By Robert Rose published September 13, 2015

Is ROI Really What You’re Looking For?


There’s a lot of talk about return on investment as a marketing metric … but ROI is inherently flawed for campaign-based marketing. A new look at ROI might be just the remedy we need to build a case for content marketing.

I’ve been on a journey over the last few months, exploring the history of marketing and measurement. I feel a bit like Indiana Jones. The books I’ve bought are long out of print and when they arrive from remote booksellers across the world – sometimes tattered and worn – it feels like I’m discovering artifacts from a lost world.

Marketing-performance measurement is not a new challenge. It’s not as if we lost something we once had in the 1960s. Marketers have been talking about the struggle to measure marketing’s performance for as long as it’s been around. Mercantilist John Wannamaker famously said in the late 1800s, “I know half my advertising is wasted; the trouble is I don’t know which half.”

Consider the last line from a 1964 article, The Concept of the Marketing Mix, by Neil Borden, then-professor emeritus of marketing and advertising at Harvard Business School. He was discussing the highly desired but unfulfilled quest for the “science of marketing” and concluded with:

We hope for a gradual formulation of clearly defined and helpful marketing laws. Until then, and even then, marketing and the building of marketing mixes will largely lie in the realm of art.

I very much appreciate the “even then” part of that last sentence. I suspect Professor Borden knew that looking for “laws” would be a frustrating journey.

Skip ahead almost 25 years and consider a comment in the book Marketing Performance Assessment from 1988. In the opening chapter, called “The Philosopher’s Stone,” the authors write:

The assessment of marketing performance, often called marketing productivity analysis, remains a seductive but elusive concept for scholars and practitioners alike. It is elusive because for as long as marketers have practiced their craft they have looked unsuccessfully for clear, present, and reliable signals of performance by which marketing merit could be judged.

In other words, throughout the last 100 years, we have felt this compelling need to tilt the scales from art toward science; we have held up business laws that, if obeyed, would guarantee success. We really want the algorithm. And the truth is, we never get there.

In varying degrees over the last century, this “science” has been reduced to three little letters: ROI.

From the Mad Men era forward, we’ve been exploring ways to extract a return from the investment of marketing. Whether called simple ROI (return on investment), ROMI (return on marketing investment), or even ROC (return on customer – thank you Dr. Martha Rogers and Don Peppers), the goal has been the same: Maximize the profitable return on the investment in marketing effort.

But there’s a problem.

Maximizing ROI has been, and always will be, the wrong goal for campaign-oriented marketing. Yet ironically, focusing on ROI just might be the right approach for content marketing. Let’s take a look at why.

What are we really asking?

First, why is ROI the wrong metric for campaign-oriented marketing? Ask yourself: Are you trying to understand if the effort did work or whether it will work? If the former, you must capture measurements that quantify whether you met your goal. But let’s be clear, goals such as incremental sales revenue, cost per lead generated, cost per sale generated, and cost of a new customer are not returns on an investment; neither are they even goals. These are accountability metrics toward a particular business goal (e.g., higher revenue, decreased costs).

Thinking of these things as return on investment is a bit like thinking of how your investment in gasoline produces a return on your job. Gasoline, like many marketing tactics, is ultimately a cost, not an investment; its fluctuating price has no bearing on how it may boost performance in the short term (e.g., gets you to work faster than walking). And it inherently only generates a short-term benefit.

Each marketing campaign is a new tank of gas, a project executed in a short time frame that we evaluate as a one-time return on that effort. Stack enough of those together and you can create a smart strategy.

Campaign-focused marketing is a recognized cost of improving the short-term performance of our business. We can talk much more about this point, but for now let’s move to the second question we need to ask: Will it work?

This question is more common for those focused on content marketing because its practice as a marketing function is new to so many. When ROI comes up, it’s usually because content marketers are being asked to make a case for success.

This brings us right back to the first problem. Our only frame of reference to make that case is our past performance. This is a Catch-22. In short: You’re being asked to “tell me what you know” to prove “how certain are you about this new thing you want to do?” Yeah, it’s a guess.

But here’s the larger problem with ROI. It encourages us to underperform.

