.  Is it more important to get a specific sale, or to acquire a new customer?  Such questions involve many other issues, such as buying frequency, brand loyalty, purchase lead times, product margins, etc.

There can be no consideration of a product without awareness, and no advocacy without favorable consideration (and use).  And awareness is diminished without advocacy by other customers.   The lifecycle shows that the customer’s value is not tied to one type of content — it is cultivated by many types.  At the same time, it is clear that content is only playing a supporting role.  The customer is not evaluating the content: she is evaluating the brand and its products.  Content is an amplifier of customer perception.  The content doesn’t create the sale — the product needs to fulfill a customer need.  While bad content can hurt revenues for otherwise excellent companies, content doesn’t have the power to make a bad company overcome poor quality products and services. Content’s role is to bring focus to what customers are interested in learning about.

Conversion is a Process, Not an Event

Marketing has become more focused on metrics, and so it is not surprising that content is being measured in support of sales. A/B testing is widely used to measure what content performs better in supporting sales.  Marketers are looking at how content can increase revenue conversion. This has often resulted in a tunneling of vision, to focus on the content on the product pages. Conversion is seen as an event, rather than as a process.

Below is a landing page for a product I heard about, and was interested in possibly purchasing.  It represents a fairly common pattern for page layouts for cloud based subscription services.  The page is simple, and unambiguous about what the brand wants you to do.  The page is little more than a button asking you to sign up (and, in the unlikely event you missed the button on the page, a second button is provided at the top).  I presume that this page has been tested, and the designers decided that less content resulted in more conversions per session.  If people have few places to go, they are more likely to sign up than if they get distracted by other pages. What’s harder to judge is how many people didn’t sign up because of the dearth of information.

A product page that is entirely about a Call-To-Action. The product remains a mystery until the prospect agrees to sign up.
A product page that is entirely about a Call-To-Action. The product remains a mystery until the prospect agrees to sign up.

Some online purchases are impulsive.  Impulse online purchases tend to be for inexpensive items, or from brands the customer has used before and is confident in knowing what to expect.  Most other kinds of purchases involve some level of evaluation of the product, or of the seller, sometimes over different sessions.  In the case if this product, the brand decided that it could encourage impulsive sign-ups by offering a two-week free trial.  This model is known as “buy before you try”, since you are presumed to have bought the product at sign-up, as your subscription is automatically renewed until you say otherwise.

A focus on conversion will often result in offering trials in lieu of content.  Free trials can be wonderful ways to experience a product. I enjoy sampling a new food item in a grocery, knowing I can walk away. But trials often involve extra work for prospective customers.  Online, my trial comes with strings attached.  I need to supply my email address.  I need to create an account, and make up a new password for a product I don’t know I want.  If it is a buy-before-you-try type trial, I’ll be asked for my credit card, and hope there is no drama if I do decide to cancel.  And I’m being forced to try the product on their schedule, and not my own.

Paradoxically, content designed to convert may end up not converting.  The brand provides little information about their service, such as what one could expect after signing up.  The only information available is hidden in a FAQ (how we love those), where you learn that the service will cost $100 a year — not an impulse buy for most people.  When prospective customers feel information is hidden, they are less likely to buy.

Breaking the Taboo of Non-Actionable Content

There is a widespread myth that all content must be designed to produce a specific action by the audience. If the content didn’t produce an action, then nothing happened, and the content is worthless.  It’s a seductive argument that appeals to our desire to be pragmatic.  We want to see clear outcomes from our content.  We don’t want to waste money creating content that doesn’t deliver results for our organization. So the temptation is to purge all content that doesn’t have an action button on it. And if we decide we have to keep the content, we should add action buttons so we have something we can measure.

I don’t want to minimize the problem of useless content that offers no value to either the organization or to audiences.  But it is unrealistic to expect all pages of content to contribute directly to a revenue funnel.  By all means weed out pages that aren’t being viewed.  But audiences do look at content with no intention to take action right away.  And that’s fine.

Creating content biased for action only makes sense when the content is discussing the object of the action.  Otherwise, the call to action is incongruous with the content.  A UX consultant may tell a nonprofit that people have trouble seeing the “donate now” button. But the nonprofit shouldn’t compensate by putting a “donate now” button on every page of their website — it looks pushy, and is unlikely to increase donations.

