How Much Should You Spend On Content Marketing?

By now, you know you need a content marketing strategy. Use these expert tips to help set your budget and get started.
January 06, 2014

Content is a powerful marketing asset. High-quality blog posts, videos and infographics are invaluable for helping companies connect with new leads and build brand authority. Large organizations are investing heavily in content production—and they're able to quantify a tangible ROI.

According to a recent study from the Content Marketing Institute, 73 percent of B2B marketers are producing more content than they did one year ago. And over the next 12 months, 58 percent of marketers are planning to increase their content-production budgets.

Budgeting For Content

But how much should a company spend on content? That's the question many small-business owners are struggling to address.

Rick Ramos, an online marketing expert who consults with companies on their content strategies, says, "Typically, content marketing is anywhere from 25 to 30 percent of an organization's marketing budget." 

A content marketing budget should account for both content creation and distribution, Ramos adds. "You can have the best content in the world," Ramos says, "but if you don't plant the seeds with distribution, it becomes hard for your target audience to find your content."

Ramos advises small-business owners to budget more for content marketing if their products are highly specialized. As he explains, "The harder it is to reach a target audience, the more business owners should spend on a content -marketing budget."

Work Backwards From Your ROI Goal

But instead of fixating on your content marketing budget, you should determine how much you expect to earn from your investment. Then work backwards to see how much you can afford to spend on your content development.

Archon Systems, the company that produces inFlow, an inventory management software program, uses this process. "We have a different model than most other inventory software companies," says Matthew Kostanecki, who runs inFlow's marketing program. "We have no salespeople and no forced opt-in to try the software."

Instead, inFlow relies heavily on content so that prospects can find the software. "In order to determine how much to spend, we first put a dollar figure on the action item we want our readers to take," Kostanecki explains. And for inFlow, that conversion goal is for users to download the software.

"We look at how much a download is worth and keep tabs on how many downloads each piece of content is generating," Kostanecki explains. "If a certain piece is generating a number of downloads, we'll hire that writer for more pieces and do follow-up related content."

Avoid Shortcuts

Content marketing can help demonstrate your brand's expertise and commitment to quality. "Content marketing is best invested in when it helps to demonstrate your relevance and value to the client, not merely through a pile of blogs that are clearly engineered to attract Google's attention," says Brian Gatti, a partner with marketing firm Inspire Business Concepts.

Business owners trying to save money will frequently cut corners by hiring cheaper writers or creating low-quality blog material, Gatti says. "But nothing is worse than generating traffic to pages that are poorly written or are irrelevant," Gatti explains. "It would be better if you did nothing at all."

If you're serious about your blog or other content marketing strategies, don't spend simply for the sake of spending. Always ensure that you're generating a strong ROI in the form of leads and new customers.

And if your company is going to pursue a content-marketing strategy, you need to be serious about it. Some companies start and then drop the ball because they get too busy. But blogging, like any other marketing strategy, should be planned for and committed to in order to make it work.

Ritika Puri is a writer specializing in business, entrepreneurship, marketing and quantitative analysis. She has written for Forbes, Investopedia, CrazyEgg, Unbounce, the Contently Blog, the SAP Innovation Blog and others.

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