If marketing’s mandate is to maximize ROI, you have every incentive to never do anything new at all. Look at it this way. Let’s pretend your mandate is to maximize marketing’s ROI percentage. If I spend $200 in marketing to get to $250 in revenue – then technically my ROI is 25 percent. But if I spend nothing to make $100 – my ROI is 100 percent (really it’s infinite). To maximize my marketing ROI percentage, it’s actually smarter for me to spend NO money and hope for one sale than to spend some money and hope for many sales.

This is an extreme example but it holds true over time. As you increase market penetration, the rate at which you win new customers slows. Plus, because you’re spending a portion of your marketing budget on return sales, your marketing ROI – because it’s a ratio – will eventually decrease. That’s why applying ROI to a process that is ultimately a cost, not a long-term asset, can be treacherous at best.

So, if ROI isn’t the answer for campaign-based marketing, why might it be the answer for content marketing?

Think like a product, not a campaign

We must take a different approach to content marketing from the beginning. As we discussed, a traditional marketing campaign is a project – the success of which we will measure once it is complete.

But content marketing is a different model. The assets we create should support multiple fronts. A blog, a print magazine, a white-paper program, a webinar series, a television series – these are assets that can generate many different types of company value over time.

Let’s take some different content marketing initiatives we might want to deploy. As we think about building a business case, we may ask a number of simultaneous questions:

  • How does this new influencer white paper and accompanying video add value to the spring direct-marketing campaign, but also the value of the Y product release and Z customer relationship community?
  • What’s the value per subscribed audience member, including the rich data derived from each individual? How does that value increase over time as the audience and the amount of data become larger and richer?
  • How does the value of each content asset increase or decrease over time? How does our resource library value increase as we add the 25th evergreen white paper? How does the addition of the 25th white paper add value to those that preceded it?
  • How does the creation of media-related products increase the value of our company over time by establishing us as a differentiated brand?

That last question is the most important. In the most extreme example, we can ask how valuable is Red Bull with Red Bull Media and without. As of May, Red Bull was the 76th most valuable brand in the world according to Forbes. I contend it’s a fundamentally more valuable company with its massive media asset. How much value do the HubSpot blog and accompanying Inbound event add to HubSpot’s overall business? On their own, as media properties they would generate millions of dollars. I contend these are valuable, long-term assets of the company.

Campaigns are a cost that provides value at a moment in time. Content marketing is an investment that, if done well, provides increasing value over time.

Don’t cross the streams

To measure effectively, we must know what we’re solving for. If our thought leadership asset (e.g., a white paper) is simply a supporting creative asset in a direct-marketing model, then measure it as such. It is a short-term, campaign-focused investment built to provide short-term benefit. And there’s nothing wrong with that.

But content marketing is different. If done right, it looks much more like a product than a campaign. It deserves its own investment model … and yes, it might finally be time to measure content marketing based on a true ROI model.

This changes the entire conversation about measuring content marketing. We still will answer the questions “Will it work?” and “Did it work?”, but the answers will be based on a much different premise. The former will be based on our ability to treat content as a long-term asset that builds value over time. The latter will be based on our ability to get beyond ROI and simply measure our progress toward meeting business objectives in time.

The simple truth is: Content marketing is not advertising. Despite whichever half might be working best.

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

Calling all CMOs and marketing executives: Join Robert Rose and 40 of your peers at our CMI Executive Forum on March 10-11 in Las Vegas. Leading brand marketers will join together to discuss the state of enterprise marketing. Register today!

Cover image by Joseph Kalinowski/Content Marketing Institute

Author: Robert Rose

Robert Rose is the Founder and Chief Strategy Officer of The Content Advisory - the education and advisory group of The Content Marketing Institute. As a strategist, Robert has worked with more than 500 companies including global brands such as Capital One, Dell, Ernst & Young, Hewlett Packard, and The Bill & Melinda Gates Foundation. Robert is the author of three books. His latest, Killing Marketing, with co-author Joe Pulizzi has just been released. His last book, Experiences: The 7th Era of Marketing, was called a “treatise, and a call to arms for marketers to lead business innovation in the 21st century.” You can hear Robert on his weekly podcast with co-host Joe Pulizzi, "This Old Marketing”. Robert is also an early-stage investor and advisor to a number of technology startups, serving on the advisory boards for a number of companies, such as Akoonu, DivvyHQ and Tint. Follow him on Twitter @Robert_Rose.

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  • erict

    I love this article, and have been wishing for it for years. ROI has become THE hitch to which so many marketing organizations are sadly stuck, causing them to do nothing new. It’s time for a new look.

