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Calculating the ROI of Content and Engagement Strategy
I often get asked, particularly by clients, what the ROI of content and engagement is. What is it going to cost, and what are they going to get out of it? This is always a tricky question to answer, but I’ll attempt to do so at the end of this post. First, some context.
Nothing in life is guaranteed…unless you’ve been working in advertising.
Content in old advertising was pretty simple: shoot a nice, glossy ad, pushing your product/service and then pay CPMs to distribute that content. Advertisers knew exactly how much that ad was going to cost to produce, how much it would cost to distribute and how many people the ad would (potentially) reach (“potentially” because impressions are not synonymous with engagements).
The Wild Web
Today’s content is a different beast. A good content strategy incorporates paid media, owned media, relationship media and SEO to generate earned media. None are mutually exclusive. And, the emphasis is on the engagement, not the impression.
Social Media
Notice I didn’t even mention social media in there? That’s because social media is ubiquitous across the aforementioned forms of media. Social media is a channel for paid media (e.g. Facebook Ads and Stories, Twitter’s Promoted Trends and Tweets, to name a few of the biggies). It’s a channel for owned media (e.g. Facebook Pages, Google+ Brand Pages, YouTube Channels, Tumblr accounts, Twitter accounts – these are all places to build an owned community). Social media is a channel for relationship media – my term for modern day PR (you can now identify who the top influencers for your brand are; many, if not all, will have a social media presence). Leverage these three media well, coordinated with a strong content strategy, and social media helps facilitate scaled earned media. But, please do not mistake social media as a siloed form of media.
The Brand’s Predicament
Now coordinating these media and solidifying one unified content and engagement strategy is difficult – particularly for Fortune 500 brands with large marketing budgets. That’s because each medium is often handled by a different agency or group. Paid media is handled by media agencies. The content for paid media is produced by the creative agencies. Relationship media is handled by PR agencies. You have a new breed of social media agencies doing some pieces of each (paid, owned and relationship media), while the PR, creative and media agencies are all fighting each other and the social media agencies for a piece of the social media pie. No wonder brands are confused.
Building A Newsroom
To help solve this issue, I’d like to see brands build something akin to a newsroom. This would be a cross-divisional/agency team focused on content and engagement strategy. They would work together to
- Identify the key existing and target audiences (i.e. consumers) for the brand;
- Identify what content is valuable to each of those audiences at different stages of the purchase funnel;
- Identify where (Facebook, YouTube, Twitter, blogs, TV, news outlets, etc.) and how (video, pictures, text, slides, etc.) audiences like to consume that content;
- Identify who the brands’ top influencers are; and,
- Then, assign team members and agencies to produce the appropriate content and distribute it through the appropriate channels (i.e. execute on the plan)
For more detail on the above bullets, see my posts “Content As A Platform” and “Building A Content Platform”.
Calculating the ROI of Content and Engagement Strategy
Now, I believe that social media and mobile technologies have empowered brands (large and small) to
- Access more specific data about their audiences;
- Produce and distribute a higher volume of content that is more valuable to their audiences, and do so more efficiently; and,
- Build deeper, longer lasting relationships with their audiences
With this in mind, I’d like to see brands and agencies use the following as a benchmark for calculating ROI
- calculate the average Customer Lifetime Value (= revenue x time [per month/per year])
- calculate Allowable Cost Per Sale (i.e. the amount your willing to spend to acquire a sale – e.g. 10% x CLV)
(Note: Jamie Turner does a great job describing Customer Lifetime Value and Allowable Cost Per Sale in this post)
With a successful content and engagement strategy, average Customer Lifetime Value should increase over time, while average Cost Per Sale should decrease over time.
I’d like to place emphasis on the words “over time”. While you can certainly run one-off social media campaigns, content and engagement are long-term initiatives that involve constantly listening, learning and iterating. You won’t see ROI tomorrow, or maybe even six months from now. Anyone that has ever started a blog and tried to build an audience/community around it will confirm that. But, I think a year in, you should probably start to see these effects starting to take place.