Conversion metrics measure an event, and can miss the broader process.  Most analytics are poor at tracking behavior across different sessions.  It is hard to know what happened between sessions — we only see events, and not the whole process.  Even sophisticated CRM technology can only tell part of the story.  It can’t tell us why people drop out, and if inadequate content played a role. It can’t tell us if people who bought supplemented their knowledge of the product with other sources of information — talking to colleagues or friends, or seeing a third party evaluation. To compensate for these gaps in our knowledge of customer behavior, businesses often try to force customers to make a decision, before they seem to disappear.

By far the biggest limitation of analytics is that they can’t measure mental activity easily.  We don’t know what customers are thinking as they view content, and therefore we tend to care only about what they do.  The opacity of mental activity leads some people to believe that the opinions of customers aren’t important, and that only their behavior counts.

The Financial Value of Customer Opinion

Customers have an opinion of a brand before they buy, and after they buy.  Those opinions have serious revenue implications. They shape whether a person will buy a product, whether they will recommend it, and whether they will buy it again.  Content plays an important role in helping customers form an opinion of a brand and product.  But it’s hard to know precisely what content is responsible for what opinions that in turn result in revenue-impacting decisions.  Humans just aren’t that linear in their behavior.  Often many pieces of content will influence an opinion, sometimes over a period of time.

Just because one can’t measure the direct revenue impact of content items does not mean these items have no revenue impact.  A simple example will illustrate this.  Most organizations have an “about us” page.  This page doesn’t support any revenue generating activity.  It doesn’t even support any specific customer task.  Despite not having a tightly defined purpose, these pages are viewed.  They may not get the highest traffic, but they can be important for smaller or less well known organizations.  People view these pages to learn who the organization is, and to assess how credible they seem.  People may decide whether or not to contact an organization based on the information on the “about us” page.

Non-transactional content is often more brand-oriented than product-oriented.  Such content doesn’t necessarily talk about the brand directly, but will often provide an impression of the brand in the context of talking about something of interest to current and potential customers.  These impressions influence how much trust a customer feels, and their openness to any persuasive messaging.  Overall content also shapes how loyal customers feel.  Do they identify with being a customer of a brand, or do they merely identify has being someone who is shopping, or as someone who was a past-purchaser of a product?

Another type of non-transactional content is post-purchase product information.  A focus on content for conversion can overlook the financial implications of the post-purchase experience. People often make purchase decisions based on a general feeling about a brand, plus one or two key criteria used to select a specific product.  If they are looking to book a hotel, they have an expectation about  the hotel chain, and may look for the price and location of rooms available.  They may not want to deal with too many details while booking.  But after booking, they may focus on the details, such as the availability of WiFi and hairdryers.  If information about these needs isn’t available, the customer may be disappointed with his decision.  Other forms of post-purchase product information include educational materials relating to using a product or service, on-boarding materials for new customers, and product help information.

The financial value of non-transactional content will vary considerably for two reasons.  First, no one item of content will be decisive in shaping a customer’s opinion. Many items, involving different content types, can be involved. Second, the level of content offered can be justified only in terms of the customer’s value to the organization.  Content that’s indirectly related to revenues is easiest to justify when it’s important to developing customer loyalty. Perhaps the product is high value, has high rates of repurchase, or involves a novel approach to the product category that requires some coaching to encourage adoption. Developing non-transactional content makes most financial sense when aimed at customers who will have a high lifetime value.

Measuring the impact of content that influences customer opinions is hard — much harder than measuring content designed around defined outcomes, such as the conversions on product pages.  But with clear goals, sound measurement is possible.  Content that’s not created to support a concrete customer action needs to be linked to specific brand and customer goals.  Customer goals will consider broader customer journeys where the brand and product are relevant, and where is there is a realistic opportunity to present content around these moments.  Appropriate timing is often critical for content to have an impact.  The goals of a brand will reflect a detailed examination of the customer lifecycle, and a full understanding of the future revenue implications of different stages and the brand’s delivery of services prior to and following revenue events.

