Calculating the True Cost of Content

Calculating the True Cost of Content Ona Koehler Erin Provey Sr. Benchmarking Manager Service Director 14 May 2015

The Road to Content Measurement Everyone wants to determine the return on content investment, but SiriusPerspective: few organizations have real insight into the initial investment. $ © 2015 SiriusDecisions. All Rights Reserved 2

Executive Summary •  Key issues •  The majority of b-to-b content creation is done internally across functions, representing a huge blind spot in the marketing budget •  Most b-to-b organizations have a hunch they’re wasting money on content creation, but have no ability to capture the total spend − never mind analyze waste •  It’s impossible to even begin to think about return on investment without having a good handle on what the investment truly is •  What you will walk away with •  A model for calculating the total amount an organization spends on content today •  A methodology for analyzing and benchmarking content spend •  A preview of the SiriusDecisions Cost of Content benchmark © 2015 SiriusDecisions. All Rights Reserved 4

Content Creation: Deﬁned The creation phase of content determines the potential of an asset to SiriusPerspective: create value when and if it is activated. CONTENT CREATION Ideation: Content is Design: The packaging for Build: The phase in which conceived of as a a content asset is a content asset or set of raw conceived and set of assets is materials. planned for. produced. Examples: Examples: Examples: -  Primary research -  Template development -  Video production -  Messaging creation -  Creative concept -  Graphic design -  Copywriting development -  Editorial © 2015 SiriusDecisions. All Rights Reserved 5

Assumptions In order to calculate true content creation costs, we need to build in SiriusPerspective: assumptions about the creation process and the value of internal time. 1. IDEATION vs. DESIGN/BUILD 2. INTERNALLY GENERATED CONTENT ISN’T FREE Functional Hourly Rate (FHR) © 2015 SiriusDecisions. All Rights Reserved 6

2015 Cost of Content Survey We surveyed 291 b-to-b professionals with strong knowledge and/or SiriusPerspective: decisionmaking authority over content creation, across revenue bands and industries. Revenue Industry 12% <$100m 21% IT 11% 32% $101m to $500m 43% Healthcare $501m to $1b Financial Services 20% $1b to $5b 22% 26% $5b< 15% Other © 2015 SiriusDecisions. All Rights Reserved 7

Cost of Content Methodology The amount of money an organization spends on content creation is SiriusPerspective: a combination of internal and external costs. Billings Salary % BSN* External Internal Content Creation Price Time Investment *BSN = big scary number © 2015 SiriusDecisions. All Rights Reserved 8

Calculating the External Cost of Content External content costs can still be diﬃcult to parse from other billed SiriusPerspective: expenses such as account management or consulting deliverables. ts • List of all external • Eliminate • Isolate ideation from u contributors irrelevant spend design/build p n I • Total billings © 2015 SiriusDecisions. All Rights Reserved 9

The True External Cost of Content As organizations grow, they rely much more heavily on external SiriusPerspective: agency partners to support content creation needs. How much does your organization 3.5 $8.2M spend on external content creation 10.4 agencies annually? SiriusDecisions 2015 Cost of Content survey $4M $175K 8.3 agencies 3.5 agencies <$100M< <$1B< © 2015 SiriusDecisions. All Rights Reserved 10

Calculating the Internal Cost of Content Calculate internal costs by understanding internal contributors to SiriusPerspective: content creation, how much of their time is required, and how much that time is worth. Billings Salary % BSN* External Internal Content Creation Price Time Investment *BSN = big scary number © 2015 SiriusDecisions. All Rights Reserved 11

Calculating the Internal Cost of Content Calculate internal costs by understanding internal contributors to SiriusPerspective: content creation, how much of their time is required, and how much that time is worth. % ts • List of internal • Average % of time for • Functional Hourly u contributing functions ideation Rate (FHR) p n I • Number of employees • Average % of time for per function design/build © 2015 SiriusDecisions. All Rights Reserved 12

The True Internal Cost of Content Internal content costs are a hidden expense, but internally generated SiriusPerspective: content is not free and actually represents the majority of b-to-b content expenditure. How much of the content creation process is executed internally? 53% SiriusDecisions 2015 Cost of Content survey 63% 80% <$100M< <$1B< © 2015 SiriusDecisions. All Rights Reserved 13

The True Internal Cost of Content Internal content costs are a hidden expense, but internally generated SiriusPerspective: content is not free and actually represents the majority of b-to-b content expenditure. Total costs of internally generated content SiriusDecisions 2015 Cost of Content survey and Cost of Content $9.3M Benchmark Model $6.8M $0.7M <$100M< <$1B< © 2015 SiriusDecisions. All Rights Reserved 14