Are any of you building a newsroom in your organization? How are you calculating ROI for your content and engagement efforts? Would love to know.
Related articles
- Google+ Pages: Real-Time Platforms for Connected Brands (greatfinds.icrossing.com)
- The Content Strategy Burger [Infographic] (socialmediaexplorer.com)
- Infographic: The Content Strategy Burger (aht.seriouseats.com)
- How to Design a Content Marketing Strategy in 3 Simple Steps (e1evation.com)
- 7 Tips for Stellar Social Media Community Management (hubspot.com)
- How does an effective website content strategy benefit a business? (marketing.yell.com)
- A Deep Dive Into GetSatisfaction’s Content Strategy (contently.com)
- 5 Trends That Will Shape Small Business in 2012 (ducttapemarketing.com)
- Measuring Social Media ROI: 3 Things to Consider (socialmaximizer.com)
- Building a Content Platform (reciprocitytheory.com)
- Why Every Agency Needs an Earned Media Director (adage.com)
- How Can Startups Leverage Social Media? (currentindiaaffairs.wordpress.com)
Building a Content Platform
Yesterday, I discussed content as a platform. Today, I’m going to provide tips for building your content platform.
The 90-9-1 Rule
The 90-9-1 Rule is more of a benchmark, but it states that 1% of the online population is highly participatory (producing original content), 9% participates some of the time (usually curating content – taking an action with the content from the 1% such as commenting, sharing, reposting etc.) and 90% “lurk and learn” or do not participate (they consume the content, but they don’t take an action with it).
It stands to reason then that the 1% are the most influential people on the web, followed by the 9%. But, what about those that produce original content AND curate? They reach influence at scale.
Some brand publishers are already doing this; I touched briefly on the subject in my post, “The Valuation of Content”. The Huffington Post sets the bar with a mix of original content from its editorial staff, curated content where they write two paragraphs and link to another publisher’s content and content from third party bloggers. But, this alone, isn’t enough. They have treated content as a platform, using a social layer to encourage their audience to participate.
Optimization for Participation
One quick look at The Huffington Post homepage, and you can see they’re serving up, not just the latest content, but the most popular, the most discussed, “Hot on Facebook” and “Hot on Twitter”. Dive into an article, and you’ll find it’s easy to comment on posts and share the content through social media.
What does this mean? The Huffington Post are experts at getting their audience to participate, and effectively making content go viral. Their content gets engaged with, curated and broadly syndicated by its own audience because The Huffington Post makes it easy for their audience to find great content and engage/curate/syndicate.
How Can Brands Build a Content Platform?
Ten Tips for Building a Content Platform
- Don’t be a used car salesman (i.e. a good content strategy focuses on building a relationship and trust with the audience)
- Identify what kind of content your target audience finds valuable
- Is there a reoccurring complaint about your product/service? Offer up a piece of content that helps them troubleshoot the problem.
- Are they looking for guidance regarding a topic in which you’re company has domain expertise? Offer up content that can help them (e.g. tips for managing personal finances, a guide to eco-friendly living, considerations when selecting a safe car for your teenager, etc.).
- In what format do they like to consume that content (e.g. video, text, photos, slide presentations)?
- Where do they like to consume that content (e.g. YouTube, blogs, Instagram, Slideshare, Facebook, Google+, Twitter, Tumblr, etc.)?
- Select a product/platform on which to build your hub (WordPress, Facebook, Google)
- Add a social layer (commenting and sharing functionality), if it doesn’t already exist. A great tool to incorporate here is Disqus, which is a comments community, serving as the comments engine for over 1MM sites and has almost 60MM users.
- Produce original content that meets your audience’s needs.
