Blog: Digital Marketing Trends - Whittington Consulting

Calculating business blog ROI

Written by Rick Whittington | July 31, 2006

After attending a recent business blogging seminar, I realized that most business managers really want to build a business case for blogging. After all, blogging takes time away from other business activities and requires a good amount of effort, so wouldn't it be helpful to calculate the return on investment (ROI) of a business blog?

When I've pitched business blogs in the past, the client nearly always asked what the benefits of a blog were. The reasons to maintain a business blog include creating a sense of community with your customers, getting feedback from your customers, generating fresh content for your web site, building company credibility and improving search engine visibility, just to name a few. That was always good enough for the client. I've never been asked to specify the ROI of a business blog. Eventually, someone will ask, though.

But is there a way to calculate a return on investment of a business blog? I turned to the web, thinking that someone had already answered the question. What I found out is that other attempts to calculate business blog ROI had been somewhat futile.

After some thought, I decided that it would be possible to calculate the monetary value of a business blog by applying ecommerce metrics. Treating your business blog as a sales channel allows you to quantify the monetary return.

Most internet retailers religiously follow many site metrics, including conversion rate (buyers/visitors) and revenue per visit (revenue/site visits). The higher these metrics, the more effective the site is at generating revenue. The same metrics can be applied to a business blog.

I'm making the broad assumption that your business blog follows sound blog effectiveness principles -- you have a good web analytics solution in place, you provide links in your blog to products/services on your web site and you provide a way for customers to contact you directly from the blog.

If all of this is true, you can relate revenue back to your blog. Through path analysis, you can find out what pages customers visited. If the path included a look at your blog and later a purchase or a successful completion of a contact form, you can relate the revenue generated to the blog. For a service provider like me, I have the contact form tagged in such a way that I can distinguish blog contacts from regular web site contacts. If a contact becomes a client, the fees get associated to the blog or to the site (or to paid search, offline advertising, other online advertising, etc.).

  actual revenue % of revenue
Referrals    
Face-to-face networking    
Offline advertising    
Search engines    
Contacts from blog    

Examining your web analytics will reveal how many visitors read the blog during the given time period, and this number is used to calculate your revenue per visit. The number of purchases or leads resulting from a path through the blog is used to calculate your conversion rate.

What you've now got is an apples-to-apples comparison between the blog and the web site. That's not all, however. There are other benefits of the blog that are a bit less scientific, including search engine visibility. You can calculate the increase in traffic as a result of having the business blog by analyzing the referring sources of your traffic. You can make the assumption that a majority of visitors that find your business blog through search engines might not have otherwise found your site.

For those business managers who need a business case to blog, I hope this helps. I welcome your feedback if you have other ideas.