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Building inbound marketing assets are not marketing expenses

I write about strategies to turn fans into customers and customers into fans. I also share ways to use real-time strategies to spread ideas, influence minds, and build business.

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I get pushback from many entrepreneurs and business owners as well as CMOs in larger businesses about the idea of using inbound marketing because they see the investment in people to create content as a barrier. They say things like: "I cannot find money in my budget to spend $5,000 a month (or whatever the number) on content creation."

When I probe, the vast majority of these decision makers are looking at content creation in the same way as they look at other marketing expenses they currently have such as advertising, trade show booths, spending on agency retainers, and printing brochures.

Building inbound marketing assets

Thinking of your content as an expense like advertising means you always underspend.

For example, if you spend $5,000 in a given month on Google AdWords, the only thing you are buying are the resulting clicks of your ads appearing against the important phrases people search on to find your business. But as soon as you stop paying, your clicks stop too. This is the classic example of a marketing expense.

However, if you spend $5,000 in a given month to hire a freelance journalist to write a bunch of interesting blog posts relating to important phrases people search on to find your business, you will have assets that live on forever that will drive people to your content from the search engines for years to come. The content will have value many years after it has been paid for.

I started writing this blog in 2004. There are posts that I wrote many years ago that rank highly in the search engines for phrases that people search on today such as "brand journalism" "online media room" and many others.

My free ebooks are an even more dramatic example. I've gotten well over a million downloads from these efforts. Every day people download my ebooks, in some cases many years after I have written them because they enter search terms like "viral marketing" and discover my long ago created content.

Those blog posts and ebooks are assets that I own. It's not a marketing expense because the 500 or so links from Google and the other search engines I get each day are free!

It's not just me. Mike Volpe, CMO at HubSpot, looked at HubSpot sales leads from their blog. It turns out that 70% of all blog leads are from older articles and only 30% of the leads came from articles that they wrote that particular month.

In other words HubSpot blog assets that were already "paid for" in the past represented 70% of HubSpot success. Yet the way most people would calculate ROI is to value the smaller 30% of leads against the marketing spend for that month. This method gives false data.

Time to stop thinking of content creation as an expense

Almost all marketers are looking at an investment in content as a short-term expense instead of a long-term asset.

It is time we educate the decision makers that content creation is asset building. I am such a believer in this that I think we should put our blog or YouTube channel onto our balance sheet in the same way that many companies value patents or brands.

How to value your content assets

There are a number of ways we could actually value our content. None are perfect. Here are a few to get you thinking:

Value of a blog post or ebook using AdWords Value Equivalency

I propose one metric, which I coin as AdWords Value Equivalency, which is sort of similar to the traditional PR metric of Advertising Value Equivalency.

The way to calculate this is to figure out how much you would have to pay for the Google AdWords equivalent of a particular search term that you rank highly for in the natural search results because of the content you have created. Then figure out how often that phrase is searched on and calculate a value for a year (or ten years or in perpetuity).

As an example, HubSpot is currently in the #1 position for "marketing software" (nice!!). And there are also a bunch of companies buying ads against this phrase using Google AdWords. I would argue the value of that phrase as a HubSpot asset is the present value of the maximum AdWords price you have to pay times the number of searches (or the number of clicks). You could figure it out such that a keyword like that could potentially be worth millions of dollars over, say, ten years.

Value of a Twitter follower

Here is an arbitrary way that each Twitter follower is valued. Some time ago the mobile phone site PhoneDog sued a former employee when he left the company, alleging that the employee took as many as 17,000 Twitter followers with him when he left. PhoneDog estimated each follower was worth $2.50 and went to court to get the money back.

I know the dollar figure is arbitrary, but take your company's Twitter followers and multiply by $2.50. Again using HubSpot as an example, the asset they have built of 285,000+ @HubSpot twitter followers is theoretically worth more than $700,000.

I'd argue that if HubSpot were to value the company to, say, go public in the coming years that investors would be wise to look at these valuable marketing assets in evaluating the merits of investing in the company.

What about you?

Please add a comment if you are already calculating the value of your marketing assets and let us know how you do it.

Are there any creative types out there who want to build an online tool for my concept of AdWords Value Equivalency?

Disclosure: I am on the HubSpot advisory board and serve as the company’s Marketer in Residence.