The Ultimate Goal: Content that Supports Higher Margins

The two most common approaches to “Content ROI” involve improving conversion rates, and reducing content costs.  These tactics are incremental approaches —useful when done properly, although potentially counterproductive if done poorly.

To realize the full revenue potential of content, one can’t be a prisoner of one’s metrics. The things that are easiest to quantify financially are not necessarily the most important financial factors.  Many organizations fine-tune their landing pages with A/B testing.  Many of the changes they make are superficial: small visual and wording changes.  They are important, and have real consequences, lifting conversions.  But they only scratch the surface of the content customers consider.  The placement and color of buttons gets much attention partly because they are relatively simple things to measure.  That does not imply they are the most important things — only that their measurement is simple to do, and the results are tangible.

Conversion metrics measure the bottom of the marketing funnel: making sure people don’t drop out after they’ve reached the point of purchase page.  What’s harder to do, but potentially more financially valuable, is to expand the funnel by focussing on who enters it.  Content can attract more people to consider a brand and its products, and attract more profitable customers as well.

The biggest opportunity to increase revenues is by attracting people who would be unlikely to ever reach your product landing page.  How to do this is no mystery — it’s just hard to measure, and so gets de-emphasized by many metrics-driven organizations.  The first approach is to offer educational content, so that prospective buyers can learn about the benefits of a product or service without all those pesky calls-to-action.  People interested in educational content are often skeptics, who need to be convinced a solution or a brand is the right fit.  The second approach is through personalization.  The approach of intelligent content points to many ways in which content can be made less generic, and more relevant to specific customers. Many potential customers can’t see the relevance of the product or brand, and accordingly don’t even consider them in any detail, because existing content is too generic.

But profitability is not just about units of sale.  Profitability is about margins.

The first avenue to improving margins is reducing the cost of service.  Many content professionals focus on reducing the cost of producing content, which can potentially harm content quality if done poorly.  The bigger leverage can come from using content to reduce the cost of servicing customers.  Well-designed and targeted content can reduce support costs — a big win, provided the quality is high, and customers prefer to use self-service channels, instead of feeling forced to use them.

The second avenue to improving margins involves pricing.  Earlier I noted that the financial value of content depends on the financial value of the customers for which the content is intended.  A corollary holds true as well: the financial value of prospective customers is influenced by the content they see.  Valuable content can attract valuable customers.  It’s not only the volume of sales, it’s about the margin each sale results in.

Customers who see the brand as being credible and as being leaders are prepared to pay a premium over brands they see as generic.  This effect is most pronounced in the service industry, where experience is important to customer satisfaction, and content is important to experience.  Imagine you are looking to hire a professional services firm: a lawyer, an accountant (who appreciates the value of content), or perhaps a content strategist (maybe me!).  What you read about them online affects how you view their competency.  And those impressions will impact how much you are prepared to pay for their services.

These effects are real, but require a longer period to realize. Long-term projects may not be appealing to organizations that only care about quarterly numbers, or to product managers who are plotting their next job hop.  But for those committed to improving the utility of content offered to prospective customers, the financial opportunity is big.

Discovering Value

When seen from the perspective of how brand credibility affects margins, content marketing that often doesn’t seem linked to any specific outcome, now matters significantly.  It is not simply who knows about your firm that matters: it is about how they evaluate your capabilities, and what they are prepared to pay for your product or service.  Potential customers not only need to be aware of a firm, and have a correct understanding of what it offers, they need to have a favorable impression of it as well.

Content that provides a distributed rather than direct financial contribution needs its own identity. Perhaps we should call it margin-enhancing content.  Such content enables brands to be more profitable, but does so indirectly.  The task of modeling and monitoring the impact of such content requires a deep awareness of how pieces may interact with and influence each other.  By its nature, estimating the strength of these relationships will be inexact.  But the upside of endeavoring to measure them is great.  And through experience and experimentation, the possibilities for more reliable measurements can only improve.

Measurement is important, but it’s not always obvious how to do it. For much of human history, people were unaware of radiation, because it could not be directly seen.  Eventually, the means to detect and measure it were developed.  The process of measuring the financial value of content involves a similar process of investigation: looking for evidence of its effects, and experimenting with ways to measure it more accurately.

