BLACKSHIP ONE PRESENTS…
8 Reasons Why Content Marketing is Better Than Paid Ads
Which is better, content marketing or paid ads? In this post we aim to answer this question by highlighting the benefits of content marketing that you can’t get from any paid ads channels.
Content Marketing Vs. Paid Ads: The Showdown.
Over the years our content marketing agency has grown many web properties into websites that receive millions of visits on a yearly basis. In the tutorials we’ve been publishing on our blog lately, we’ve been talking about how we managed to scale a FinTech site from 6000 page views to 168,000 organic page views in only 6 months.
We were averaging 96% MoM growth with monthly growth ranging between 32% to 155%. We achieved this growth exclusively through content marketing. Not a penny was spent on paid ads.
Organic growth case study
Now, in order to prove the power of content marketing, we’re actually going to make our own growth at Blackship.One totally transparent. So if you want to follow along and get behind-the-scenes access to our organic growth playbook, then click here.
So why do we believe in content marketing more than we believe in paid ads? In short, the reason is just that it’s worked better for us over the years.
Content marketing isn’t better than paid ads. It’s just what we’ve had more success with. We’ve also had a lot of success with paid ads. In our experience, paid ads are just riskier (i.e. see “money pit), and many things need to line up before a paid ads campaign is successful.
We’ve had great success with paid ads in certain niches when many things align (product market fit, higher priced point products, low competition, underserved markets etc.). There is a misconception that paid ads ALWAYS work. This is probably because people are less likely to publish information relating to their failures.
However, there are countless YouTube gurus teaching how to make 50K / month on autopilot from paid social media after watching a 10 minute video tutorial. Remember, if it seems too good to be true… it’s probably too good to be true.
And even if we can get those paid growth channels working, the opportunity cost of working on a twitter paid ads campaign with a 2:1 LTV:CAC ratio, or a Facebook ads campaign with a 3:1 ROAS, fails in comparison to the substantially higher return of 10:1 + that we normally see with content marketing.
In a previous post, we talked about how we approach content marketing in the same way that Warren Buffett approaches stock investing. For us everything needs to line up. We need to make the best decision we can, using the information we have available to us. For us, content marketing has always been the clear winner. That’s likely why we started a content marketing agency and not a PPC agency 🙂
So let’s dig into the reasons why we love content marketing more than paid ads in most circumstances.
1. You save money monthly not having to pay for awareness
One of the biggest benefits of organic growth is that it doesn’t necessarily require an ongoing investment. With paid ads, once you’ve identified your desired keywords or target audiences, you need to pay in order to access that awareness each month.
We have a content marketing value calculator over on our site. Let’s jump over there and use that so we don’t speak in abstractions (open the calculator in a new tab so you can follow along).
Let’s imagine that we are targeting a keyword with a monthly search volume of 10,000 searches. Let’s also imagine that when we’re looking in Google’s Ads, that we see the CPC for this keyword is $1.50.
Now with this data entered, we can see that if we ranked in the 1st position for this keyword organically we could expect roughly 3,300 visitors / month to our website.
The reason why it’s not the full 10,000 is because not 100% of the search volume clicks on the first result. The attention is spread throughout the first couple of pages of organic results. The first 3 results on the main page capture the lion’s share of the attention and results further down the page fight over attention scraps.
A rough breakdown of the attention that each position in organic search receives can be seen below:
Organic awareness breakdown
1st position: 33%
2nd position: 18%
3rd position: 11%
4th position: 8%
5th position: 6%
6th to 10th position: 3%
As you can see, if we can rank our page in the first spot in Google, we can expect 3300 visitors to this page each month.
You can also see that if we had to purchase that same level of awareness in Google Ads, the cost of that awareness would be $4950 / month. Keep in mind, this cost is only for 1 search term. This cost can start to compound quickly once you start targeting multiple search terms.
However, with organic search, even though you need to invest time and money up front to create the content, the cost is a one time cost that could potentially pay dividends for years to come.
2. The ROI / LTV: CAC ratio can be way higher
This brings me to my next point. The LTV:CAC ratio is often much higher with content marketing than it is with paid ads.
Again, we have another calculator on our site where you can measure your LTV:CAC ratio (lifetime customer value : customer acquisition cost).
Let’s plug in some numbers from an imaginary product. Let’s imagine we have a company that is at $10,000 / month in recurring revenue. Let’s also imagine that we have 100 customers and let’s set our CHURN to 10%.
Notice, now that we have an idea of the LTV (customer lifetime value). Here you can see that every customer is worth $1000 to us.
Essentially, by knowing your LTV you can figure out the effectiveness of your ad campaigns.
With Facebook advertising people often use ROAS (Return on Ad Spend) to figure out what their campaign needs to earn in order for it to become profitable.
Spending $100 to make $100 would mean you have a 1:1 ratio. You’ve spent $1 to make $1.
Having a ROAS of 2:1 would mean you earned $2 for every $1 you spent on paid ads. In the world of Facebook and Google advertising most advertisers consider a 2:1 ratio passable, a 3:1 is considered good and a ratio of 4:1 or higher is generally considered a success.
With the LTV to CAC ratio, we’re essentially calculating the marketing campaign’s efficiency. If we know the lifetime value of a customer, we know we need to spend less than that to acquire them. In in the example above we know that our customer is worth $1000 to us.
Now let’s imagine we spend $1000 to create tier-one content around this keyword. Let’s also imagine that we’re targeting the same keyword that has a search volume of 10,000 organic searches / month.
