The Law of Compound Information in Marketing: Timing is Everything

by Marcus Sheridan

compound_informationI was speaking to a client a couple of days ago who, up to this point as a business owner, has basically done squat as a content marketer. In other words, he has no blog, he has done no video, and just isn’t currently thinking like a consumer.

Notwithstanding these shortcomings though, this guy has already placed himself in front of many in his niche just by merely recognizing he has marketing and branding ‘issues’. After talking for a while regarding his next steps, he asked me the following question:

So let’s just say I keep things like they are this year and then when I have a little more time, I get going with all this inbound marketing stuff??

My response was simple:

You don’t understand the Law of Compound Information.

Timing is Everything

Most of us have heard about Compound Interest in the past. For anyone looking to garner a financial nest egg and live a financially sound retirement, this action is usually a must. Here is what Wikipedia says regarding the subject:

Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding. A bank account, for example, may have its interest compounded every year: in this case, an account with $1000 initial principal and 20% interest per year would have a balance of $1200 at the end of the first year, $1440 at the end of the second year, and so on………

Without having a deep economic discussion here, compound interest equates to your money’s ability to grow over time. And what will impact this growth curve the most?  When it comes down to it, there are 3 main factors. Wiki states further:

The effect of compounding depends on the frequency with which interest is compounded and the periodic interest rate which is applied. Therefore, in order to define accurately the amount to be paid under a legal contract with interest, the frequency of compounding (yearly, half-yearly, quarterly, monthly, daily, etc.) and the interest rate must be specified.

What does this mean for your business?

We’ve all heard that inbound/content marketing is an investment. But just like any investment, your return on said investment (ROI) will be greatly impacted by the following economic principles:

Frequency

This is huge. How often are you blogging? How often are you adding video to your site? Are you constantly looking for ways to add new pages to your site or has it been stuck on the same number for the last 6 months?

Hopefully you see what I’m saying here. Your two biggest customers, Search Engines(like Google) and consumers(anyone that might buy something from you) need to be fed great information often so as to give you respect and love. This may sound too simplistic but it’s incredibly true. Understand that each and every article you write gives Google more opportunity to look at your site, notice your value to the consumer, and then show you on the first page for more and more key phrases in your niche. By simply compounding your articles and the information therein, your organic search results will only continue to go up.

Furthermore, when consumers constantly see you giving more and more useful information to anyone who cares to listen, respect is garnered and your brand awareness naturally climbs. I’ve seen this process again and again and frankly it’s a beautiful thing.

The Value of the Interest (Information) Rate

I equate this one to the value of the information you’re actually giving consumers. To give you an example, let’s say your company blog is a glorified calendar and sales pitch. Because all you ever talk about in your blog posts is how great your company’s products and services are, as well all of your ‘amazing accomplishments’; the value to the consumer will be low. In fact, they’ll quickly cover their eyes and ears because you’re not actually helping them.

But if your blog is all about the consumer—if  it teaches them everything there is to know about your product/service—then you’re going to get major love. People will read you often. Links will come your way from other websites. And because of this, Google will again look upon your site with a smile and rank you higher and higher in organic search results.

Time

What’s the first thing anyone talks about when saving to build wealth? That’s right, TIME. Timing , in many ways, is everything. For example, if you invest $100 a month into some type of savings plan at the age of 20 and don’t touch your money until you’re 50 you’ll have way more money than the 50 year-old guy that started investing $200 a month when he was 30. The simple reason for this is timing.

This is why it’s a terrible idea to just wait to embrace content and inbound marketing. The company that started writing 2 great blog articles a week 5 years ago is CRUSHING the company that started writing 4 great articles a week 2 years ago. Although this may not sound fair to some, it’s the facts. Just look around the web and you’ll start to see exactly how the principal of compound information really works and is critical for any business.

So please consider this reality as you consider content/inbound marketing for your business. The idea of ‘waiting for a better time’ makes no sense. Start compounding your information today. Start getting noticed by Google and consumers today. I can assure you that if you do decide to wait, your business will be sadly left behind by those businesses that were actually willing to see the big picture and embrace the mind of the 21st century consumer.

What are your thoughts on ‘compound information’? Has it worked for your business? As always, your thoughts are invited and appreciated.

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{ 15 comments… read them below or add one }

Gabe November 14, 2010 at

Great information here Marcus. I think people need to know this stuff, especially the stuff about Compound Interest since it’s important to our future. I couldn’t agree with you more about time. It takes time to do things for your future. People just want to ‘get rich quick’ but that’s not just possible. You have to be patient and build wealth over time. Nice article.

-Gabe
.-= Gabe´s last blog ..How to Make Your Dreams Come True…Every Time =-.