— Michael Andrews

Profitable insights from content marketing

In a previous post, I explained why a brand should not expect their content marketing programs to drive sales growth, because such expectations can interfere with a brand’s ability to build long-term relationships with audience segments.  In this post, I examine how building relationships with audiences using a content marketing program can lead to greater customer insights, support the development of the brand, and enhance profitability.

Marketing is fundamentally about identifying the needs of a segment, and understanding the profit potential the segment represents.  Content marketing enables long-term relationships with audiences.  Content marketing plays an important strategic role precisely because it has a long-term focus, rather than the short-term focus of promotional content.  As Philip Kotler notes: “marketing is not a short-term selling effort but a long-term investment effort.” Brands need engaging content to support that long-term effort.

Relationships enable understanding of marketing segments

Understanding customers for marketing purposes requires a higher resolution picture than offered by personas.  Personas may be a starting point for thinking about segmentation, and may have value helping content writers develop their content, but they don’t provide the deep insights available from data.  Personas should reflect data, but can’t themselves represent that level of detail.

Content marketing can be a fantastic tool for understanding customers.  The more you talk about the interests of your customers, the more they will open up and the more you will learn.  While customer research using content marketing is not a substitute for ethnographic research or other qualitative techniques, it can deliver tremendous insights that can deliver profitability.

Businesses exist to be profitable, and a key part of that is knowing who is profitable.  Audience directed content can help answer at.  When content is focused on the natural interests and motivations of people, they will share their views and preferences in ways more faithfully than in surveys or focus groups.

Part of the purpose of content marketing is to learn what segments are most profitable for which products you offer.  Targeting content helps to distill target market segments according to actual motivations.

Brands can learn many things about potential customers through content:

  • the interests of different people, according to how attracted they are to content of different themes and genres
  • what their attitudes to different topics are, and how their attitudes may shift according to different dimensions of a discussion
  • their values: what they spend time on, what they most talk about and share with others
  • demographic information: household characteristics or profession, either self revealed or inferred through content usage, which can be cross-referenced with offline research sources
  • financial orientation: concerns about finances and willingness to spend on certain kinds of products and services, which can be cross-referenced with offline market data about income, assets, spending and credit

Content can foster audience activity by presenting audiences something they care about, and offering them something to talk about.  This activity produces data on:

  • content consumption behavior
  • search terms used to discover content
  • social interactions relating to content

Through the use of standard digital analytics techniques involving cookies and IP address identification, marketers can learn more about who is engaging with the content, and where else they spend time online.

The process is iterative.  As marketers learn more about distinctions that matter within a segment, they can refine their segmentation to adjust the focus of content, potentially creating new areas of content focus that are even more closely aligned with the interests of a group.  They may also conclude some segments aren’t likely to be profitable, and avoid actively marketing to them.

Even though this content is not aimed at selling, the insights that can be developed from it are useful for developing sales oriented content to present when people from a segment have a need to purchase something.  First, the insights provide guidance on how to message to a segment by using criteria that matter most to them.  Second, the insights help to personalize the offer.  The marketers understand how a segment evaluates a product, and how their values, interests and general circumstances come into play.  They get better insights into what are the chief dis-satisfiers for a segment, can tailor what they recommend based on expected satisfaction of a particular model for a given segment, and offer incentives as necessary to prevent “buyers remorse”, be they discounts codes or coupons, upgrades or membership award perks, or after sales service.

The exact mix of the personalized offer has a big impact on the profitability the brand realizes, so being able to optimize the mix through data developed from audience interaction with content is highly valuable.  Content can clarify how personal values translate into revenue value.  To cite a basic example, some customers will be more time sensitive than others, so they will value time more highly.   The widely variable pricing and service levels the airline industry offers different passengers is based on projected customer profitability.  Some of the this profit yield maximization is starting to be adopted by other industries (without the baggage of having high fixed costs for an essentially undifferentiated product.)

Aligning brand values with values embraced by market segments

Since the purpose of content marketing is to develop a long term relationship rather than a short term sale, it provides an excellent vehicle for brand building.  Calculating the ROI on brand activities is more involved than calculating the profit margin on sales, but it is well established that strong branding reduces sales costs, since you have to do less “selling” when people already trust your brand.

