By Arnie Kuenn

The concept of content marketing has been around since 1895, the year John Deere started circulating its magazine, The Furrow. Since then, many brands have proven the process works. But quantifying a return on investment (ROI) in the new frontier of online marketing can be challenging. There’s rarely a 30-day turnaround on investment, which creates confusion and no small amount of anxiety. When content does take hold, however, the benefits can be very fruitful — and measure you must.

Before you drill down to measure an asset’s content marketing ROI, you need to examine and measure the value of your content marketing efforts as a whole. Marketing-related key performance indicators (KPIs) abound, but unless you understand which ones are important to your brand, you’ll find it nearly impossible to measure success.

Useful content engages readers, and its value goes far beyond the cost of creation and distribution. Yet every marketer must ultimately speak the language of executives, so you need to prove value with metrics.

What makes valuable content?

Great content:

Presents a personality, allowing your company to reach prospects and customers on a more personal level through interaction. Content can offer opinions and advice, but even more important is your willingness to respond to questions and honour requests, which helps people to relate to your content. Content then becomes a two-way conversation, rather than a one-sided advertisement.

Attracts clients and search engines with high-quality, optimised content. Great content draws the attention of potential clients and wins higher ranking from search engines.

Builds loyalty and trust by addressing questions and concerns with useful, lasting information. Content builds an audience and develops loyalty among its followers.

Establishes authority through consistent, high-value information – the type that clients seek over time as a trustworthy source of intelligence on key issues.

While these value concepts are important to understand, they offer little extractable data to help you calculate content marketing ROI. That’s where consumption, lead-generation, sales and sharing metrics come into play. (These concepts are also described by Jay Baer of Convince and Convert in his post, The 4 types of content metrics that matter.)

Determine which of the following is most important to your executive suite, and start measuring those KPIs within your organisation.

Quick tip: Content marketing is different from other forms of online marketing in that it does not always deliver ROI quickly. It may take weeks or months for a piece of content to be discovered by people and the search engines. 

Consumption metrics

Use web data from programs such as Google Analytics to reveal consumption metrics, which show the value of your content efforts. KPI metrics may include total visits, unique visits, downloads, time on site, cost per visitor, and bounce rate. The key here is to look for measurable data that can help you determine how often content is consumed, as well as the path readers follow to find that content. For example, maybe a visitor came to your site to read a blog post, then followed a link to your services page, then clicked to your “about us” page, then filled out a “contact us” form.

These metrics are directly tied to the value of your investment. It’s likely your other marketing channels are hitting certain baselines, such as cost-per-click or cost-per-action; look for similar ways to attribute content marketing value as you would with paid search or other marketing campaigns.

A wide array of website metrics can be used as key performance indicators of content. Ensure your site is set up to measure them, and look at data weekly, monthly, quarterly and yearly for an accurate representation of the return on your investment.

Lead-generation metrics

One way marketers attribute leads to content is by using lead-capture forms (even restricting a piece of content to those who complete it). The form may ask for a name and email address to sign up for a newsletter, or it may request even more information. It’s up to you and your team to close this lead, but the content itself acts as the carrot.

The second way marketers attribute a lead to content is by tracking the originating source of a lead. A visitor may happen across a great video you developed, prompting them to fill out a lead form. That content was consumed and helped produce a lead.

Regardless of the method, it’s important to set up your site with the correct goals to track and measure leads and attribution. Cookies can also track visitors on your site and indicate which pages they viewed prior to filling out the form – even if they don’t do so on their first visit.

Ensure your site is set up to track these events and understand the value each lead provides to your company.

If a piece of content costs $3,000 to produce and you spend $4,000 to promote it, your total investment is $7,000. Say each lead you get has a value of $70: to break even on your investment your content piece must generate 100 leads. If you have never determined your lead-value price, it’s highly recommended you do so.

Sharing metrics

Social media metrics are less easily quantified as a dollar value but they  are still important. Social networks generate traffic for your content assets (and tie in to consumption metrics, among others). But how can you really determine the value of a “like” on Facebook or a “+1″ on Google+? These social points are certainly important, but in a discussion about content marketing ROI, it’s hard to assign a dollar value.

Social profiles provide value for customer relationship management, customer service, and customer engagement, among other purposes. The particular sharing metrics important for the ROI discussion depend on your chosen KPIs. For example, you may focus on referral traffic and conversions on your site, or simply gain an understanding of how consumers share your content, which provides value in other areas. When thinking about the return on your content investment, don’t ignore sharing metrics, but take care not to overvalue them either.

Sales metrics

The true dollars and cents of content marketing come from sales metrics. While the rest of the metrics mentioned here are important, sales metrics are the easiest aspect of the ROI equation to understand.

Review close rates. I don’t just mean conversion rates on your site, but actual sales close rates as reported in your CRM system.

Sales conversion rates are an excellent tool for proving content marketing ROI, affirming whether or not your prospects are turning into paying customers. If your CRM system and processes do not currently allow you to track a visitor all the way to the end sale, it’s imperative that you figure out how to fix this.

Ensure your system can track what path a visitor took to fill out a lead form, and transfer that data to your CRM system or sales software. Over time, this should help you to see what type of content consumption is important to that final sale. For example, is it how-to videos, white papers, or product comparisons that seem to influence sales most?

With data in hand, you can attribute value to the content pieces that helped to close that sale. You can attribute project revenues and profitability of that customer to the content responsible for bringing the customer in. In many cases that type of data is hard to track down, so value isn’t so easily correlated to a single asset. Don’t let these types of loose ends continue to hinder you; start tracking the information, and make informed observations on the ROI of your content marketing.

Quick tip: Can’t measure it all? Then focus on web traffic and leads (or revenue) first. If your content is generating more traffic, leads and revenue, then all the other metrics are secondary. 

Additional metrics

Consider other cost savings related to content marketing – savings that may not be easy to capture in your KPIs. For example, leads from content (such as a potential client downloading a free guide in exchange for his contact information) are better-qualified sales leads.

Less time is spent actively pursuing the sale because your prospects sought you (and are further along in the consideration cycle.) Your customer service costs may also come down. Online FAQs or other resource pages can quickly and effectively answer many questions tying up customer service reps. Take a hard look at your business and determine how content marketing can make a positive impact on your bottom line, as this can factor in the overall cost-effectiveness and success of a content marketing strategy.

Content marketing has proven time and time again to be a valuable asset to any marketing plan. With proper strategy and implementation, proving the ROI to executives in the business can be accomplished. It may take some time, but once tracking is set up, you’re sure to see your investment pay off.

This article originally appeared in the February 2014 issue of Chief Content Officer. Sign up to receive your free subscription to the bi-monthly magazine.