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Content Marketing ROI: the Value of Content for Lead Generation

Content Marketing ROI: the Value of Content for Lead Generation

Content Marketing

As digital marketers who specialize in lead generation, we at Forthea are constantly collecting and analyzing data to fine-tune our strategies and produce better results for each dollar spent by our clients, who often evaluate their marketing budgets based on hard benefits like return on investment, or ROI.

When it comes to online initiatives like paid search, it’s easy for our Houston digital marketing agency to demonstrate ROI by comparing the cost of a pay-per-click, or PPC, campaign with its resulting cost per lead. But, besides counting eyeballs, it’s not easy to provide hard benefits for organic content marketing, which is often defined by intuitive or soft benefits, such as thought leadership, public trust, more engaged prospects, and higher brand loyalty.

However, a recent study by Kapost, in partnership with Eloqua, finally shines a light on the hard benefits of a dedicated content marketing strategy. Now clients can see, in some of the clearest possible terms, the ROI delivered by content marketing. And the results, though perhaps surprising to some, only confirm what we already knew: content (marketing) is king.

Content Marketing Yields 3 Times More Leads Than Paid Search

The study, Content Marketing ROI, found the return on investment from content marketing is roughly three times higher than the ROI from paid search, which had been recently identified as the most productive marketing tactic in the digital space.

Before you scoff at such a generalization, it’s important to understand the methodology behind the study, which incorporates data and interviews from more than 50 different content publishers across a variety of industries with annual revenues ranging from less than $100 million to more than $1 billion.

The folks at Kapost also made some necessary assumptions in the two aggregate marketing operations, one medium-sized and one large, that it used to build its study:

  • Number and kind of pieces of content produced (which range from blog posts to podcasts to videos)
  • Monthly recurring costs of content marketing and paid search
  • Average costs of leads produced through paid search and content marketing
  • Conversion rates, which were set at four percent for paid search and two percent for content marketing

The study, when run out to 36 months, found that paid search yielded a flat average of nine leads per $1,000 spent. However, content marketing produced more than three times the number of leads per $1,000 spent:

  • Due to content generation costs, content marketing’s cost per lead starts very high but eventually becomes relatively low
  • At 19 months, content marketing’s leads per $1,000 surpasses that of paid search
  • At 36 months, content marketing produces 31 leads per $1,000, more than three times higher than paid search

How is that possible, you ask? According to the study there are a couple of factors that contribute to the long-term success of content marketing. But there are also a few caveats.

Factors That Contribute to the Long-Term Success of Content Marketing

The study found that two main factors contribute to the long-term success of content marketing when compared to paid search: the benefits of owning versus renting media and the quick drop off in cost per lead.

Owning vs. Renting Media

In traditional marketing and advertising, marketers run campaigns that temporarily buy exposure by renting audiences from media outlets, such as TV, billboards, magazines, or even online with banner ads. When a campaign is over, marketers measure the results, modify for improvement, and run a new, modified campaign. Then they lather, rise, and repeat as many times as is allowed by the scope of their marketing strategy and budget. Paid search operates in much the same way.

However, content marketing is not a campaign. Instead, it operates in a reverse manner: content marketers start off by producing proprietary media, which they own, and then earn audiences for their content over time. Once an audience is built it keeps generating results without marketers having to pay to rent media.

Quickly Declining Cost Per Lead

When it comes to content marketing, the associated cost-per-lead graphic looks like a hockey stick, starting off very high but then dipping precipitously in the first few months of the initiative. In fact, content marketing’s cost per lead was found to fall 80 percent in the first five months. Now that’s a result we can all get behind.

Caveats for Successful Content Marketing Initiatives

The study also laid out a couple of caveats that need to be considered when comparing the long-term success of content marketing to paid search.

Content Marketing Isn’t a Campaign, It’s a Commitment

The first caveat of successful content marketing is that you have to be committed to the long haul. Unlike a campaign, you must build an audience to engage with the media you produce and own and then tap that audience for leads.

In fact, when compared to paid search content marketing requires higher upfront expenses and produces lower short-term reward. As the study shows, a commitment to successful content marketing must be made in terms of years, not weeks or months.

Content Marketing is a Vital and Dedicated Business Process

The second caveat of successful content marketing is that the commitment it involves requires a meaningful investment of capital and human resources. In short, content marketing can’t be treated like an experiment. Instead, it must be treated like a structured business process, with detailed planning, production and workflow, and distribution components.

Furthermore, the performance of that business process, and the results of content marketing efforts, must be measured and refined in a continuous, ongoing capacity so the content team can understand what’s working, what isn’t, and why.

 

Author’s Note

At Forthea, we recommend both paid search and content marketing as equally viable components of a successful online lead generation strategy. While each tactic has its benefits there is no one-size-fits-all digital marketing strategy and, therefore, no fast-food approach to paid search or content marketing. Each client and each prospect base is different and online lead generation strategies must be custom built to achieve the best, most cost-effective results.


Forthea
Forthea’s mission is dedicated to helping clients achieve their full potential online through superior marketing that’s delivered with unsurpassed customer service and professionalism.

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