Emotionally engaging content is a powerful way to develop a sense of shared connection with audiences.  You have enhanced your brand with the target segment to the extent your content captures a sense of shared identity with the audience engaging with it.  Customer segments will share common concerns and interests (the segmentation), and the brand needs to learn what these are and how they relate to the brand’s values.  Brands can promote and contribute to the interests of the segment, by offering them exclusive content resources not available elsewhere.  Content can be tailored to match segment’s interests, and highlight common values between the segment and the brand.

The role of content marketing is to translate high-level brand values into content that embodies more specific brand attributes that will resonate with various audience segments.  The content will have a niche focus, but by using a coordinated content marketing strategy, individual segments can be aggregated into larger groupings to align with products and divisions in an organization.


To see how brands can use content marketing to enhance profitability without resorting to using content as a sales tool, we will examine an example from a unit of HSBC.  While many consumers rate their bank as being unhelpful, HSBC Expat, a unit that manages funds for people who live in foreign countries, has managed to develop content that shifts common brand perceptions.  They have created a community open to all (one doesn’t need to be a customer) that focuses on issues of vital concern to expats. Some of these issues are financial, but most of them relate to other life concerns such as housing or schooling. HSBC contributes some of the suggestions, while community members supply their own tips.

A screenshot of HSBC's content marketing aimed at British expats
A screenshot of HSBC’s content marketing aimed at British expats

The content works well on many levels.  While I don’t have any visibility into the internal metrics of the site, one can see that it has been successful attracting participation.  The content is valuable to expats who access it, and it also provides HSBC with insights into the concerns of expats, and what they most value.  Many comments concern issues like language, or making friends.  Other issues are more specific to financial topics such as taxes.  HSBC can understand more about the various audiences who interact with the content.  Some people will already be expats, while others will be thinking about becoming expats, and some may be ready to give up the expat life and move home.  By providing an emotionally safe space to discuss these topics, free of sales content, HSBC can understand how to serve needs of prospective customers in different situations, and be seen as a brand supportive of their needs.

This example uses a community model, but other media such as videos and games can be used to foster greater engagement.  The focus of the content can be anything that matters emotionally to an audience segment that has relevance to the brand.  In many cases brands develop content around a theme that isn’t directly tied to the brand’s products, but represents aspects of the brands values that resonate with audience segments, which could be values such as performing at one’s best, or innovation and creativity.

Content marketing’s unique role

When brands embrace the possibilities of content marketing as a living laboratory that supports their evolution, they can gain precise insights from small, well-defined segments.  In contrast, when brands expect content marketing to deliver sales growth, they have to chase large numbers of people, and can’t offer content truly targeted to the interests of any group.

There remains a role for persuasive sales content to support the customer’s buying journey, and task focused content to support after sales support.  People who are motivated to do something expect to be persuaded that your choice is the right one.  When they decide what they want to do, they want to get on with it, and need content to facilitate that.  But recommendations only work when people are ready to make a decision, and are interested in listening to the opinions of the brand.   Persistent persuasion, even when subtle, is exhausting, and people’s attention will wonder elsewhere.

To become engaging and sustainable, content marketing needs to provide emotional safety for audiences.  Content marketing also needs to provide brands with actionable insights that can enhance their profitability in order to become a sustainable strategy.  Neither of these things is easy to do.  Engaging content requires enormous creativity and sensitivity to audience needs.  Insights also require creativity to identify, and imagination to see how they can create big opportunities for brands.  Despite the effort required, the payoff can be great precisely because so few brands do either of these things well.

—Michael Andrews

Finding the hidden ROI in content marketing

Content marketing is generating lots of buzz, and not a few questions.  Content marketing’s leading pitchman, Joe Pulizzi, recently published a book boldly entitled “Epic.”  Money is pouring into content marketing efforts, while executives ask if content marketing is a good long term strategy, and a sustainably profitable one.  There’s a lot of confusion about the ROI of content marketing because there’s still a lot of confusion about exactly what content marketing is, and what it can accomplish.  I believe content marketing has an important role, but I also believe many people expect the wrong things from it.  They are wasting money on things content marketing can’t deliver, and ignoring things content marketing can deliver.

