Here’s the thing.
Most blog owners and publishers instinctively know that they need to create content to get more visits to make more money from display ads and clicks to their affiliates.
But the one thing most people fail to do is set benchmarks that help them understand if their content is performing or not.
And I don’t just mean raw visits to a page or keyword positions in Google.
Sure, those things are great and easy to measure, but did you know that for my site Babyschooling.com, all I need is 10 visits per day to one of my “best…” pieces of content monetized via the Amazon Associate affiliate program to yield an ROI of 309% over the course of 12 months.
There are some assumptions of course such as:
- The combined cost for a writer to write the article and hire a VA to publish the article is $43 dollars
- The click through rate (CTR) to Amazon from my article to Amazon is 34%
- The traffic I send to Amazon buys something 16% of the time (i.e., 16% conversion rate)
- The average order value (AOV) of that conversion is $30
- The affiliate commission I get is 3% for the sale
- The “best…” type posts are also monetized via display ads yielding at least a 6 RPM
If I hit those benchmarks, the $43 cost of article will yield $176.26 over 12 months resulting in an ROI of 309%
How awesome is that?
Please Note: There are costs associated with linkbuilding to get content to rank in the first place but we’ll assume the site is already in a place where it can rank articles. Watch the return on content video above where I account for the cost of linkbuilding.
In fact, I’ll get my 43 bucks back in approximately 3 months as the monthly earnings calculate out to $14/month.
Now we all know “SEO takes time”, so if we assume an ultra conservative 3 months to rank for the target keywords and generate our target 10 visits per day, then the payback period is roughly 6 months (3 months to rank and 3 months to generate earnings).
Sure it would be great if that piece of content generated 100s of visits per day, but I don’t need 100s I just need 10.
10 visits per day = 309% ROI in 12 months.
And in 24 months?
Assuming I maintain my average 10 visits per day I’ll net a 719% return on my initial $43 bucks.
That’s $352.51 earned by spending $43.
Ready to start a blogging business yet? 🙂
But wait, Shane I still don’t get it, how does that work?
Let me paint a picture for you.
An Example From My Baby Blog
To hammer these concepts home, take this article about the “best baby walkers for tall babies”.
A standard article, monetized by Amazon’s affiliate program, Amazon Associates.
From May 2nd to May 8th, the CTR to Amazon was about 47% sending 130 people to Amazon out of 274 visits from Google organic search.
During that same time frame you can see from the image below I am converting about 16.49% of the traffic I send to Amazon from Babyschooling.com. To be clear, I am not tracking clicks to Amazon on a page level. This would require a dedicated tag for each page, which would yield better data, but this aggregate view is more than fine for planning purposes.
You can also see that the average order is $25.56 ($3,630/142 orders) and the earnings totaled $110.81, which is roughly a 3% commission (inline with expectations).
By looking at the raw numbers, we can plainly see this article is performing well above the target metrics mentioned earlier on track for the 309% ROI or perhaps even higher.
That said, this piece is performing and no action needs to be taken.
But when comparing it to another piece of content such as my article about the “best baby bottles for reflux” as seen below.
You can see a CTR to Amazon of only 11.69%, well below the target of 34%.
Unfortunately, this means that something is broken.
There is a mismatch between what I have on the page and what the traffic is looking for.
I would argue that this could be a sign of missing the “intent” of the query, which usually spells doom for the organic positions I have for this page.
If I’m ranking #1 for “best baby bottles for reflux” but I am only getting 11% CTR to Amazon, when I expect a 34% CTR, then chances are pretty good I’m missing the “intent” and Google will soon figure out that my page does not belong at #1.
So you can see how measuring the ROI of a content can also spill into an SEO optimization exercise because its implied that if people are performing the action you expect them to take, then you ARE meeting the intent of the keyword and you’ll hold rank (all else being equal of course, like domain authority, etc).
So what does this all mean?