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Marcus Sheridan November 15, 2010 at

Great point Gabe. The internet, as a whole, is the antithesis of a ‘get rich scheme’. In my opinion, this is a beautiful thing. It means the guys and gals that want to work hard and teach will gain the trust…and everyone else will sit and complain about the hard workers….kinda funny really…Thanks for stopping by buddy!

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Daniel M. Wood November 15, 2010 at

Like usual Marcus I agree with you.
There is no reason to wait. If for no other reason, it takes time before you start seeing results from content marketing and by marketing now, you will get those results sooner. You will also be less behind or more ahead of your competition.
.-= Daniel M. Wood´s last blog ..50 Motivational Quotes about Succeeding in Life =-.

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Marcus Sheridan November 15, 2010 at

Right on D’. The pendelum is always swinging. Either we are gaining ground on the competition or losing it. That’s just how it works. The beauty of compounding information is that it means we are always, and I mean ALWAYS, moving in the right direction…..In fact, the last 11 months for you are a perfect example of this D’….You’re awesome man, glad to have you here.

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Mark November 15, 2010 at

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of many things.” – Charlie Munger
When I read this quote from Mr. Munger a few months ago, I assumed he was talking about money since he is a financial genius. Your post reminded me that compound interest extends to many other spheres of life, i.e. knowledge, relationships and experience. Thanks!

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Marcus Sheridan November 15, 2010 at

Dang Mark, I do believe you just said that much better than I did above :-)

Love the quote, and yes, the principal applies to all things!

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Dave Marciniak November 15, 2010 at

Spot on, Marcus. Content marketing is sales farming, all about the long game. Anyone who thinks the purpose of a business blog is propping up a box on a stick over a plate of birdseed is going to catch as many customers as Wile E. Coyote caught roadrunners.
.-= Dave Marciniak´s last blog ..Landscape Design for DIY Homeowners =-.

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Marcus Sheridan November 15, 2010 at

LOL, that gave me a snicker Dave. So right you are man. In fact, ‘farming’ is another great analogy when taking a look at content/web/inbound marketing. The more we plow, the more we sow, the more we nourish……..the more we reap.

Keep being great Dave, I’m really excited to see your ‘new and improved’ blog take shape.

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Jk November 15, 2010 at

Marcus – this was the real deal. Thank for – because I needed it!

While I’m new to the blogging game – I’m no noobie to business in general, so I can highly associate your message to being of great importance. But let me be honest with my challenge- – - I’ve found that my quality dips significantly when I don’t take my time (a lot of time). But, when I release something I feel as though I’ve added real quality – something that will actually be of impact to another person (well, that’s my hope of course). So my approach right now is quality over quantity. But as my writing improves, I hope to move to 2 article posts per week.

Given my scenario – do you advise that I maintain my current approach, try to restructure my approach to produce a higher quantity of shorter articles? Or, do you recommended something else altogether?

I respect and value your advice!

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Marcus Sheridan November 15, 2010 at

This is a GREAT question Hustle, one I have thought about extensively and experimented with as well. In reality, I think there are a few answers:

1. It’s tough to build a large following, especially with the help of organic search results, unless you post often. As you write(compound) more and more info and keywords, Google notices all of this and you’ll see your organic results really skyrocket over time (especially if you know how to write solid titles to your articles.)

2. The majority of internet readers like shorter posts. A minority appreciate longer posts. These statement are facts, whether we like them or not. As to how they affect your strategy, well that’s another debate. It is for this reason that I now write most of my articles in the 700-1000 word range whereas when I started most of my articles were 1200+. Notwithstanding, if I feel inspired to write a longer article, I do.

3. This brings me to my next point. Too often bloggers define themselves as ‘long’ or ‘short’ in terms of their article lengths. I tell everyone to say what you have to say, be concise, give value, and then if you’re at 400 words or 2000 words, STOP.

4. Whatever you choose, love what you do. :-)

5. Experiment. The way you write today will likely be different than your style in 6 months.

Hope this helps a little. Thanks for asking man.

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Jk November 15, 2010 at

Now that’s advice! I’m surely thankful. Very, very helpful. You’ve given me tips that would have taken me months to learn on my own accord. Thanks, man! I printed this out – and will be sure to put the knowledge to good use.

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Marcus Sheridan November 15, 2010 at

You’re a cool cat JK…glad you found it helpful man. :-)

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Dia November 15, 2010 at

Hi Marcus,

I like this post a lot. For sure, I agree with what you said about “compound interest.” Anyone who is serious about having his online buisness should start now, the perfect time might never come. I also agree with you what you said to JK about the fact that most people like to read short articles. I’m one of those people who like to read short articles, which is why my posts are short around 500-700 word. Thanks for sharing
.-= Dia´s last blog ..How to be more productive in life =-.

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paul wolfe November 22, 2011 at

Hee hee….still doing my homework….this is another great piece!

Paul

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Marcus Sheridan November 23, 2011 at

Did I say I’m glad to be working with someone much smarter than me Paul?? ;-)

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