If we could rank this piece of content on the first page of google we would get somewhere between 300 to 3300 new targeted visitors to our site each month. Let’s be conservative and assume our conversion rate is 0.05%.
3rd position ranking: A 3rd position ranking would result in 1100 additional visitors to our website and 5 new sales resulting in a customer acquisition cost of $200 and an LTV: CAC ratio of 5:1, which is already exceptional.
2nd position ranking: If we ranked in 2nd position, we could expect 2700 visitors. With .05% CR we could expect to see roughly 13 new sales / month and a CAC of roughly $76. In this case, the LTV:CAC improves to 13:1.
1st position ranking: Lastly, a first page ranking would result in 3,300 new visits / month and roughly 16 new monthly sales. In this example, the customer acquisition cost improves to $62 and the LTV:CAC ratio improves to 16:1.
But best of all, you can leverage these organic positions monthly without having to invest time or money into ongoing content creation. This allows you to leverage your growing library of content to produce results for you passively from month to month for years to come.
Obviously, the math gets more complicated than this, but these metrics and ratios help you benchmark your content marketing campaign’s performance.
3. You don’t have to defend your position
Next, because content marketing requires more effort to do well compared to paid ads, there is less competition. What we see time and time again is that the more challenging a marketing strategy is to execute on, the fewer people will do it.
This means that if you earn a trop ranking for one of your target keywords, it’s fairly easy to defend over the long run.
We’ve held top positions in organic search for many years without having to do any content upgrades, just because we put so much energy into the initial production of the content.
4. Not interruption marketing
Another thing I like about content marketing more than paid ads, is that with organic growth focused content marketing you’re not engaging in interruption marketing.
I really like the quote by Craig Davis which says:
“We need to stop interrupting what people are interested in and be what people are interested in”.
When you look at paid ads, especially on social media or third party content networks, you’ll notice abysmal click through rates, especially when compared to the click through rates of organic search.
5. Underperformers aren’t always a lost cause
Another benefit of content marketing over paid ads is that with content marketing your losers often aren’t total losers. With content marketing, you won’t hit a homerun every time you’re at bat. However, the cumulative benefit of hitting a bunch of singles will add up over time.
Often, with paid ads you’ll have to kill underperformers because you can’t support campaigns running negative ROIs. You can’t sustainably spend $2 to make $1.
However, with content marketing, under-performers can still play a role. To demonstrate how this works, let’s go back to our LTV: CAC ratio calculator. In this example, let’s imagine that we produced one piece of content for $1000 and within the first year that piece of content only brought us 1 new customer. Essentially, we have a 1:1 LTV:CAC ratio. However, in the 2nd year, that content doesn’t need to be reproduced, so if it brings in just one sale / year, although not impressive, you’re no longer in the red.
And cumulatively, these relative failures can contribute a lot to your bottom line. 50 pieces of content sending you an extra 50 to 200 new customers / year isn’t so bad.
6. Content is better at targeting low volume but high buying intent keywords
Another thing I like about content marketing over paid ads is that you can target keywords that have really low search volume, but high buying intent.
With paid ads, if interest is too low, paid ad channels often don’t allow you target those keywords.
If you’ve ever tried targeting these keywords in Google Ads, you’ll probably be familiar with the warning “low search volume”. Google will often make these keywords inactive so they don’t trigger your ads. However, as a business owner, there is often a lot of value hidden in these seemingly insignificant search terms.
For instance, for one of the productized services we own, we have a landing page targeting a low volume keyword. Most SEO tools show the keyword at zero to 10 searches / month.
However, we’ve found that with keyword variations and outlier keywords that the number is slightly higher than this. It’s still less than 100 searches / month, but we make 1 to 2 sales / month off that page and the service is a $2000 service. This page and keyword, which all paid channels deem to be insignificant, adds and extra $2000 to $4000 / month to our bottom line. Again, it’s not much, but these small wins, once they start to compound, add up.
In fact, we have an entire strategy built around targeting these low volume, high buying intent keywords. If you want to learn more about that strategy click here.
7. Your content acts like sales people working for you 24/7
Another feature I love about content marketing is its ability to leverage a growing library of content to attract awareness 24 hours / day, 7 days / week.
The way we look at it at Blackship.One, is that with each piece of content we’re creating, we’re adding additional sales people into our team.
Right now we’re in the middle of a content blitz where we’re adding over 200 pieces of content online in 30 days.
Each of these pieces of content draws more awareness towards our content marketing services. It’s a big investment of time and money up front, but this content will work for us for years to come.
8. Content marketing is easier to scale
This leads me to my last point, which is that content is really easy to scale. Each month as you produce more content, you’re adding growth on top of growth. By doing this, your month over month growth rate will start to compound.
The goal is to one day wake up with 500 pieces of content within your inventory, each one driving you its fair share of awareness each day.
What impact would 500 pieces of high ranking content have on your business?
Content marketing vs. paid ads: Conclusion
I hope you’ve enjoyed this article. And remember, if you’re looking for a content marketing agency to help you scale your website, reach out to us today for a free no pressure 30 minute consultation. We’d be happy to take a look at your company to see if we’d be the right agency to help you scale your organic growth efforts.
Thank you for stopping by today.
We Help You Grow Through Content
Blackship.one is a content marketing agency that helps hi-tech brands grow through the use of our organic growth playbook. We help with content planning, strategy, writing, publishing and SEO optimization. If you want to learn more about how we scaled a recent project to over 160,000 organic page views / month in 6 months, watch the video to the right. 🤝