Are you familiar with the term compound interest?
Relax, I’m not about to take you through a complex mathematics lesson…
Instead, I’d like to show you how a long-standing mathematical term – compound interest – can be related to content marketing and its successful application for your business.
What is compound interest?
I’ll try to make this as simple as I can – hopefully!
Let’s assume you have $1000 cash you are willing to invest in a fixed deposit with your bank.
Let’s assume again that you will be getting 10% interest on your fixed deposit annually.
If you invest this for say 20 years, your accrued interest would be $2000 independent of your invested principal of $1000.
In simple terms, you have turned $1000 into $3000 using the concept of simple interest.
What this means is that you have earned interest of $100 every year in passive income.
See how it looks like:
The concept of simple interest is pretty cool, simple, easy, and most entrepreneurs feel at ease with it.
However, with the same $1000, there is a way you can earn much more.
If you re-invest every incremental piece of income you earn back into your interest, then you can also start making interest on that money too.
This is called compound interest.
Let’s see what it would look like if you use compound interest rather than simple interest with your investment.
Amazing, isn’t it?
The result above is even more than double of the simple interest total of just $3000
With compound interest, it’s a whopping $6,727.50.
If we simply scale this from 20 years to 50 years, with simple interest you would earn $6000 and with compound interest you would have earned $117,390.85!
You see the amazing difference in the figures as you keep scaling?
That is the power of your ability to compound.
So, now to the bigger question…
What does compound interest have to do with content marketing?
Every piece of content you create is an asset that accrues value over time.
This article is both an asset for me and an asset for Jeff.
The concept of compound content marketing is unique yet simple.
And that is how every content marketer should begin to see content marketing – as a long-term investment.
Regardless of the type of content, whether it is blog posts, eBooks, videos, podcasts, courses or something else.
If you do not see them as an asset, chances are you will not make a good business decision.
This is where most content creators, especially bloggers get it all wrong. We do not treat content like a business investment.
How to treat content like a business investment
This is something I call “the content snowball effect”.
I like to explain this using Phil Ivey – Regarded as the top poker player in the world.
Phil has won more tournaments than just about anyone else.
Do you want to know his secret to making millions?
Here is what he says “You play better when you’re winning. No matter how good or bad a player you are… you play better when the chips are flowing”.
You get yourself a win.
You don’t stop, you pile on more and more until your momentum is like a jetpack strapped to your back.
It’s the same thing with content marketing, and that is exactly how to treat your content – like a business.
You create epic content, evergreen content or even situational content, get it published, drive some traffic to it, don’t stop – create more content that will bring more traffic.
When traffic is eventually converted to subscribers and eventually sales that brings profit, instead of celebrating your little profit, and before you order your next pizza, wait!
Why not reinvest the money back into more content – I mean epic content that is worth linking to on the web and can bring more traffic, create more credibility and authority which will eventually lead to more sales?
Learn to reinvest the results from content back into creating more content, regardless of the results.
That is my “content snowball effect”, that is a great way to treat your content as a business.
I was recently doing a content strategy audit for a client and I noticed an article we published in 2015 had brought in 2249 fresh visitors in that month alone.
That’s not all, it has generated 183 leads, each lead is worth $200 each and that is $36,600 in value.
Just in a single month.
For just a piece of content created 3 years ago.
Undoubtedly, creating content is serious business.
What is most amazing is that the success has been replicated through constant re-investment back into more content and updating old content.
Content marketing is a marathon and not a sprint
What I am trying to say here is that, unlike winning the lottery, content marketers won’t see a huge return on content overnight. It’s usually a long-term investment. As we saw in the example of compound interest above, the more we extend the time of the investment – the ripple effects in interest/profit becomes mind-blowing.
Another aspect most content marketers find very challenging is knowing whether to focus on evergreen content or situational content.
I would not advise focussing only on evergreen content – situational content is mostly trending topics we may need to harness to drive traffic and sales. And that is just the difference between simple interest and compound interest.
Tom Tunguz compared evergreen content and situational content and the effects of both.
Let’s see some graphs:
Here is what Tom has to say:
When creating a content marketing campaign, marketers must be deliberate about their balance between evergreen content, posts that are always interesting for readers, and temporal content, posts that are relevant just for a day or two. Evergreen posts often confer timeless advice. Temporal posts comment on recent events.
And here is his conclusion:
In reality, content marketing campaigns balance evergreen and temporal content. While it may not generate long-term returns, temporal content keeps blogs fresh. But to benefit from the compounding effects of content marketing, marketers should actively invest in building evergreen content that keeps contributing to traffic growth, building the company’s brand and eventually generating sales.
My conclusion is this: If you are looking at simple interest, then invest more in temporal content. They will give you instant results that are not sustainable, but if you are looking at compound interest then invest more into evergreen content.
Here is the result below of research carried out by Hubspot on compounding blog posts (evergreen posts) and decaying posts (temporal posts) :
This result speaks for itself. Isn’t it amazing to note?
So, how can you start taking advantage of compounding content?
Tips to take advantage of compound content marketing
- Approach content marketing as a marathon and not as a sprint. Your content may not get any attention till after 6 months or even a year. So always stick to it.
- Cultivate the habit of updating your content. Google loves updated content. Reinvest into your content, add any available updates, add new and relevant pictures or infographics, depending on your content type.
- Go more for long tail keywords – make sure your content is directed ta specific targeted traffic.
- Repurpose content that is compounding well into other mediums (slides, podcast, videos, text etc.)
- Above all, create evergreen content.
I am not an expert in investments, I really cannot tell you how lucrative it is to invest your money in gold, bitcoins or stocks etc.
But I can tell you every time, energy, and money invested in epic content is worth all the effort. It has worked for lots of internet marketers and it’s still working. After all, content is said to be king.
Every great investor out there would advise that you invest and reinvest in what you understand.
Warren Buffet has never invested in content as rich as he is, why? He doesn’t understand it.
Being a successful entrepreneur has nothing to do with the quantity of what you know, just one area of specialization would bring you all the wealth you need.
Start compounding content today, a few years from now you will look back and be glad you did.
Guest author: Daps is a web developer and digital marketing expert, he is a patriotic Nigerian and he is proud of his skin. His desire to solve clients needs has help him create a huge success in helping his clients find their place online with clients from Africa, Uk and America. He also blog with dapsdigital.com