This is important because it removes the emotional ups and downs of the Google algorithm and focuses on the numbers.
The cold hard measurable numbers.
I use Amazon Associates as my example here but this exercise can be applied to any page and any affiliate program.
You just need to collect the correct piece of data.
What You Need To Measure the ROI of Your Content
To start measuring your content like this, you need the following numbers.
Full Cost of Published Article:
In order to know the return on investment of anything, you need to know the cost. For blogs, you need to add up the cost to research, write, and publish an article on your blog.
For my baby blog, I do the research myself so there’s no cost there (except my time, which I’ll ignore for simplicity), it costs me about $33 to have it written, and $10 for it to be published.
The CTR to Your Affiliate:
This is the rate at which visitors land on your content and go to to the affiliate partner. I would argue, this is one of the most important metrics an affiliate marketer can measure. It’s simple, if your content is not sending visits to your affiliate partner, you’re not making money.
For my baby blog, this number was roughly 34% across all of my affiliate content. In order to get your number, you’ll need to measure outbound clicks from your website.
Below is my tutorial on how to set this up for most blogs.
The Conversion Rate On Your Affiliate:
This is how often a visitor goes to your affiliate and completes the action you want them to take (i.e., buying a product, submitting email, etc).
Amazon has notoriously high conversion rates exceeding 20% in some cases. Non-Amazon partners may be in the 1-3% range. My baby blog was around 16% for reference.
The Average Value of The Conversion:
For my baby site, the AOV was $30. For you it might be higher or lower. For cost per action (CPA) based offers, this number will be the amount you are paid based on the completed action (i.e., $3 for email submit). Watch the return on content video above for a full example of this.
The Affiliate Commission %
This number is how much your affiliate partner pays you for the value of the conversion. For my baby site, where I send Amazon a customer who buys something for $30 bucks, I get 3% of that sale or roughly 90 cents.
For CPA based offers, this number will be 100% because you get all of the conversion. For example, if you send someone to a sweepstakes offer where your visitors submit their email and you get $3 (your AOV), you get 100% of the value, so $3.
Watch the return on content video above for a full example of this. In the video above I go through 3 examples of how to apply these metrics.
But What About Non-Affiliate Content?
For content where you have no-affiliate being promoted, then I assume you’ll be monetizing that content with display ads.
The revenue per visitor generated based purely on display advertisements is going to be very low, which means you’re going to need a lot of visitors per day to achieve an ROI on content like this.
For example, if it costs me $43 to produce an article for my baby blog and I monetize the content purely with display ads at an RPM of 6 (hopefully this goes up after COVID), it would take me 7,166 visits to earn $43 in display ads. That’s about 20 visits per day for 12 months just to break even and get my $43 bucks back.
This is up from the 3 months I’d need in my example above where I send traffic to Amazon.
Final Thoughts On The ROI of Content
At the end of the day, if you’re failing to plan you’re planning to fail.
Even with Google squeezing publishers and creating more “no click searches”, it’s still a great time to build a blog and become a content publisher because you don’t need millions of visitors to be successful.
If you understand your numbers, you can scale up content production and know with confidence, you’re going to get a return on your investment even if you can only manage to pull 10-20 visits per day, which is extremely attainable if you go for long tail phrases.
This is why I love blogging, and being an SEO.
So there you go, download the calculator and get to number crunching!
Special Thanks To Jon And Ashley
In Jon’s weekly email newsletter, he published a forum post Ashley wrote about the economics of blog content.
Specifically, Ashley calculated how much 1,000,000 words of content is worth and created rough benchmarks (like CTR, conversion %, etc) to measure the success or failure of blog content.
I wanted to take the idea a bit further and expand on it looking at the total ROI of content from various sources and how other (non-Amazon) affiliate programs fit into the model.
I also thought a calculator would help folks play with the numbers to see how much they can afford to pay for content and the minimum daily visitor count they need.