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August 27, 2007 | | Comments 2

How Do You Calculate The ROI Of A Blog?

Good question. I found this interesting discussion on this topic at Forrester.com.

The first thing I’ll say about this subject is that there is no definitive way to measure ROI for a blog. After all, what are the expenses?

  • Domain name = worst case scenario, $20 per month (realistically, $10/month or less)
  • Software = Using WordPress or a similar solution – uh, free (unless you pay $150 for set up)
  • Monthly blogging service = Do it yourself for free or pay $200 on the low end or $5,000 on the high end for a full-time blogger

These are the bare essentials. You could hire a designer to put together a sleek design for you and pay anywhere from $100 to several thousand dollars. It’s up to you. We’re minimalists and recommend spending as little as possible. After all, there is also a time commitment. How much is your time worth?

OK, so what are the benefit? They are legion:

  • Increased search engine presence
  • Customer feedback
  • Link popularity and PageRank
  • Targeted traffic to your website
  • Increased sales volume

I like what the team at Forrester had to say about establishing your blog’s purpose. I’ve said all along that this is the first thing you should do when you start a company blog. Answer the question, “What is its purpose?” That’s the first step, which will also give you clues as to how you should measure ROI. One example from Forrester goes like this:

FastLane has about 100 people commenting on the blog each month, which is equivalent to gaining customer insight on products and brands from a traditional focus group. We estimated that the value of this was equivalent to running a focus group every month at the cost of $15,000 a month, or $180,000 a year. Voila – there’s the value of the blogging benefit laid out in black and white.

If you’ve conducted a focus group then you know it’s not cheap. If you can get valuable feedback from customers that will save you from having to conduct a focus group then you can save thousands of dollars. You can also measure your traffic. What would it cost you in PPC to drive targeted traffic to your website? If a blog can deliver the same amount of traffic for less money then you can easily measure the ROI. The same goes for banner advertising, off line or print advertising, or any other business outlays.

Bottom line: There’s no definitive way to measure ROI for a blog, but there isn’t any definitive way to measure ROI for many traditional marketing expenses either (how about that TV ad that ran on 50 stations last month?). Much of what is done in marketing is done to create top-of-mind awareness. How much is that worth? No one can answer it but you. But I know this – some of our blog customers have stopped posting to their blogs for a period of time only to return when their search engine rankings dropped. Such a drop also means a drop in traffic and a commensurate drop in sales. Do you really need a hard dollar figure?

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2 Responses to “How Do You Calculate The ROI Of A Blog?”

  1. Thank you for this. I’ve being trying to get a client to start a blog for a couple of years now. I’m going to point them to this article and see if $180,000 a year changes their mind.

  2. Allen says:

    Thank you for your comment Liam and thanks for stopping by. Hope your client gets that blog going.

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