Content marketing is an umbrella term that covers many different activities that in reality share little with one another.  The moment someone says “everyone’s doing it” we should ask ourselves whether definitions are overly loose.  Examples of content marketing range from email newsletters produced by small businesses, sales testimonials in whitepapers from widget manufacturers, to expensive social media gaming platforms created by billion dollar beverage brands.  The purpose of these activities can be vastly different, as will be the ROI they deliver.

Much of the buzz about content marketing highlights compelling examples of new genres of content that seem far more exciting than conventional marketing collateral:

  • Native ads: articles that look like normal journalism, and appear along side articles in leading publications
  • Branded content: videos, games and storytelling that are as fun as stuff you normally have to pay for
  • Communities: places where audiences can relate to each other about the topics that they are most passionate

Once the awe has quieted, people may reasonably wonder what the actual payoff is for producing such engaging content.  It sounds expensive, and it is.  Do brands spend big money giving away free content out of altruism, or perhaps out of vanity?  Not likely.  Does splashy content generate so much word of mouth that it becomes contagious and sales just happen?  Again, no.  Making a splash is harder than ever, and content initiatives increasingly succeed or fail based on who they reach, rather than how big an audience they reach.

Common definitions can mislead

While definitions of content marketing vary, they generally involve three aspects:

  1. that the content is owned and created by the brand
  2. that the content is meant to focus on audience or customer interests
  3. that the content delivers a result for the brand

Of those three items, only the first is clear cut.  The second, about being audience centric, is open to much interpretation.  The third, about ROI delivered, is even less clear, partly because of the squishy definition about what actually constitutes audience centric content.

As for defining audience-centric content, I prefer Google’s engagement guidelines, which ask: “What value do you offer consumers who visit your owned channels? Are you offering entertainment, education, peer recommendations and feedback?”  Note that no mention is made of imparting information.  Simply telling audiences what you are doing is not audience centric, no matter how well written.  They would never pay for that anyway, so offering it to them for free is hardly generous.  So content marketing definitions that describe audience-centric content being “relevant and valuable” are insufficient, because too often they assume the audience is in the mode of buying.  Even if someone is a potential customer who may eventually purchase an item, they may not think of themselves that way if they haven’t yet decided they want or need it.

In terms of the business payoff of audience-centric content, discussion is often aspirational rather than concrete.  There is much attention given to views and likes and shares, to big numbers or trending momentum.  As I will argue shortly, these metrics are a distraction from the actual business value of audience engagement.  The Content Management Institute furnishes unspecific guidance, setting an “objective of driving profitable customer action.”   Exactly how profits result is not detailed.  There is discussion about messaging to customers for “the 99 per cent of the time they aren’t ready to buy,” of “marketing less” or “selling less,” while at the same time trying to “change.. customer behavior” to drive “conversion” and boost sales.  Such statements, even if each sounds appealing on its own, don’t add up to a coherent story of how customers can at the same time not be shopping but persuaded to buy.  Stories are meant to help us buy into a rationale for taking action, but the plot here feels a bit sketchy.

Setting sales goals for content marketing is a mistake

When the discussion of content marketing turns to ROI specifically, the expected role of content gets more explicit, but at odds with the narrative that content marketing is about less selling.

What some marketers and CRM vendors call content marketing focuses on demand generation (creating awareness of products you sell) and lead generation (getting names of prospective buyers.)  Brands may believe they are being more customer-centric in how they talk, but the focus here is about promoting a product.

To justify the ROI, proponents may talk about content marketing as using content for in-bound marketing or out-bound marketing.  By directly tying content to sales, they continue old formulas that have been used since the days of direct mail or call center up-selling.  The scripts are longer, but messaging remains paramount. Proponents will suggest the key difference is that the marketing is no longer about campaigns, and no longer creates an abrupt interruption, because they are always doing it.  They are communicating marketing messages to their customers all the time, so now they feel they have a relationship.

But as the legendary marketing scholar Philip Kotler notes: “Marketing is too often confused with selling. ”

What many promoters consider to be content marketing, I would describe as long form advertising that happens to be written by the brand.  It seems like the perfect fix: use longer content to explain complex issues over time, when short ads don’t get noticed.  Like other advertising, its purpose is to increase sales, and it is failing if it doesn’t deliver sales growth.  So if you produce content that doesn’t ignite buying impulses, but you are expecting it to increase your sales, you will have an ROI problem.  Those nice infographics and video clips you produce look like a cost, rather than as an investment.

