How to Calculate SEO ROI
This article was first published on July 8th, 2021, and was last updated February 2024.
Successful search engine optimization (SEO) marketing consists of having more search traffic, higher rankings, and other factors that lead to more revenue and sales. How do you convince a company or business to hire you for SEO services without being able to promise them certain increases in sales? We have the solution for you. That solution is calculating ROI (return on investment) for SEO.
Calculating your SEO ROI and proving your value is not an easy task. It can become more complex, especially with their channels. However, doing so is vital to the success of a client or partner relationship.
In this article, we will discuss the meaning of ROI in SEO, why it’s important to know, how to measure it, and how to calculate SEO ROI. Let’s get started!
What’s the Meaning of ROI in SEO?
ROI stands for return on investment. ROI’s meaning in SEO specifically refers to measuring the return on investment of online search optimization for your small business.
You can calculate the gain from your investment by looking at organic search results rankings, website traffic, or how often you meet your online business goals. Finding this percentage helps you know if your current online strategy is working or if you need to switch it up. It all revolves around revenue.
Showing the potential ROI of SEO is also important in communicating the value of SEO to your clients, other departments, or even executives. This helps support why they should implement a recommendation or invest in your proposed ROI, meaning in SEO strategy.
Why is it Important to Know How to Measure the ROI from SEO Efforts?
Organic Traffic is Responsible for Most Site Traffic
Organic traffic means you don’t need to do anything to encourage or direct traffic to your site. Instead, people find you organically by searching for the things they need or want to learn more about online. Organic traffic makes up more than half of total traffic.
Now that you have successfully sold SEO services to clients, it’s important to know how to prove the value of SEO for their business. Measuring your ROI can help determine if your SEO efforts find your business in organic search.
Measuring your ROI from your SEO is Possible!
It’s not as easy to attribute ROI back to SEO as it is with other channels like paid ads, but it’s not impossible either! There are a few different ways to determine if your SEO campaign is successful.
You can track your site’s traffic, where your site ranks in a Google search, or how often you meet the individual goals of your business. Tracking your SEO success won’t be as easy as getting the analytics back after your paid ad campaign, but with some attention and work, you will be able to measure the impact of your small business SEO.
SEO is a Long-Term Investment
It takes at least 6-9 months to see results from your SEO campaign efforts. And sometimes even up to a year. So it’s important to remember that while the main goal of SEO is to increase organic revenue, a few conditions must be met first.
Business owners need to remember that they won’t rank on Google overnight or get organic traffic directed to their site immediately. Instead, it is a long-term investment that will give your business a strong foundation online to build on for years to come. And how do you prove that SEO is successful? By measuring your ROI.
What are the Challenges of Calculating and Measuring the ROI from SEO Efforts?
Measuring your ROI from your SEO efforts can be hard because, unlike PPC, or pay-per-click advertising, SEO is all about building and earning your site’s position online. There is no price attached to each organic click, and you aren’t just looking to make a sale.
SEO helps you earn your position on search engines. SEO works to help small businesses be visible in a competitive online marketplace. With SEO, the results are often earned and not paid for.
Do You Need to Measure SEO ROI?
Yes, measuring the return on investment (ROI) for search engine optimization (SEO) efforts is important for several reasons.
First, it helps to determine the effectiveness of your SEO strategy. As well as whether or not it is worth the investment cost of time and resources. Second, it provides valuable insights into which SEO tactics are working and which ones need to be adjusted or removed.
Finally, measuring SEO ROI helps to justify SEO spending to stakeholders. As well as secure the budget needed to continue and expand SEO efforts.
It is difficult to provide a specific ROI percentage for SEO. This is because it can vary widely depending on factors such as the industry, competition, and the specific SEO tactics used. However, a good ROI for SEO is generally considered at least 5-10 times the investment made.
For example, if you spend $10,000 on SEO efforts, a good SEO ROI would be to generate at least $50,000 to $100,000 in revenue from those efforts. It’s important to keep in mind that SEO is a long-term investment. These organic search results may not be immediately visible but can provide a significant return over time with the right strategy and tactics.
How to Calculate Your SEO ROI
Learning how to calculate your SEO ROI may seem like an intimidating task, but here are some steps to help you get started:
1) Calculate Your Total Investments
A good place to start is by calculating your total investment in SEO for your business. This could include the cost of working with a digital marketing agency or the cost of an in-house marketing team dedicated to increasing your company’s SEO. The cost of various software or tools a team uses to optimize your online presence and the cost of paying your employees to work on the campaign can also be included to help you calculate your total investments.
