As you sit down to plan the content calendar for the next quarter or year, the content marketing budget and its allocation seem like a fairly big challenge. Like other marketers, you’re probably thinking about budget allocation and how it can give you better returns to validate each expense.
Given the current scenario, it is not uncommon to have people question every marketing expense right down to the smallest detail.
After all, content marketing has a sizable budget requirement. But if you compare it to outbound marketing, you’re aware that content marketing gives you more traffic and better leads. This fact has a lot to do with the popularity of content marketing over the years and how consumers prefer being well-informed before making a purchase.
Of course, there are many other aspects of content marketing. But creating a content marketing budget sets things rolling with measuring your marketing results, identifying the levers in content marketing, and understanding how ROI calculation can be a hit and miss in some cases. We’ll also take you through setting marketing goals considering your content marketing budget and how factoring in the opportunity cost can accurately let you plan the budget.
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1. Metrics to measure your marketing results
Measuring your marketing results relies on tracking metrics like website growth, CAC, MQL, PQL, and SQL, customer engagement, and funnel performance. But not all these will give the big picture. To know if your marketing is on the right track, focus on two key factors of content marketing–increasing conversions and reducing expenses.
Conversions–Since your marketing costs are directly linked to acquiring and retaining customers, tracking conversion is critical. It will also allow you to track marketing ROI and its overall contribution to the content marketing budget.
Expenses–There isn’t a direct correlation between decreasing costs and increasing revenue. Instead, doing so can affect the quality of your content marketing output. Another myth is profit margins increase with an increase in sales. Vice versa is also true, whereby increasing revenue isn’t necessarily the path to higher costs or lower profits. Because of this nature of expenses, it’s essential to know the exact content marketing levers and how they actually help reduce costs.
Companies often use an expense report software to manage their content marketing and business spending. This could be an easy start to automate spend management, freeing up time to focus on what really matters.
2. Levers of content marketing
Content marketing helps you gain trust, build credibility and authority. However, it also comes to a point where you’re weighing the cost of each marketing campaign versus the results.
Production & Distribution Costs: While production costs are mostly predictable, distribution costs can make a big impact. You’re either distributing content on your own channel, paid media, or earned media at any point in time. Because of this flexibility to reach a wider audience, your distribution costs may vary depending on which media you pick. Content on your own media channels may cost comparatively lower than PPC, social ads, or influencer marketing.
PPC: PPC could cost a lot more than organic marketing because it offers faster results and reaches the right target audience. But if content marketing involves link building, that could be equally expensive since you’re trying to achieve volume or quality at scale.
In link-building, you’re investing a portion of your budget in reaching out to websites with high-quality resources making it easy for crawlers to improve your site rankings. Over time, this link-building will widen your reach, attracting the right audience to your campaigns.
Consider looking at the lifetime value (LTV) of each campaign. On average, CLTV is three times that of the customer CAC (Customer Acquisition Cost). To calculate the LTV of a campaign, identify the source of the customer acquisition. Do customers come from Email, Facebook, or Instagram? If so, calculate how many times they purchased from each channel to arrive at the LTV of a campaign.
Also, consider using a PPC management service if you want to improve the efficiency and effectiveness of your campaigns. This is particularly helpful if you are not up to speed with how to handle this yourself.
SEO: SEO could cost a lot in the immediate future but could bring leads over many months. Unlike PPC, where conversions stop the moment you stop advertising, SEO could give you great ROI long after you’ve published SEO-optimized content. Because SEO-optimized costs are lesser than PPC, it’s a long-term strategy that can take time to show results.
Irrespective of your choice of paid or organic media, the ideal way to go about budgeting for your campaign is to know what your returns are from the campaign and make sure that your content production & distribution is lower than that.
3. Challenges with calculating ROI
Marketing campaigns have many moving parts.
Multi-Channel Approach: Primarily, it is about attracting the right audience across different platforms. This could be exploring website content, launching a new blog, or social media content, infographics, podcasts, or webinars. Most marketers look at the individual results of each of these campaigns instead of the core metric of conversions.
By doing so, you’re reliant on campaign success, making it challenging to calculate content marketing ROI. It’s also one reason it’s not always easy to calculate its ROI if it is based on sales. If you do factor in sales made, the ROI will be lower than just a lead generated.
Omni-Channel Strategy: Sometimes, content can be a part of an omnichannel strategy that includes other forms of marketing assets well. These may consist of emails, videos, images, or sales letters. In such cases, you have to measure the immediate impact of the newsletter signup or the lead generated. Using these as the success metric allows you to track the right metric and not go by the overall sales.
4. How to set content marketing goals
Starting with content marketing goals can seem like an uphill task. Start small and begin by focusing on the targets. Use the metrics mentioned earlier to track these targets.
Set targets and track using metrics
Let’s say you want to create brand awareness, track signups and subscribers to your list.
