It looks like content marketing shouldn't work. Which one of my assumptions is wrong?

Unfortunately all the numbers are off. Content builds on itself in an accumulative fashion. Much of it is unquantifiable, but the success comes as breakthrough success after building your authority over time (atleast 18 months of consistent publishing content.)

Those 1000 monthly visitors should be growing consistently every month over time. If it is not growing you are not producing valuable enough evergreen content.

The list should be growing your traffic, not just sales...it should be a referral machine.

Are you engaging your audience when they interact with your content across various social channels? Is your content being linked to and shared organically? If not, you aren't really doing effective content marketing.

Are you constantly testing your emails and landing pages for improvements to conversion rates, analyzing which content is producing the most signups, sales, etc... If that is not growing exponentially you are doing something wrong.

Are you advertising your best content using native ad platforms like stumbleupon, outbrain, taboola, yahoo gemini? Why not? If your content is not valuable enough to drive signups and sales when you promote it, you are doing content marketing wrong.

Are you adapting your content into multiple media types and syndicating it? (i.e. a blog post can be shortened into bullets for a slideshare presentation, which can be used a slideshow video on youtube, and an audio reading of your post can be on soundcloud, syndicated as a podcast, etc...

Are you doing blogger outreach to generate interest in your content? Are you guest blogging to leverage other peoples audiences?

Content marketing is an accumulative effort, which when done right builds on itself accumulatively and snowballs into breakthrough success (i.e. look at moz.com and copyblogger.com both massive startups which started with simple content marketing.

I hope this helps.

I have landing-page content marketing opt-ins that routinely perform from 30 to 40% (http://cl.ly/image/1i3z1K3z1K3b) and one of my clients has a site-wide opt-in converting from 6 to 10% of site visitors.

The key to numbers like that are a strong match between your site traffic's intent and the opt-in offer. As an example, any time I guest on a podcast, my answer to "how can people find out more about you?" is to send them to http://positioningcrashcourse.com (which is not about me at all, but is a premium content resource that serves as the mouth of my funnel). That's the page that converts as well as 40% and normally converts at 30 to 35%.

I call this "getting your own traffic", and it converts at very high numbers relative to paid traffic or even organic search traffic.

So if you approach traffic generation in this way (or another way that sends warmed up, qualified traffic to a landing page), your 2% traffic --> list number is potentially way off.

The other reason why you're seeing so many others talk about content marketing as the holy grail is because it _is_ the holy grail... of building trust and demonstrating expertise.

It is not the best way to drive short-term sales tho.

But if you have a more medium to long term view, content marketing is a great way to attract leads and nurture them towards being ready to buy.

If you're an author (who is by definition sloughing off content all the time), this is a viable strategy because you're in it for the long haul with your audience, and time is on your side (see "Your First 10,000 Copies" for more details). If you're trying to drive e-book sales for minimal cost, it probably is not a great strategy.

You have the variables right. The values are all going to depend on your funnel design and effectiveness. You look like you are using an e-book as your lead magnet to get people to register. I would suggest you would only want to give them that e-book if they provide their email address, which drives your initial lead opt-in. From there it's your job to have more offers for them in order to make sales. You would have a thank you page offer for activation and then you'd have backend offers for higher dollar services or products now that you have activated some of the customers. You can also get more complex with different email campaigns and branches depending on their behavior in the funnel.

One thing to keep in mind is that 1,000 visits is not very much traffic. Your other numbers are probably off slightly, especially since you can upsell people who do buy in order to generate more revenue, but more importantly, in order to make money with content, you'll need to generate a lot more than 1,000 visitors per month.

The controversial answer is ... content marketing might not be right for every business model. Some businesses with a high LTV (lifetime value) client might kill for 1.8 sales per month, whereas those in the "widgets", stack high, sell low, business would struggle to make ends meet.

That said, and assuming yours is a business where the LTV is considerable, there's more work that can be done to improve those figures. I see conversions from visit to opt-in of 20-50% for our highly-targeted and compelling offers. If you were to replicate the lower end of this, you would see 200 people joining your list. If your sales conversion held true, you'd be making 18 sales per month - would that prove profitable?

Content marketing is a largely iterative approach, and works best when it meets the following criteria:

1. Offers are targeted at one particular and very specific buyer persona. The prospect MUST recognise themselves in the situation you're discussing.

2. Performance and conversions are tracked, split-tested, and optimised over time. This is the only guaranteed way to improve performance over time.

3. You repeat the process. Unsurprisingly, those companies with more landing pages, offers, and email follow-up's convert exponentially more business.

My experience is limited to the world of B2B, but the above holds true for most cases I've encountered. I hope it helps.