What the Heck is Blog ROI?
Monday, July 21st, 2008
A couple of weeks ago, I asked: Do Blogs Work? I was surprised to find that this topic took off like a rocket, and was picked up by several bloggers across the Internet:
- How Do You Feel About Marketing Your Writing Business?
- What is Your Writing Blog Doing for You?
- Inspiration Points: Abraham Lincoln’s Secret
- When Blogging Is Not Enough
- Do Blogs Really Earn Business?
In comments to my original post and in these follow-ups, some said blogs could improve your business, if done the right way and if part of a larger marketing plan (notably James from Men with Pens). Others said that the time and work involved could be better applied elsewhere, if you are looking at a purely marketing point of view. A third group said “Who cares?” since blogging for them is just for fun.
Tom Chandler of the Copywriter Underground also pointed out that some freelancers may use a blog as a way of avoiding less desirable but more active methods of marketing like cold calls.
(If you like, you can read all the comments here.)
But except for a select few, bloggers are not sure what impact — if any — their blog is having on their marketing efforts. I realized that I was in that group of people who couldn’t accurately measure my blogging results.
So, I decided to put my money (or at least my time) where my mouth was, and set out to devise a way to determine Blog ROI.
Why the ROI?
Should we measure any type ROI in the first place? I think so. I think it’s important to gauge how well our marketing efforts are working. But some marketing methods are definitely easier to measure than others.
For example, it is fairly easy to track your costs and your response rate (along with other important statistics) with Google Adwords. Ultimately, this allows you to track your Return On Investment or ROI. The idea of course is to measure how effective your marketing is in terms of dollars (pounds, drachma…) spent. The formulas are so simple even a writer can use them:
- Adwords costs/Number of New Contracts = Cost of Acquisition (of Each New Contract/Client)
- Income Generated/Adwords Costs = Income Generated Per Advertising Dollar
Now here’s the “tricky” one:
- (Income Generated-Adwords Costs)/Adwords Costs*100 = Return On Investment or ROI (represented as a percentage)
If I spend $1,000 on Adwords and get $5,000 in contracts, then my ROI is:
($5,000-$1,000)/$1,000*100 or 400%.
By trying different marketing methods and comparing the results, you can gauge which advertising method gets you the best bang for your buck. You can do this monthly, yearly, or during the life of a specific Adwords campaign.
The Difficulty in Calculating Blog ROI
So if we accept that we should measure ROI of our marketing, and we look at blogging — at least partially — as marketing, then it follows that we should examine our Blog ROI.
But how do you measure blog results?
First of all, the investment is in time, not money (except, perhaps, for any web or graphic design work you contracted out, etc.). And second, unless someone says: “Hey, I read your blog, and I want to hire you…” there is no obvious way to make a direct connection between your blog and a new client and/or contract.
I should point out that this question is not new in the corporate world, where the demand for demonstrated Blog ROI is likely much higher than the freelance world. I came across two articles (there are many) that became my reference points:
- http://www.rickwhittington.com/blog/calculating-business-blog-roi/
- http://blogs.forrester.com/charleneli/2006/06/calculating_the.html
Now I think that it is important to point out that these posts are written with larger companies in mind. Charlene in the Forrester blog asks how corporate bloggers can justify their blogging time. As she says, blogging is part of her work as an analyst and (hopefully) gains goodwill for her corporation, among other things. But she cannot accurately gauge how her blog here will impact sales over at another part of the company.
And that is a big difference. Freelancers generally handle the front end and back end of marketing and client acquisition, so we do have that advantage. Whereas measuring impact is almost impossible at a larger company, there must be some way for us freelancers to see how many (if any) clients we attracted directly or indirectly through our blog.
I’m going to try to find out just how easy it is to measure, and share that with you in coming posts. In the meantime, let me know how you feel about Blog ROI. Is it important? Am I on the right track here? Am I off my rocker? Let me know!
~Graham
It nagged at me before I started this blog, it continued to tug at my sleeve as I wrote, and now it’s starting to whisper in my ear with increasing volume… If we are writing blogs to increase sales, are we going about this the right way?
At the beginning of “Contact” (the movie, not the book) there is a brilliant sequence where the camera pulls out from Mother Earth and all the TV and radio waves aurally pull out with it. You hear snippets from the soaps, ’60s shows to finally the first radio recordings. The further from Earth you get, the less chatter there is until finally silence.
I’m a very deadline-oriented person. And like many writers, I suspect, I work better under other people’s deadlines. Too often I have put a new project on my to-do list, but because it there is no deadline attached, it usually gets pushed back another day…
There is a direct-mail letter that generated an estimated $1 billion in sales over an 18-year span. It was written by Marty Conroy for The Wall Street Journal, a simple two-page letter that told the life stories of two college graduates who went on to the same company. However 25 years on, one was a manager while the other was its president. The implication (never explicitly expressed) was that the president read The Wall Street Journal, helping him gain success in the business world.
In previous articles in this series we talked about how to survive editing by committee (click on the “editing by committee” tag at the bottom to see all posts in this series). In this segment the message is simple: document everything.
