ROI Archives - Page 2 of 2

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:

that the content is owned and created by the brand
that the content is meant to focus on audience or customer interests
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:

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

Imagine a company that devotes 50 people to create an item of content that is used by only 10 people. That scenario sounds absurd in the digital world, but companies often do such things when they create content for their executives. Count the number of people on the email list – for example, the internal team and associated department reviewers who are charged with drafting a decision memo for the company board. Do all these people really need to be involved? Is the matter that important? Even in the digital realm, companies are capable of unconsciously mimicking such behavior when they allow procedures for internal communications to shape their process for creating content for their customers. You see this happen when the legal department needs to clear each revision, or the executive sponsor wants to approve the final copy.

The opposite situation is also common: a small ragged team of low level employees is responsible for mission critical content that has obvious financial implications, but it is overwhelmed by the task.

Balancing resources and content scope

So what is the right balance between resources for content needed, and the scope of content to deliver? Determining the balance reveals both how much content to create, as well as how much money to invest in content quality factors such as

creative resources
production hardware
software tools and platforms
review procedures
risk control

Apart from such big resource decisions, knowing the right balance can be helpful when deciding what specific content to deliver in a given quarter: for example, does it make sense to produce more videos and delay the project to tag community forum comments?

What is needed is a comprehensive and systematic framework for assessing the impact that all content achieves, measured against all the resources devoted to create that content. True, organizations commonly measure content resources and outcomes on a project basis for specific content initiatives (a campaign, a re-design, a mobile app, etc.) But rarely do they develop an overall picture of what value they are achieving from all their content activities. Traditional media publishers, being in the more straightforward position of being pure publishers, probably have the clearest sense of the value of their digital content in terms of costs and revenues. Yet even they are struggling with getting scope and resource levels right (e.g., should they develop a new tablet app?) For traditional product and services firms that are comparatively new to digital publishing, it can be challenging to track the true payoff. There may be many different content initiatives, each having different goals and using different kinds of resources, including staff who are devoted to content activities only part time.

With organizations undertaking growing numbers projects and investments related to content, content strategists should help their stakeholders put together an integrated “portfolio view” showing how all activities are complementing each other.

Content value: effectiveness and efficiency

For content to have value it must satisfy the needs of both audiences and organizations. Useful but expensive content can be poor value, as is cheap but inadequate content. For audiences, content must meet a need to be effective. For organizations, content must show return on investment.

In these heady days of content consciousness (embodied by the slogan “content is king”), many organizations seem willing to invest now in content, and worry about the precise payoff later, as long as baseline indicators seem to be improving. But sooner or later, organizations, especially product and service companies new to digital publishing, will ask: Is all our content worth the effort? Is our content costing us money, or making us money? If content is now a core business asset, can you show me what it returns?

At the heart of content value are two core concepts: content effectiveness, and content production efficiency.

Content effectiveness measures how audiences relate to the content. Audience impact can – and should – be measured many ways, since audiences are looking for different things from content, and how they use content will vary as well. The impact of content is related to it’s purpose:

content that has a direct purpose such as how many conversions did an email result in (tight coupling of content to outcomes)
content that fosters indirect impacts across the customer lifecycle such as building brand awareness (loose coupling of content to outcomes)
content that has multiple purposes such as when a product tutorial video needs to reduce product returns and needs to enhance brand perception (diffuse coupling of content to outcomes)

There are many metrics relating to content effectiveness: number of visitors, dwell time, social media shares, loyalty metrics, reputation metrics, activations, to name but a few. These metrics measure different kinds of outcomes and reflect different qualities of a brand.

Content production efficiency measures the resource intensity when creating particular kinds of content. High effort content consumes many resources, both human resources and non-labor costs such as asset licensing, hosting, or paid promotion. Efficient content production reduces total resources needed to create a type of content of a desired quality. It is important to recognize that content that requires effort is not necessarily inefficient: efficiency depends on the type of content being created, and the qualities (impact) expected. Video will often be more resource intensive than copy, for example, but it does not follow that all video is inefficient. Efficiency is not solely a matter of cost, as quality (and potential audience impact) needs to be accounted for. Generally, content that costs less to make, or takes less time to make, is more efficient than more expensive content or content slower to produce, provided the content is of comparable quality – it creates equivalent audience impact.

The costs associated with content are subject to two opposite influences. On the one hand, the unit cost to create content is decreasing, as better content production and management tools make content creation easier. However, these tools have not necessarily enhanced the quality of content (value to audiences), so that more content is being created of a substandard quality. This situation has lead to recommendations for more human attention and more structured review processes in content creation, which can drive up costs.

Strategies for improving return on content

When organizations become concerned that they are not getting a desired return on their content, they will typically try one of two strategies.

The first strategy is to enhance the quality of the content, making it more engaging or useful, and potentially broaden the scope of content activities: adding videos, adding more social media, etc. These tactics aim to improve the impact of an organization’s content, but do not typically lead to production efficiency. Instead, expanded activities tend to involve more processes that need coordination, increasing the overhead. A common downside is organizational fatigue, as proliferating content initiatives require more attention from staff who do not have content as a core responsibility.

The second strategy organizations use to get more value from their content is to focus on tweaking a narrow range of content to make it more productive. Organizations may fine tune their SEO or their copywriting to drive more activation; organizations try to get a repeatable formula that yields predictable results. Consider a finely evolved targeted marketing email: there are fewer wasted emails sent, and less editorial review, since a template has been optimized. Predictability helps to reduce risk and contain costs, but such a focus may do little to increase long term brand engagement and improve the audience impact of content. The focus on optimizing specific content products can result in sub-optimization for the organization overall, where separate activities are done in departmental silos without a broader vision for what customers really want and how to address those desires.

Few organizations seem to move along a direct path from “bungling” to “enlightened.” Instead they tend to emphasize either content enrichment, or content streamlining, even though there is no intrinsic reason why organizations can not both fine tune delivery of established content at the same time they expand the scope of content activities into newer areas.

Why firms emphasize either content enrichment or content streamlining probably comes down to who in the organization is driving the effort, and the narrative they use to describe the problem and its resolution. The content enrichers believe that the core value proposition of the existing content is inadequate, and that something better needs to be offered. This approach appeals to creative marketers, agencies, and brand-conscious executives. The content streamliners believe the core value proposition of the content is fine, it just needs refinement to yield better results more quickly and cheaply. Such an approach appeals to analytic marketers, and IT departments interested in upgrading systems.

To avoid a lopsided strategy, organizations need to assess the total value of all their content operations: to compare the resources they devote to content with the outcomes achieved by looking at both content effectiveness and content production efficiency together. Helping stakeholders understand this value will be a key responsibility for content strategists in the future.