Return of Investment is the metric used for judging the success of an SEO strategy that is based on the estimated return of the initial investment or cost to push it live. Search volume and organic traffic are leading indicators when you evaluate SEO performance. At the end of the day, all that matters is revenue. If you want to communicate the value of SEO to a client, showing the potential of ROI is very important.
SEO ROI is the calculation that typically measures the return of investment of the SEO. The companies can calculate the SEO’s return on the investment by looking at the search engine rankings, goal completions and organic website traffic.
SEO ROI estimates the business value of all the SEO activities. It is the most common topic any SEO consultant or manager has to address when allocating marketing budgets and resources.
Calculating ROI is straightforward. However, in SEO, there are many caveats one should be aware of. These caveats make measuring and interpreting the ROI of the most complex and challenging problems one can face.
How to measure SEO ROI?
Below is the formula for measuring SEO ROI-
SEO ROI= (Value of all the Organic Conversions – Cost of SEO investments)/ Cost of SEO investments
1. Set up conversion tracking
If you set up conversion tracking in Google Analytics, you can track all of the conversions on your site that earn revenue. The setup depends on whether you make sales directly on your site or not.
The eCommerce stores can use eCommerce tracking to pull the data from their online transactions and measure their exact online revenue. This data for the online returns is exceptionally accurate.
Lead-based businesses can set up conversion goals like lead form submissions and assign dollar values to those goals.
How to set up the conversion tracking for measuring SEO’s ROI?
If anyone wants to track the revenue from an eCommerce store in the most impeccable way, then they should set up eCommerce tracking using Google’s instructions. The sooner you will start collecting the data, the better.
2. Lead generation- How to set up the conversion tracking for measuring SEO’s ROI
If you do not make sales directly on the website, getting exact data on how much revenue you generate could be challenging. The most accurate estimate comes from assigning dollar values to your on-site conversions based on past sales data.
3. Sort your conversion channel
Select the conversions tab at the top of the report, and you will have all of the modifications on your site within the selected time frame sorted by the channels that drove them.
4. Calculate your SEO ROI
You should determine how much revenue you have generated during the specific time period, and then you can compare that particular amount to your SEO investment during that particular time and determine your ROI.
Some businesses determine ROI by dividing the total revenue by the net profit from each sale.
Most of your customers will visit the site multiple times before converting, whether that conversion is a purchase.
A user may discover your site in a search engine, spend their first visit browsing your product pages, and then leave the site without buying anything.
Later they could return to the website and make a purchase.
Here, organic search assisted in the conversion.
One needs to divide the SEO profit by the associated SEO costs.
Calculate your SEO investments
Organic search is devaluing the huge time investments that go in it. It is viewed as a free traffic channel.
The SEO investments are divided into four types of categories-
- In-house employees
One should count on dedicated SEO and content creation staff. However, one should also account for the required designer and developer resources.
- SEO freelancers and agencies
The SEO freelancers and agencies that you hire are the ones measuring SEO ROI.
- SEO tools
One should count in all the subscriptions for dedicated SEO tools. You can also partially include the cost of tools used by the marketing department.
- Content distribution and link building
SEO does not end with publishing content. One should also consider partially including the cost of content promotion efforts. If you could buy links as one of the link-building tactics, you should also count that in. Even though many SEOs warn one against buying links, the reality of link building is very different from what they portray.
2. Calculate the value of the organic traffic conversions
It is important to have proper conversion tracking in Google Analytics to get this number. One should also segment this traffic to check the value of conversions that you want to account for in the ROI calculations.
The different types of conversions and how you assign the conversion values will differ from one business to another.
3.Take assisted conversions’ worth into consideration.
One had to get used to working with the default last non-direct click attribution model in Universal Analytics.
It has become a flawed model now as it assigns 100% of the conversion credit to a single marketing channel that is closest to the conversion event.
Your website drives organic traffic at all stages of the customer journey. For instance, people or your targeting audience may land 10 of your articles from Google and then convert after clicking a search or a retargeting ad. In this particular scenario, you want to see that organic search contribution.
The paradigm shift to Google Analytics could partially solve this problem by utilising the DDA or the Data drive model.
The conversions or the values that you see in the reports already account for the partial conversions of the organic traffic. If you use Google Analytics, you technically do not need to dive into the assisted conversions report.
Many people make use of On-page SEO services which are the search engine optimization services that optimise your website for improving its organic visibility in the search results and they will focus on keyword research and content creation.
Below are the challenges of measuring SEO ROI-
Marketing attribution is inherently flawed
One of the topics that provoke many discussions is marketing attribution. Attributing conversions to marketing channels is flawed regardless of the attribution model used. Heuristic models will be much more flawed than the new DDA.
Organic search traffic is a type of marketing channel that can span the whole customer journey from awareness to retention. DDA is a solution for this that will likely shift many people closer to the camp.
2. The connection between SEO and brand-building
Let’s say you hover through various types of Youtube videos and see someone talking about an interesting product. You search that product on Google and head to the website and also make a purchase. Organic traffic gets a 100% attribution for the conversion.
You can also have strong SEO with high search visibility on the SERPs throughout the entire funnel. You can convert many prospects from start to finish.
Social media ads and search ads make a bigger contribution to the conversion.
3. One cannot measure the retention impact of the SEO
Experts often produce product-led SEO which is constantly educating the customers about all the ways they can use our tools for solving their SEO and marketing problems.
The retention impact of the SEO can be divided into two types of categories-
- People start using more and more tools which leads to lowering churn rates.
- The content about tools and features that are included in higher-priced plans make people upgrade their monthly subscriptions.
One should also keep a check on the following-
Huge time discrepancies between the investment and return periods.
Various investments and returns over certain time periods are the variable in calculating ROI. It is impossible to tie specific investments to specific returns in SEO when one looks at the business level.
2. SEO testing has limited capabilities
If you want to understand the contribution of a marketing channel you should stop running campaigns on it for a while. Organic search is one of the most important channels for many types of businesses. Sabotaging your own SEO can have detrimental effects.
3. Forecasting future ROI
Setting up the SEO objectives and making sure that we are on the right track is an extremely crucial part of the job.
One should also consider the below factors when coming up with specific numbers-
- Past SEO performance of the page.
- Compounded traffic potential of the content.
- Estimation of an average conversion rate.
You should have conversion available for similar content in the tracking software. You can also look up other websites in your niche. You can also extrapolate and estimate the outcome of the SEO activities.
Conclusion
A successful marketing campaign will show development in each of these areas, and the ability to spot potential declines in particular areas will help you identify issues and, if necessary, rethink your plan. It may not always be easy to demonstrate the worth of SEO, but a well-planned campaign with measurements will yield tangible outcomes.