Top Internal Content Creators Product management tops the list because it is a large function SiriusPerspective: that spends almost half its time – which is expensive – creating content. SiriusDecisions 2015 Cost of Content survey % of total % time spent content- creating % total creating content FHR cost headcount 1. Product Management................................................................................... 40% 45% $69 47% 2. Field Marketing............................................................................................. 22% 43% $47 18% 3. Portfolio Marketing...................................................................................... 15% 40% $63 15% 4. Marcomm...................................................................................................... 6% 54% $40 5% 5. Corp. Comm..................................................................................................... 5% 43% $48 4% 89% © 2015 SiriusDecisions. All Rights Reserved 15

The True Cost of B-to-B Content SiriusPerspective: Enterprise-size organizations spend roughly twice what they think they do on content − emerging growth organizations spend more than 10 times! Billings Salary % BSN* External Internal Content Creation Price Time Investment *BSN = big scary number © 2015 SiriusDecisions. All Rights Reserved 16

The True Cost of B-to-B Content Enterprise-size organizations spend roughly twice what they think SiriusPerspective: they do on content − emerging growth organizations spend more than 10 times! SiriusDecisions 2015 Cost of Content survey $8.2M $4M $17.5M $10.8M Content $175K Creation $0.9M <$100M< <$1B< Investment © 2015 SiriusDecisions. All Rights Reserved 17

Emerging Growth Content Marketing Mix Smaller organizations’ marketing mix is heavily weighted toward SiriusPerspective: common internally generated outbound assets such as emails and sales decks. Web page 9 email 8 23 10 brochure blog post r e $0.9M ad case study ap 4 p 3 8 press release e t { sales 4 i presentation Webcast wh infographic 16 4 video 1 4 SiriusDecisions 2015 Cost of Content survey © 2015 SiriusDecisions. All Rights Reserved 18

Mid-Sized Content Marketing Mix Mid-sized companies’ marketing mix is outbound-heavy, with a SiriusPerspective: focus on email and sales collateral, but inbound content is on the rise. sales blog post $10.8M email presentation 17 31 52 y white paper 8 d c e 14 i u h as t ap s r e 24 23 g press l e web ebook o e page f r n as 13 12 i { c brochure 39 ads webinar video 11 10 18 VAT 6 SiriusDecisions 2015 Cost of Content survey © 2015 SiriusDecisions. All Rights Reserved 19

Enterprise Content Marketing Mix Enterprise-size organizations have shifted eﬀorts from outbound to SiriusPerspective: inbound and have the ﬁnancial means to pioneer trendier and more expensive formats. c i $17.5M ad Web h blog post ap page r 34 47 g 93 41 o f n i case press email study release video 55 30 28 19 { white paper Webcast 25 VAT 8 brochure sales 51 28 presentations 9 ebook 25 SiriusDecisions 2015 Cost of Content survey © 2015 SiriusDecisions. All Rights Reserved 20

Spend Analysis Productive vs. unproductive content spend

The Two Faces of Content Spend Productive content spend is fuel for the revenue engine; SiriusPerspective: unproductive content spend is evil and might be plotting to murder you. Productive Unproductive __________ __________ Spend on content Spend on content that is activated that isn’t used by internal because it can’t audiences and be activated as is consumed by or can’t be external located. audiences. © 2015 SiriusDecisions. All Rights Reserved 22

Analyzing Total Investment We don’t necessarily want to invest less in content; we want to think SiriusPerspective: about savings in terms of reducing unproductive and increasing productive spend. In Use In Use 35% 35% Unused Unused 65% 65% Analyzing Total Investment SiriusDecisions 2014 State of B-to-B Content survey © 2015 SiriusDecisions. All Rights Reserved 24

Analyzing Total Investment We don’t necessarily want to invest less in content; we want to think SiriusPerspective: about savings in terms of reducing unproductive and increasing productive spend. Hard to ﬁnd Hard to 11% ﬁnd In Use Unknown In Use 11% In Use 35% to Users 35% Unknown to 35% 17% users 17% Unused No budget 65% 10% No budget Low Irrelevant 10% quality 10% 10% Low Quality Irrelevant 8% 19% Analyzing Total Investment SiriusDecisions 2014 State of B-to-B Content survey © 2015 SiriusDecisions. All Rights Reserved 25