- Curate content that adds value to your original content and to your audience
- Engage with your audience, as they comment and share on your content
- Listen and improve
The image below represents the type and amount of content you should produce against the 90-9-1 rule. In the end, you want to product content that instigates your audience to take an action, including creating more content for you. As a brand, you likely won’t be able to produce enough good content yourself, in-house. And, it’s not your job to either. But, if you use content as a platform for your advocates to create more content about your brand, then you’re reaching scale both in volume of content and syndication of your content.
Related articles
- AOL Buys The Huffington Post (sixestate.com)
- Content As A Platform (reciprocitytheory.com)
- A Case for Social TV (reciprocitytheory.com)
- Unpaid Bloggers Uprising: The AOL / Huffington Post Lawsuit (sixestate.com)
- The Valuation of Content (reciprocitytheory.com)
- Top Eight Reasons B2B Marketers Use Content Curation (e1evation.com)
- 3 Ways Content “Curation” Can Boost Content “Creation” (logicamp.wordpress.com)
- Top Eight Reasons B2B Marketers Use Content Curation (mktg2bizexecs.wordpress.com)
- A Marketer’s Guide to Content Curation (hubspot.com)
Content As A Platform
Most advertisers see content as a product – something they can produce and release to an audience without third party iteration. Advertisers often pay six to seven figures to produce that content. And, in traditional media, that’s OK because you can pay for X number of impressions (i.e. X number of people that might have seen your content) to validate the high cost of production.
But, if you want to capture earned media through social media (there’s a distinction between the two, which I explain here), then you must think of content as a platform. A platform is a technology platform upon which additional technology (such as applications) can be built. Your iPhone or iPad or Android are built on platformed OS (operating systems), upon which third parties can build applications (or “apps”). Both Apple and Android have robust app ecosystems that are much of the draw for buying their products in the first place.
Any social media technology company worth its salt is platformed. Facebook is a platform, which enabled the unprecedented growth of a little gaming company called Zynga. Twitter is a platform. Companies like TwitPic and TweetDeck (now acquired by Twitter) were built on Twitter’s platform. YouTube is a platform – quite literally for content.
Why build a platform? Because Steve Jobs only comes once in a lifetime, if that often. Steve Jobs had an uncanny ability to predict what the consumer would want in the future and be the first to offer it to them. He built products people didn’t know they wanted. But, most people aren’t Steve Jobs.
The companies that build platforms understand that there is power in the crowd. Opening up your platform through APIs, enables the company to harness the passion and power of third parties to build upon and improve your technology. Steve Yegge explains this brilliantly here.
Content shares the same DNA. There are few people/companies/teams that can produce create content. Even in Hollywood, content created by the most premium content producers and powerful distributors doesn’t always make it. We see it every weekend at the box office and every fall and spring when TV networks release new shows. This is even more apparent with the top print and digital publishers that are competing for pageviews, video views and engagement. And, these are all content producers that produce with the audience in mind. Advertisers, on the other hand, produce with the brand in mind. With content, as with platforms, the power is in the crowd.
The ease content creation and distribution on the social web has empowered individuals to rival even the most respected premium publishers. The mid-long tail of content publishers is vast as well. And, even the just the socially active individual has a network (Facebook, Twitter, Google+, etc.) through which to create, engage with and syndicate content.
Treating content as a platform through which you can instigate participation, conversation, engagement, curation (i.e. the creation and syndication of more content) will enable publishers to reach scale
Tomorrow, I’ll discuss the 90-9-1 rule and offer up 10 tips for building a content platform.
Related articles
- A Case for Social TV (reciprocitytheory.com)
- 8 Tips for Leveraging Platforms for Marketing [@InboundNow #37] (hubspot.com)
- Socialtype™ Launches Gaming Player Acquisition and Rewards Platform across Social Networks (prnewswire.com)
- Occupy Wall Street Provides Showcase for the Best Free Citizen Journalism Tools (savings.com)
- Become a Content King with Ideas from the Ultimate Content Creator (creativeconsiderations.wordpress.com)
- Indian Government Pressure Facebook, Google, Twitter to Censor Content (searchenginewatch.com)
