Which is a Better Investment: Paid Ads or Content Marketing?

When answering if paid ads or content marketing is a better investment and which generates more ROI, it’s important to note that your content strategy doesn’t necessarily need to be an either-or situation. You can easily choose both methods to be effective. But let’s take a look at which would be considered a “better investment.”

The value of content marketing

To create the best ROI for your content marketing, you need to create valuable content that helps your potential customer. Content marketing costs 62% less than traditional marketing but generates three times as many leads (DemandMetric). We’d say that’s pretty good odds and a pretty good investment.

The same infographic notes that 68% of consumers read content by brands that interest them and 80% of people like learning about brands through their custom content. Nearly all consumers (90%) find custom content helpful and useful in some way and 69% of consumers find that they trust brands with content more and feel engaged.

Even though video content is pervasive these days, only about 7% of consumers want video and about 35% of consumers want articles, 24% want infographics, and 11% want case studies (Fractl, Content Marketing Statistics), which means that it’s best to invest in blogs and articles with some attention to case studies and infographics.

Distribution channels and ROI

We’ve said this before, but you can have great content, but it has to be shared somehow and put in front of your audience or it’s useless. Generally, you want to distribute your content through sites, blogs, newsletters, social media groups, mobile apps, and RSS feeds. And you want that content to be put in front of the right audience who will find that content relevant and useful to nurture the customer-business relationship so they’ll eventually use your product or service.

Good quality content is worth the investment because if shared and distributed correctly, it can generate a generous ROI. For example, marketing thought leader Neil Patel invested $30,000 in creating advanced guides that he gave away for free. Even though that seems like a high price to pay, Patel noted that he made 10x the initial investment and he only distributed the guides via free social media channels without using paid advertisement.

You may not be working with thousands of dollars, but you can still see generous ROI. For example, if you pay your writers $100 per blog post and you have a product that costs $20 and five people read that blog post and buy your product, you’ve broken even. If you have 100 readers and only twenty people buy a product as a result, you’ve just made a $300 return (300% ROI). Plus, once you’ve paid for your content, it can still generate returns. On the downside, some content will have negative ROI, but if you create compelling content for your audience, distributed correctly, most content is worth the investment. The Digital Marketing Institute has a great guide on calculating ROI for content marketing.

Besides writing on your company blog, other types of content-distribution can be worth the investment such as guest blogging, distributing via earned media (partner networks, publisher editorial, influencer outreach, word-of-mouth, social networks), and via email marketing, blog commenting (i.e. writing helpful comments on blogs in your industry), all of which can create more awareness.

The value of paid advertisement

If you find yourself spending several hours promoting your content each week (like 10+ hours), then you may find that paid media is worth the investment. After all, your time costs money. Even though paid advertisement can be expensive, it is not a waste of money but you do need to understand how to track your true ROI.

However, it’s also important to note that some conversions cannot have a dollar value ascribed. For example, a mobile video ad may have created brand awareness and may create a lead down the line, but there’s no dollar value on that lead in the present.

Overall, you want to keep track of how much you’ve spent on ads whether that’s Google ads, Google shopping ads, Facebook, LinkedIn, or Twitter promotions and boosts, sponsored posts, or Display ads. Then, you’ll need to calculate the time you’ve spent in creating and setting up the ads, and then see how much you’ve generated in sales and leads from those ads. For example, a company called Kenshoo found that its paid Facebook ads generated a 30% return. Another marketer, Ezra Firestone, drove traffic to his landing page by spending $775.50 on Pinterest advertising which drove 520 product sales, generating $41,254.34 in revenue. Neil Patel offers some guidance on figuring out the ROI of your advertisements.

Paid ads can sometimes depend on your landing pages too. Something as fickle as your call-to-action button color can affect whether you generate sales or not. Successful paid ads can often be a trial and error and test scenario, much like content.

Which method should I choose?

The short answer is probably both. Both content marketing and paid advertising is valuable. However, whether you choose organic distribution or paid ads for your content, it all depends on your goals. If you can wait for the slow-burn of organic content, then that’s perfect for you. If you want a boost in traffic more quickly, then paid channels may work for you. But, either way, you have to have the high-quality, engaging content that your target audience wants to read and then convinces them to use your product or service. No amount of paid ads can help if the content doesn’t hit the spot.

Paid ads are there to promote and sell products or services. Content marketing has a different goal: to provide valuable and relevant content to its audience, to attract, build, and retain that customer relationship, which drives profitable customer action over time. Content marketing creates brand awareness, nurtures leads, converts leads, and creates an overall positive customer service (you hope).

The Takeaways

Discovering whether content marketing or paid ads is a better investment comes down to your goals. However, without the content, you may have nothing to use in your paid ads. Either way, your website will need relevant, helpful content as a basis. These two things work together to reach your goals of generating sales and nurturing your customers long term. Paid ads are a valuable tool, but you need to understand your goals in paying for ads, determine if your company can afford a loss if not successful, and experiment and test what works.

Get in touch with Key Medium if you need help with your content marketing efforts.