Analyzing Total Investment We don’t necessarily want to invest less in content; we want to think SiriusPerspective: about savings in terms of reducing unproductive and increasing productive spend. Hard to ﬁnd Unﬁndable In Use In Use 11% In Use 28% Unﬁndable In Use 35% 35% Unknown to 35% 28% 35% users 17% Unused No budget No budget 65% 10% 10% Low No quality Irrelevant Low Irrelevant quality 10% 10% budget 10% 10% 10% Low Quality Irrelevant 8% 19% Analyzing Total Investment SiriusDecisions 2014 State of B-to-B Content survey © 2015 SiriusDecisions. All Rights Reserved 26

Analyzing Total Investment We don’t necessarily want to invest less in content; we want to think SiriusPerspective: about savings in terms of reducing unproductive and increasing productive spend. Hard to ﬁnd Unﬁndable In Use In Use 11% In Use Unﬁndable In Use 28% 35% 35% Unknown to 35% 28% 35% users 17% Unused No budget No budget 65% 10% 10% Low Irrelevant Low Irrelevant quality 10% quality 10% 10% 10% Unusable 37% Analyzing Total Investment SiriusDecisions 2014 State of B-to-B Content Survey © 2015 SiriusDecisions. All Rights Reserved 27

The Price of Unproductive Spend The waste generated by unﬁndable content is considerably less than SiriusPerspective: it is for unusable content; the path forward for resolving each scenario diﬀers. 50 percent of design/build eﬀorts and costs Unﬁndable coming out of sales and ﬁeld marketing could have been avoided if the content had been ﬁndable. 100 percent of design/build eﬀorts were wasted on this piece of crap. Because the Unusable basis for the content was ﬂawed, roughly 50 percent of ideation costs were also a waste of money. © 2015 SiriusDecisions. All Rights Reserved 28

Benchmarking Content Spend Don’t benchmark content spend against a total; benchmark the ratio SiriusPerspective: of productive to unproductive spend and set targets for qualitative improvement. SiriusDecisions 2014 State of B-to-B Content survey $2.3M Productive Spend Unproductive Spend $10.8M $17.5M $2.0M Total Content $0.9M $15.2M $100k Investment <$100M< $8.8M <$1B< $800k © 2015 SiriusDecisions. All Rights Reserved 29

Sneak Preview The SiriusDecisions Cost of Content Benchmark

The Cost of Content Benchmark SiriusPerspective: The SiriusDecisions Cost of Content Benchmark allows organizations to benchmark content productivity and output against a peer set. 1. Time-and-motion study …and give us we can show 2. Internal research on this data… you this. average salary and total headcount 3. Implement procurement codes to gain better insight into third-party spend 4. Regular content audit © 2015 SiriusDecisions. All Rights Reserved 32

The Cost of Content Benchmark The SiriusDecisions Cost of Content Benchmark allows organizations SiriusPerspective: to benchmark content productivity and output against a peer set. 1. Time and motion study 1. Time spent internally on we can show aspects of content creation, 2. Internal research on by function, by asset you this. average salary and total headcount 2. Headcounts 3. Implement 3. External content spend procurement codes to broken out by ideation vs. gain better insight into design/build third-party spend 4. % content used, % content unﬁndable, % 4. Regular content audit content unusable © 2015 SiriusDecisions. All Rights Reserved 33

The Cost of Content Benchmark The SiriusDecisions Cost of Content Benchmark allows organizations SiriusPerspective: to benchmark content productivity and output against a peer set. 1. Total content costs broken out by internal vs. external (vs. peer set) 2. Functional content costs (vs. peer set) 3. Average cost per asset type 4. Total unproductive costs (vs. peer set) © 2015 SiriusDecisions. All Rights Reserved 34

Action •  Marketing Items •  Conduct a time-and-motion study to understand allocation of internal content creation eﬀorts •  Conduct regular content audits for ongoing insight into productivity of content eﬀorts •  Sales •  Reconsider the idea that marketing-generated content is free and disposable •  Realign with marketing in an eﬀort to increase content usability and ﬁndability in the ﬁeld •  Product •  Eliminate incentive structures that encourage quantity over quality in content creation •  Align content creation incentives to increase adoption through increased ﬁndability and relevance © 2015 SiriusDecisions. All Rights Reserved 35

Recommended •  Introducing the SiriusDecisions Content Model Research •  The SiriusDecisions Content Model: Deﬁnitions •  Content Operations: The Hub for the B-to-B Content Process •  The Pulse: The State of B-to-B Content •  Sales Enablement and Content Operations: Building the Relationship •  Maximizing Content Value Through Reuse •  Conducting a Field Content Collection Week •  An Introduction to Content Marketing Software •  Select Practice: Illumina: Cutting Through Content Clutter •  Conducting a Content Process Gap Analysis •  Building a Persona-Based Content Framework •  Building and Using a Content Blueprint © 2015 SiriusDecisions. All Rights Reserved 36