    • Robert Rose

      Boom! Thanks for that…. So, very glad to hear that it resonated.

      • Amol Tolbande

        It’s very good point u made clear all doubt in ur article & replying to those queries

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  • Grannelle

    Excellent thoughts here; the difficulty it would seem is in the quantification of value. It’s been said (I can’t remember by whom) that we may as well ask, “What is the ROI of your grandmother?” Certainly there is benefit in the attribution of effort to marketing endeavors, and being able to point to numbers is helpful. But ROI is an economic indicator and, as pointed out in the article, much of marketing in all forms largely remains subjectively assessed. Great read; thanks for sharing!

    • Robert Rose

      Yup… this is a great point… Too often analytics and data are used as “proof of life” instead of metrics that help us improve a process… Thanks for the great comment…

  • Jim

    Am I the only one who sees a leverage point between traditional advertising and content marketing? My local mass media company is reimagining itself as a content promotion company, using premium content ctas to drive immediate results long before the slow build of online promo takes hold. Pretty simple, really, if siloed marketers could only connect those dots.

    • Robert Rose

      Jim… you’re certainly not the only one… There’s a great application of content marketing within a paid media strategy… Great thoughts.

      • Jim

        Thanks, Robert. Really value your “this old marketing” world view.

  • Paul Mattioli

    This is a great read – one that every courageous marketer needs to take to their leadership when budgeting or put in the position to have to defend themselves which is all too often the case. In my role selling B2B media & data and marketing solutions to marketers I see everyday the pressure put on end results with no regard for well conceived and delivered campaigns. The buyer’s journey is find them and close them or you’re wasting money… Thanks for this Robert ROse!

    • Robert Rose

      Thanks for that Paul…. It’s a great point. I’m a great fan of Campaign-based marketing. It’s just a different approach than Content Marketing – and the investment model is different. We can do both successfully – but only after we recognize the difference.

  • John Chijioke

    You are missing the point a bit. Eventually it all boils down to data. And data you must. It might be helpful to rephrase the word Marketing’s ROI as Marketing’s marginal ROI for the organisation or Marketing’s contribution to ROI. Also it could be said to be a misnomer as it would be wrong to even ask of an ROI of Marketing as that can only happen where there is a form of revenue in sight generated from the Marketing department as a business unit. Since Marketing is part of the total cost you can easily see why that argument is not very clear.

    All in all for most Marketers it would be more appropriate for them to partner up with their colleagues in finance when trying to do this calculation as IBM’s survey report of over 1700 marketers suggests to do.

  • DanielHochuli

    A brilliant article, Robert. We need to suspend out belief in ROI as the primary measurement for success.

    Companies like Red Bull, as you mentioned above, does this. They sell soft drinks, yet their YouTube channel does not directly push customers to that goal. In fact, all their YouTube channel does is nurture an audience with entertaining content. Many of those who subscribe to the Red Bull channel are only there for the videos, not the brand’s product. If Red Bull’s attitude was that only ‘customers’ matter, then we would not be seeing their great content.

    The way I look at content marketing is that certain channels should target your loyal customer base, while other parts should nurture those non-customers. By nurturing this audience, you have created value for the brand in a space where a monetary ROI is not applicable. Therefore, to target all your marketing efforts to an ROI benchmark is flawed.

    • Robert Rose

      Thanks Daniel…. Appreciate that… And yes – but the other idea here is that Content Marketing is, indeed, a true investment (when done well). To your point – many only go to Red Bull Media House for the videos (not the product) but Red Bull derives other value from those people. For Red Bull that comes in the way of revenue (They actually license their content for dough) and from data they can glean from content consumption. This is something that other content marketers can apply to their own strategies.

      It doesn’t have to be revenue, per se, but can be other ways to realize a return on their content investment. It may be “better insight”, “more effective paid media spend”, the ability to have an in-house consumer research focus group and on and on… They just have to look beyond the traditional measuring methods of campaign based marketing.

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  • Mark W. Schaefer

    I respectfully disagree with most of this post.

    For marketers to be successful, we have to speak the language of business. And that language is ROI. So we need deal with it, not try change the language or make excuses. “Gee boss, you don’t understand” is not a viable strategy that is going to lead to organizational support for content marketing … or anything else.

