We recently discussed what it costs to generate a link in your market. Now, we dive in further to look at the cost of a post that ranks and the ratio you should maintain.
Hey, everyone. I’m Ross, founder of Siege Media. Today, I want to introduce you to the third part of our ROI series on post value ratio. In the past, I talked about what a link is worth in your market and the concept of lifetime link value as a method of evaluating your market.
We recently introduced the idea of a link value ratio to basically take that analysis and apply it to how much it costs to generate a link in your market which can vary, dependent on what space you’re in.
Today, I’m going to close that funnel and think about post value ratio — what it costs you to create a post to ranks and what that [ideal] ratio should be.
Ahrefs recently introduced something that makes this analysis relatively easy. In their top pages report, you can see what the average traffic value is in a market. You can use this looking at the total market divided by the number of pages a site has to get a general ballpark for what’s possible.
If you want to be even more accurate, you could look at top five pages of Ahrefs in terms of the most valuable pages, so you don’t get the riffraff at the bottom to create an average. This will give you a sense for that cost that an average page will generate. So if you’re in credit cards, maybe, that value might be in the $10,000-range.
If you’re a podunk affiliate site, there’s a chance it could be $500. Or you’re in a space where you are doing coloring pages and making money off of ads, then that traffic value is probably $200 for that post. These are all considerations you should factor in to how much you spend to build that piece of content.
This content value ratio or page value ratio is similar to link value ratio we talked about before. You should aim to have a 10-to-1 ratio, the lifetime value of that piece of content against what it costs you to generate that content. If you’re an affiliate space and your margins are tight, you’re generally going to make around $250 per piece of content you make.
In that situation, what you want to do is take that $250 and then multiply it by two years. To assume you’re going to make four years’ worth of ROI on something in the SEO space is difficult to do. I think eHow and those kinds of companies used to do that, and you see what happened to their business models, they went in the grave because of that.
So if you have the 24 times number, you’re creating a math equation that gives you some strong confidence you’re going to see ROI. So let’s say you’re making $250 a month and you build something that actually costs you $2,000 to rank for that. So multiplying $250 by 24, we actually get a lifetime content value or page value of $6,000 in this situation.
So we know the lifetime page value is $6,000, and our content cost is $2,000, that’s only a 3-to-1 ratio. That’s not a very profitable content equation to build a long-term, efficient, and high likelihood of success business.
That doesn’t mean you’ll fail by spending $2,000 to generate that $250 a month asset. It just means that the likelihood is lower. Your margins are likely tighter, it’s going to be harder to scale that business. There’s risk involved with building that for $2,000 when the lifetime value of that is $6,000.
I suggest trying to maintain a 10-to-1 equation of the lifetime page value against the cost to create that piece. If the general market opportunity is $3,000 a post in terms of the monthly value, and you now have the lifetime value of that, you can use that to inform a content strategy of how you build page templates, how you build content, and to make that ROI efficient equation for your business.
One example I want show you is in mesothelioma. So this space, the value of a page here is often 500+. This page that we’re looking at is $1.5 million a month. That is a huge number for that page.
If it costs you $10,000 to build a page in this situation, that’s totally fine, because the upside is so gigantic if you believe you can beat them. But in that situation, let’s say it’s worth $1 million in terms of lifetime value.
If it costs you $10,000 to make that, that’s a 100-to-1 equation. You’re going to run a profitable business if you can actually achieve that ratio. But one thing to keep in mind is actually if the gap is that wide, you should probably close that gap to stay competitive.
Something I’ve seen in the space in this page that I’m showing you from the MAA Center is you can see this has great UX, it’s been thought through, it’s very scannable, it’s easy on the eyes. Basically, they’ve almost certainly invested far north of $10,000 on this page.
They’ve probably done user testing, they’ve probably done A/B testing, they’ve done massive redesigns to test to see that lift in engagement, and they did video. They brought that gap in order to not be disrupted at some point. Because if your cost to create that page value is that wide, even if you’re not taking advantage of that, someone else will eventually do that and beat you.
So you shouldn’t be 100-to-1. If you are, that might be short-term positive for you, but long-term, you should at least be reinvesting in those profits to create the lifetime cost gap and shrink that to create a better equation that more likely cements that for you as a business.
The page value ratio of 10-to-1 in terms of the cost for you to create it versus the lifetime value if you take the expected traffic value times 24 months, that should be 8 to 10-to-1 to feel like you’re very confidently going to have a strong positive ROI from that situation.
If you can broach that above 10, you’ve built frameworks for your business that lowers the cost per post, which is what you should do when you realize this math is off. You can be smarter and beat your competition. You can invest in things like a nicer page template instead of the per post investment to offset those costs and not have to spend $6,000 or $2,000 in that review example in order to build something that’s competitive.
You can compete in lots of different ways, and generally scalable frameworks will allow you to bring down those costs and make these ratios work so you can have a profitable business. I’d love to learn what models you use to evaluate content and content marketing to make sure you’re running profitable campaigns.
So, love to hear what you thought of this ratio. Please give us a thumbs-up, subscribe if you liked it, and let me know what you thought in the comments. Thanks for watching.