Creating brand awareness may be a little vague and difficult to quantify. Instead, map it to quantifiable metrics that can be monitored. It could be social media mentions, video metrics, traffic, or search volume.
Next, list the numbers under each of these quantifiable metrics to know how your content marketing team contributes to the business goals.
Similarly, track signups and subscribers to your list.
Not all subscribers will convert, but they might contribute to another revenue stream. For example, health clinics investing in content marketing don’t expect all subscribers to be patients. However, it creates brand affinity and awareness, creating a parallel demand from business partners like technology and insurance companies.
Once you have identified your end goals or targets, place an LTV (Lifetime value) on each of them.
LTV on each target
The LTV will analyze the existing data set for brand awareness and check how customers interact with your business. It could be regular mentions, high engagement, or repeatedly accessing your website or social media via search. Then once you get this data, identify the difference in the first interaction and then in the repeat purchase. When you’ve identified the common factors that help them relate to your brand, it’s about upselling and increasing LTV.
On the other hand, when you’re chasing signups and subscribers, set the LTV value by assessing the overall income earned from email to the total number of subscribers on your list. To make it simple, simply check this data by each segment on your list to know the worth of each email segment and how it contributes to your email marketing income.
5. Create a content marketing budget
Once you have the revenue target in place, work on the budget by getting into the details. Break down each task to its last detail to understand the exact cost of content marketing. It will help your content marketing budget to align itself to your overall marketing strategy.
So if SEO is on your radar, then work it backward to know your exact cost.
- How many blog posts or pieces do you need to execute? Will a landing page be a part of this strategy? If so, how many landing pages do you need to execute it?
- Once your blog requirement is in place, how will you create it? If you’re hiring writers, how many will you need to execute it?
- Backlinks help in rankings, credibility, and building authority in your niche. Work out how many backlinks are required to hit the SEO targets.
If PPC is your goal check your analytics to know the best platform to execute it on, and then
- Identify what you want to achieve with PPC and if you’ll need to hire an expert for it
- Pick your demographic or target audience and how many visits you need to accomplish the PPC goal
- Work out the costs of tools you will need to produce your lead magnet
- Decide if you’ll do the keyword research or you’ll need to outsource it
- Assign the copy to an in-house team or outsource.
Once you have these in place, work out the PPC costs.
When creating a content marketing budget, make sure to note the time for each task, making it easy to track its completion and eliminate roadblocks. Also, budget for any tools or additional assistance that may come in at a later stage. This way, even if something comes up later, your budget isn’t affected by these unexpected costs but can accommodate it.
6. Things to watch out for while working out the budget
Working out a budget involves anticipating that things can get out of scope at times. In turn, it stretches your budget, increasing stress and also derailing projects. Here are some things to watch out for while working out the budget.
Budget Creep: Account for budget creep so that the marketing budget does not overshoot revenue. It could be getting more people on board to do the job, thereby increasing costs or awaiting extensions or approvals. Either way, budget creep is a thing to consider while budgeting.
Increased Prices: Things change from the time you create the budget to the actual content marketing execution. It’s likely the prices will increase. Don’t forget to factor in these variations and their impact while creating the budget.
Change in Project Partners: Project partners could plan to move in a different direction in between the projects. Consider this variance as a part of doing business and how it can affect your content marketing budget.
Lack of Tools or Resource Availability: Lack of resources to take the project ahead or an absence of the right tools could hamper the project’s success. Account for these and make it easy to keep the budget flexible in case of such instances.
7. Consider the Opportunity Cost in Budgeting
Even though you’re careful and account for budget creep, it’s likely that there are some things you can’t retain. Like lost time on hiring talent or the cost of choosing one strategy over the other. Also known as opportunity cost, this calculates the difference in the returns (actual or expected) between two choices. Often this means understanding whether your decision on people, projects, or costs was worth taking or could have given better results.
Once your budget is in place, be sure to know the opportunity costs of your content marketing budget. It will also help you see if you’re on the right path concerning projections, resource utilization, and implementation.
Conclusion
Content marketing budgets change. They undergo revisions, receive inputs from other stakeholders, and also face unexpected issues. What doesn’t change is making the budget more predictable and in line with your overall content marketing goals.
It begins by recognizing that metrics decide how your project grows, how content levers like conversions and expenses create the right expectations, and how calculating ROI may not always be possible.
What’s possible, though, is setting content marketing goals with targets and LTV and identifying your organic or paid content strategy path. knowing that budget creep eventually comes, consider a lack of resources or tools such as Simplifi Quicken to meet project deadlines. Also, consider unexpected changes like price increase or change in collaborations, to control any budget escalations. Factoring in the opportunity costs in your budget lets you understand if your content marketing strategy is worthwhile or needs fine-tuning as you establish your content marketing budget for the year.