    The problem faced by marketers you quote here from the 1980s and older is that they had no data. We have data. And while calculating ROI may be elusive in the short term, leading indicators are plentiful. There is no excuse not to measure and we must measure in ways that align precisely with the organizational’s goals.

    Last week I presented a more rational model on my blog. The challenge is not measuring ROI but WHEN to measure it. This is the big dilemma — as you correctly state it is highly unlikely that yoiu will realize ROI out of the box. The first achievement realized by most content marketers even in the beginning is awareness. That is a legitimate goal and and a reasonable measurement for awhile.

    But after a period of time, that is not enough and you need to look at deeper measures or progress such as subscriptions and leads. And finally, at some poiint in the future (it might be a few years), you must be able to figure out how this is driving the bottom line. There is simply no way around this. ROI and sales is NOT a stand-alone measure that is somebody else’s accountability. Of course this is a marketing accountability and we need to embrace it not shun it. It is our job to drive profits. (BTW your ROI definition above is incorrect as it should account for financial gain, not revenue).

    I know it is tempting to adopt a stance of “measuring ROI is hard so let’s excuse ourselves” But you and I simply can’t do that and be credible in business today. Every single marketing function MUST be aimed at increasing shareholder value or it should be dismissed. Without valid metrics showing we are heading in that direction — in the language of the business — content marketing is nothing but fluff.

    • Robert Rose

      Mark, thanks for the comment, and for stopping by. I’m actually not sure if we agree or disagree since your objections have really nothing to do with the point I’m making. This is, most likely, my fault in my unclear writing.

      Having said that, first of all – I would say that it’s our *responsibility* to change the language of business. If we’re going to evolve the process of marketing it’s what we DO. Secondly, I’m hardly suggesting that people TELL their boss that they don’t understand.

      I’m suggesting that those that want marketing to lead their businesses must change what they DO in the business – otherwise simply be relegated to producing more and more collateral.

      Secondly, more data solves absolutely nothing. More data, alone, has not made us any better at marketing. If you look at Marketing and Advertising as a percentage of GDP – it’s never risen above 2% in the last 100 years. More data should have given us every reason to spend more – and we simply haven’t. In fact, the IAB has just this year come out to say that 50% of digital ads go unviewed – and with Ad blockers and browser issues that 70% viewability for those ads is “all we can hope for”. John Wannamaker from the 1800s would feel right at home. Instead of saying 50% of my advertising is working, I just don’t know which half – he’d say 50% of my advertising is working – and the other half isn’t seen or is blocked.

      Now is data an effective tool for us? Of course it is. if you read the second half of my post, you’ll se that’s exactly my prescription. That actually data can become a VALUE that is derived from an investment in Content Marketing. Which gets to your last point…

      I have no disagreement when you say that we MUST look at deeper measures of progress such as subscriptions and ways to figure out the bottom line. That’s the whole point of the second half of my article where I say ROI (as a concept) is a perfect match for the INVESTMENT of content – with multiple lines of value. I also don’t disagree with your concluding remark that all marketing functions MUST be aimed at increasing shareholder value. Where did I say it didn’t?

      My only distinction – and the entire point of the post – is that the measurement of campaign-based marketing spend is exactly that – an EXPENSE efficiency. And that Content Marketing (when done well) is actually an INVESTMENT – something that should increase value over time. If we continue to look at the asset of Content Marketing simply as an expense efficiency – we are doomed to Content Marketing simply being an alternative form of marketing collateral.

      I don’t want that – and I’m more than willing to suggest a change to the language of business to evangelize that idea.

      • Mark W. Schaefer

        I appreciate the effort and thoughtfulness you put into your response.

        Regarding your quotes:

        ** I would say that it’s our *responsibility* to change the language of business.

        The language of business (as expressed in measurement in my comment) is the language of business. Changing the language of business measurement is like trying to change the language of France. I think the role of marketing is to understand the language of business and find ways with the new technology we have to serve it on those terms.

        ** more data solves absolutely nothing. More data, alone, has not made us any better at marketing.

        We are on different planets on this one.

        ** 50% of digital ads go unviewed

        Advertising is not necessarily marketing. The fact that companies have been lazy in responding to ad blockers etc seems irrelevant to a discussion on how data impacts marketing strategy and its effectiveness.

