What Is Blog ROI and Why Does It Matter?

So you have a blog and you’re not quite sure whether it’s really paying off. If this sounds like you then this 3 part series will help. Upcoming articles will suggest 5 Tools to Help Calculate Blog ROI and offer tips on How To Improve your Blog ROI.

QuestionsBlog ROI is simply the return on investment that comes from your efforts of professional blog writing.  Many benefits come from a well maintained blog but from a business point of view, some executives declare blogging a waste of time.   This is because business minds focus on the return on investment in monetary value to justify the resources invested.

Calculating the ROI makes perfect sense because it is foolish to spend time or money on business-related tasks that don’t generate a return.  Plus, it is easy to get caught up in blogging without a purpose or a plan and seriously wasting your time and money publishing blog entries that don’t make a bit of difference to your bottom line.  By assigning a monetary value to the benefits of blogging, you can monitor the contribution that your blog makes to your business financial goals.

Whether you blog for a large corporation or a small, self-owned business, it is a great idea to justify the time and resources that you put into blogging by figuring out just how it makes a difference in monetary value.  If you are a paid professional, with budget cuts looming over your head, your job security may depend on it.  Business owners should also be concerned about spending their precious time and resources wisely.

When it comes to business concepts and theory, I have a lot of respect for Forrester Research, Inc.  A few months ago, I was reading a blog entry by Richard Evensen that asked market insight professionals what they were worth.  He explained that ROI models should be based on value rather than theory, on data rather than hypothetical estimates, and they should determine the actual gain to the business.  In other words, they should express monetary value.

That brought me back to Charlene Li’s 2006 article about quantifying blog data.  Ms. Li suggested translating benefits into measurable data.  This attempt developed into a framework for calculating blog ROI.

The framework suggests translating blog traffic into the cost of advertising in other channels, press mentions into the cost of advertising in the same publication, search engine positioning into the cost of search engine optimization or the cost of paid search for certain keywords, and word of mouth into the cost of hiring a buzz agent.  It also proposes quantifying customer insight by determining the cost of a focus group and mentions using the decrease in the cost of sales to translate increased sales efficiency.

Using the concept of this framework can help you to calculate a logical ROI for your blog expressed in monetary value that is based on data and reflects the actual gain to the business.  It will satisfy the executive minds as well as helping you to understand the value of blogging.  It is not a worthless venture.  A well planned blog that is consistently maintained does have a positive effect on your bottom line.  Blog ROI can prove it.

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