When the success of your content is measured by the sales it generates, you will make your content more and more sales oriented, to get it to deliver those goals.  It becomes a death spiral, as streams of sales oriented content tax the interest and attention of audiences, who tune out, so the marketers in turn amp up the sales message.  Rather than developing a sustained long-term relationship with audiences who might be inclined to identify with your brand’s vision, you instead are left with casual and fickle audiences who are checking out information as part of their prepurchase research.

Understanding the core value of content marketing

If sales revenue is not the right ROI metric for content marketing, which after all is supposed to be different from sales-oriented content, what other meaningful business outcomes can content deliver?  The purpose of investing in high quality content needs to be more specific than aiming to be “epic,” and needs to offer more justification than promising profits without explaining how it actually happens.

So let’s return to the apparent enigma of why big brands are spending big money on content that on its surface doesn’t seem to be about selling units of products.  What is the ROI of such spending?

Surprisingly, many marketers think about the ROI of content marketing by applying pre-digital concepts of product-focused marketing and making a sale, and ignore profitability factors.  They make little reference to data-driven digital marketing practices, or to the ad tech infrastructure that enables it.  They don’t talk about how data analytics of audience behavior can show the revenue value of customers.

Marketing today is less about driving a sale, and more about determining what specifically you sell to whom, with the goal of using available data to maximize profit yield across different segments.   Understanding the customer is more important than showcasing the product.

Large brands are interested in content marketing for two reasons:

  • it is an effective way to reach certain audience segments that offer attractive margins (the engaging media aspect)
  • it provides more immediacy to learn from and interact with these segments than traditional bought media (the owned content aspect)

Branded content exists to understand customers and establish a relationship with them, and is not about selling to them. A branded game, for example, can be effective content marketing, but won’t directly result in sales changes.  The popularity of branded content is best measured in the intensity that it engages audience members, that is, how much they use it and how much it means to them, rather than the numbers of audience members who see it.  While big audiences are a plus, branded content can be successful with small audiences, provided it attracts the right audience.

Until recently, brands had to rely on traditional media publishers to reach segments of individuals.  These segments didn’t define their identities in terms of the products sold by the brand, but instead define themselves by their attitudes, interests, and lifestyles.  Effective content marketing connects the brand with the concerns that matter most in people’s lives.

Refining the scope of content marketing

There are already many, sometimes contradictory definitions for content marketing, but none adequately addresses precisely how content marketing makes firms more profitable.  I want to offer my own definition, in the interest of clarifying what works, and doesn’t work, with content marketing. Branded content is probably a better term than content marketing, given the widespread misunderstanding about the difference between marketing and selling, but since content marketing is widely used already, I will stick with it.

My definition adheres to many of the intents of other definitions (focus on attracting interest, building relationships and serving the financial interests of the organization), but drops some of the more problematic aspects (trying to change people’s behavior, focusing on conversions and other transactional processes.)  If content strategy is about the functional side (don’t waste people’s time, give them exactly what they are seeking), then content marketing is about the emotional side (make them like being with you.)

Content marketing is content:

  1. owned and created by a brand
  2. that is enjoyable to use because it is meaningful or fun
  3. that builds long-term relationships
  4. with specific communities of people who have similar interests, life goals and other motivations
  5. who are attracted to the content (though do not ”need” it)
  6. because it persistently addresses their interests over time
  7. which are not related to any specific transaction needed from the brand
  8. and who would likely want to be customers with a brand sharing their values and understanding their needs
  9. which creates profit potential over the long term.

In short, content marketing is about offering emotionally engaging content that supports the larger, long term marketing objectives of a brand.   Content that is motivated by creating long term relationships can deliver long term profits.  The ROI depends on creating a long term relationship.

Content marketing can enhance long term profitability by furthering two key marketing needs:

  • market research
  • brand building

Focusing on these two needs addresses the core purpose of marketing, as defined by Philip Kotler: “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.  Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”

In a next post, I will cover how content marketing can support market research and brand building, both essential contributors to brand profitability.

— Michael Andrews