Where is the ROI in content marketing?

Joe Pulizzi of the Content Marketing Marketing Institute gives his take on the state of content marketing

Whether videos, blogs, infographics or ebooks, content is now being consumed on an unprecedented scale. And in our multichannel, multi-device, always-on world, that means content represents an exciting opportunity for brands to make an impression on the customer during the product purchasing process. Little wonder, then, that content marketing has become such big news.

In fact, the buzz for content marketing reached such extraordinary levels in 2014, that it led some to question whether interest in the discipline had reached its peak. Nonetheless, evidence suggests that there could still be plenty of growth left yet.

The Content Marketing Institute (CMI) recently conducted a research on content marketing in the UK, and found that 85% of respondents use content marketing, with 45% reporting they having now created a dedicated content marketing team. And while content marketing was found to account for an average of 26% of over marketing budgets, this number is set to rise in the coming years – 64% of respondents reporting that they will spend more this year.

Joe Pulizzi, founder of the Content Marketing Institute, says:

“Whether you’re looking at UK, North American or Australian research, the number of marketers that are going to spend more on content marketing over the next 12 months is well over 50%. I really anticipate that in the next decade you’ll see budgets for content creation, promotion and distribution get to 50% of overall marketing budget, because as brands start to build out their own content departments and content factories and integrate it, they will really start to understand it and build audiences ongoing, so they will need to invest more. The majority of money still goes to paid media – but content marketing is catching up.”

So how is this growing volume of content investment going to be spent?

Certainly there are increasing efforts to drive personalisation in content marketing, in an effort to be more impactful and engaging. But there are also signs that marketers are increasing investment to integrate content into the brand experience. To use content strategically requires it to be placed within a wider context of how it engages customers and how it supports a brand. And companies are keen to explore the power of this, says Pulizzi.

“We’re in an era of creating customer experiences that live outside of the products and services we sell,” he explains. “Traditionally, marketers have focused on promoting a product/service and having the customer experience live within the product/service that is sold. But now we’re seeing a range of initiatives – from in-person events, to digital platforms like Intel’s iQ programme, to initiatives such as Patagonia’s sustainability drive – that are creating value and experiences outside of what is being sold.

“That is a huge paradigm shift. It is no longer just about thinking about what is being sold, what to price it at and how it’s going to be promoted. Now it’s about trying to find out the needs of the customer and how there can be more engagement with them ongoing.

Take Intel iQ for example, you are not hearing about their products, they are talking about innovation. They are trying to position themselves as credible expert around a particular area. You’re going to see a lot more of that over the next couple of years.”

Where is the ROI?

So with little sign that investment in content marketing is going to slow, the question needs to be asked: does it deliver a return? Is content marketing really money well spent, or is our judgement being clouded by hyperbole? Certainly there is strong evidence that content marketing can deliver leads if companies are active.

Research from Hubspot has shown that businesses with more than 200 articles on their site’s blog have over five times the number of leads than those companies with less than 10 articles.

While other studies suggest that not only does content marketing cost significantly less than traditional marketing methods (on average 62%), but it also generates around three times as many leads in the process.

But of course content marketing isn’t all about seeing blog reads and video view turn directly into sales figures. It’s also about building brand awareness, and telling a story, and it has the potential to keep your current customer base informed and intrigued, whilst also gaining new customers along the way, and statistics suggest that 70% of consumers prefer getting to know a company through a range of articles, instead of blatant advertisements.

All of this sounds extremely promising, but to conclude that content marketing is therefore some kind of branding nirvana, delivering big bucks for a modest investment, would be a grossly distorting reality. Indeed, the CMI study reveals that only 42% of those questioned in the CMI survey rated their organisation as ‘effective’ at content marketing.

Pulizzi notes: “You could ask about the effectiveness about any type of marketing and I think you’d get about 50/50 – content marketing isn’t any different than any other marketing that companies are struggling with. Marketing is tough!”

However, he adds: “That being said, content marketing is not easy. It’s very difficult creating content on a consistent basis, and the reason why most content marketing programmes fail is not actually because of the quality of the content, it is because it stops or is inconsistent. Most brands are still very campaign-oriented, they don’t understand that building an audience and building a relationship with content takes a long time. Just ask any publisher out there.

“But this is difficult for brands. Look at the Verizon initiative Sugarstring – they launched the platform and then two months later they stopped it! There’s no publisher on the planet that would launch a media platform and then stop it after two months. It doesn’t happen. Because you naturally know that you’re in it for at least three years to build an ongoing audience. Brands don’t think that way. We think in six, nine or maybe 12 month campaigns. Enterprises don’t have any patience because they want to see immediate impact.”

And there are other fundamental problems that make successful content marketing a challenge.

“The current set-up of enterprises does not make any sense when it comes to content creation. There is a siloed structure and a real lack of communication in the organisation, which is why you are starting to see companies like Kraft building a centralised content and data unit that is working with all the different products and brands in the organisation.”

Strategic shortcomings

But arguably the biggest problem of all are the strategic shortcomings of organisations, with the CMI study revealing that only 36% of organisations have a documented content marketing strategy.

“It is very tactical – somebody in the organisation says we should do a blog or be on Facebook, and they don’t think about the business reasons behind it, and put together a documented plan,” says Pulizzi. “Nearly all media companies and publishers have editorial mission statements. How many brands have editorial mission statements for their content platforms? None of them.”

Of course, with no strategy in place, brands can expect to encounter difficulties further down the line, not least of all when it comes to measuring the ROI of their content marketing efforts.

“It’s hard to measure marketing, anyway. Marketers are always measuring the wrong things - for example, the biggest measurement of performance indicator of success for marketers is website traffic, which in and of itself is a meaningless metric unless you match it with other goals and objectives. But if you don’t have a documented strategy, I can tell you for sure that they don’t know why they are doing it. Are they doing it to drive sales? Are they doing it to save costs? Are they doing it for loyalty and retention purposes? And that’s why they end up looking at website traffic – because if you don’t have any structure around why they are doing what they’re doing, they don’t know where else to look.”

All of which provides a little more insight into why some observers had suggested that interest in content marketing may have peaked in 2014. If brands were beginning to understand the scale of the undertaking ahead of them, perhaps the faint-hearted would start to desert the discipline in drives. But with budgets still rising, it would appear that most brands are in it for the long haul. So why is content marketing still so appealing, even with its accompanying challenges?

“Marketers need to keep up with consumer behaviour,” emphasises Pulizzi. “50 years ago, consumers didn’t have a choice - we could advertise to them, we could get their attention. Now, consumers are in complete control and what are marketers supposed to do? If you just think about what has happened in television, it is very difficult to interrupt people’s time and get their attention when consumers can completely ignore you at any stretch. This is forcing marketers to start focusing on their own channels so that maybe they don’t have to advertise.

He continues: “There have been lots of questions about whether the buzz for content marketing is over, because 2014 was a year when everybody was talking about it. But most companies are still in the early stages, even though content marketing has been around for 100+ years. Google and social media have really spurred attention around content marketing, because none of that stuff can be successful without content creation. And now you are really seeing brands organise around this - though it is going to take years for us to see the change. Businesses have been building organisations in certain structures for years, and now we’re trying to cut through the silos around content. So it is going to be messy and it is going to take a long time. But we are going to see some interesting wins and losses in the next couple of years as marketers get into it.”

Editor's note

For specific guidance on measurement of content marketing ROI see our article and guide from Stephen Bateman:

• A framework to  measure content marketing ROI
• Guide to measuring content marketing ROI