        I think the ability to view content as a product that stands alone and pays increasing dividends over time is not applicable to the vast majority of businesses out there. The problem in our industry is we try to apply one-off, well-worn case studies like Zappos, Blendtec and Red Bull as a standard when they’re not. To be Zappos, first you have to be Zappos. It’s like a guitar player saying he wants to sell records like Radiohead. Well … first you have to be Radiohead. That is simply out of reach of most people.

        Joe’s recent quote: “You don;t have to be big, you have to be remarkable” exacerbates the myth. Being remarkable is not a strategy. Being Radiohead is not a strategy.For the vast, vast majority of marketers out there, content marketing is just one tool in the arsenal, not and end in and of itself. M

        I agree we need to evangelize the new way of doing business — I do this every day myself. But I think we also need to have a realistic view of what is acheivable to MOST businesses. Content is a marketing expense likeSEO, not an investment like a new piece of manufacturing equipment. I don’t see companies writing off content iinvestments and depreciating them as other true investments. I just don’t think this is realistic expectation.

        I appreciate your tireless, passionate and innovative advocacy of content marketing. CMI is an undisputed leader in this space. I can tell that you are doing a lot of thinking on this measurement question and I hope you will come out on the other end with a perspective that is grounded in what is truly real and achievable for the 99 percent. I would also offer my help and support in any way as you think this through because what you do and say matters to all of us in the business.

        To really move things forward, we need to embrace the common business expectations like traditional ROI and quarterly sales goals (a reality for any public company) and succeed within those constraints. That is hard work.

        Thanks again for obliging me with my long comments, I am a passionate content marketer too : )

  • William Cosgrove

    One of the best posts I have had the pleasure to read on the
    subject in a while in the fact that you put the subject into context as it
    relates to marketing in today’s digital ecosystem.

    Marketing is an accounting expense pure and simple. I feel
    ROI was a measurement created by companies looking to sell their products
    and/or services. Content marketing is a long term process with short term
    results so is the process the asset?

    “When business is good you advertise. When business is bad
    you’ve got to advertise.” This is an age old saying that expresses the fact
    that you have to advertise if you want to grow your business.

    Today the use of agile marketing from my point of view provides the perfect solution for marketing in today’s digital environment. Although this can be a detractor as well as some campaigns take longer to catch on and can then go viral which is something that many times comes from the gut.

    Marketing is done to create visibility and engage consumers.There is no way to accurately measure at what point the consumer is in the buying process until they engage with you though there are those that say there is.

    But even if the consumer doesn’t buy they could be telling friends and family on and on and on and on. There are too many scenarios that could possibly provide benefit and all cannot be measured.

    Statistics should be used as guides not as a determining factor in marketing.

    • Robert Rose

      William – thanks for that – and yes spot on. I hadn’t heard that quote before and it’s a good one. Lest it got lost in the post – I’m a HUGE fan of campaign-based marketing and advertising. I recognize its importance. I just want us to evolve the idea of Content Marketing as building an asset that’s actually worth investing in – and realizing multiple lines of value (such as the ones you suggest) OVER Time.

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  • Carrie Morgan

    Love it! The success of measuring content goes back to the original strategy – or lack of one. If you don’t have a goal in mind when you create your content, and a long-term plan that it fits within, how can you possibly come up with a meaningful metric? You’re sitting in an airplane going to an unknown destination, with no clue when and if you finally arrive.

    Define your target audience and their needs/interests, define your goal, create content that fits the audience and goal, then measure against the goal. Then, using your metrics – do more of what works, and less of what doesn’t.

  • Courtney Shelton Hunt

    Love this piece. I can personally attest to the value you’re describing. I’ve taken this approach for years and have built my own digital engagement around it. This summer I have been too busy to write, but the traffic to my website has not gone down significantly because of the content I’ve already got there. The most popular article by far is one I wrote almost two years ago (on Twitter hashtags), and the most visited page today (so far) is also from two years ago (and also on Twitter). Last week I got a speaking engagement based on some of the digital literacy content I created, which was discovered during a Google search.

    There’s so much more I could say, but unfortunately I have to move on with my day! Would love to continue the conversation one day… 🙂

    • Courtney Shelton Hunt

      PS – The key (and challenge!) is realizing it’s not an either/or proposition but “yes/and.” All forms of marketing are potentially important and valuable. We have to find the right balance relative to our goals and objectives, both short and long term.

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