If you are a white label SEO reseller, this can be a bit more complicated. This is due to having to account for the partnership fee the white label SEO provider charges and also any software or tools used to perform SEO duties. This is a good thing to establish when discussing partnership opportunities. You can ask who is supplying what tool or software.
The white label provider may already use certain technology that is included in the partnership, but you may find that additional SEO tools can be helpful for you as you communicate and sell SEO services to clients.
2) Gather Analytics Data
Ecommerce Conversion
The Ecommerce Conversion Rate is a percentage that represents the ratio of transactions to sessions. A session refers to a group of interactions a user makes on your site within a certain time frame before they make a transaction. So, the Ecommerce Conversion Rate tells you how many sessions it takes before the user makes a transaction on your site.
If you’re an ecommerce website, having enhanced ecommerce tracking enabled in Google Analytics makes it relatively easy to find your organic revenue. Knowing your organic revenue can help you calculate your SEO ROI.
You can navigate to the ‘Ecommerce Overview’ section of Analytics and apply the ‘Organic Channel’ segment to show only the organic revenue, the number of transactions, and the average order value for the date range you’re analyzing.
To calculate the return, you will need to have the organic revenue number. Having this enabled makes it easy to figure out the revenue from SEO and then apply it to the rest of the formula and factor in the cost of the SEO efforts.
Lead Generation Conversion
If it’s a lead-based conversion, meaning the user transaction stems from lead generation and is not a traditional ecommerce transaction, you can set up custom goals and associate a dollar value to a conversion. You can estimate the dollar value if you don’t know the exact amount. This is relevant to businesses that use leads to measure conversions rather than traditional service or product purchases on ecommerce sites.
Once you create the goal and enough time has passed to gather the data, the goal will be displayed under the ‘Conversions → Goal Overview’ section of analytics. To calculate your goal value in this manner, you must follow this formula:
The Customer LTV refers to the value of a customer to a business throughout their lifetime. When applicable, this can be calculated by looking at a customer’s transaction history, demographics, site interactions, and profile data. Using this data can help you predict how the customer will behave in the future.
The Lead Conversion Rate refers to the estimated or actual conversion rate.
3) Calculate Your Assisted Conversions
Calculating your assisted conversions can contribute notably to organic SEO. It can be very common where multiple touchpoints in a marketing channel contribute to a conversion, even if it may not be the last or final channel where the conversion occurred. This would be included in the ‘SEO revenue’ number in the SEO ROI formula.
To showcase an example, it could start with a user searching for something such as “how to paint a house.” From there, they could find and read an informational article on your site about how to do this.
As a result, they could come back to your site through a paid ad and purchase products such as paint or painting services. That’s why it’s good to look at this and see how organic may have assisted referral, paid, or direct channels as well. It helps demonstrate SEO’s overall impact on revenues and returns on investments.
4) Calculate your SEO ROI
Learning how to calculate your SEO ROI can seem daunting at a glance. However, the good news is that you don’t need a fancy SEO ROI calculator to calculate positive ROI. All you need are your metrics and a formula.
You’ve calculated your total investments, gathered analytical data (through e-commerce and lead generation conversions), and included your assisted conversions. Here’s where we bring it all together. Use this formula to help walk you through it:
You start by subtracting the organic revenue you’ve collected from the cost of SEO. From there, you divide that outcome by the cost of SEO. That metric then equals your SEO ROI!
Additional Metrics That Demonstrate the Value of SEO
Keyword Positioning Improvements
Targeting the right keywords is a great way to boost your SEO and bring value to your campaign. You can use various tools to track trending keywords and help keep an eye on where your keywords rank in search results.
You can use Google Search Console, SEMrush, and Google Analytics. It is important to follow and keep track of your keywords because the better your keywords rank, the greater the opportunity it is to increase CTR (click-through rate) and traffic to your website.
CTR Increases
The CTR (click-through rate) refers to the percentage of people who click on a link from a site, email, or advertisement to view your page. Clicks are a great way to show that your keywords generate traffic by how often people click on the meta title associated with your keywords. This can be a great statistic to demonstrate the value of your SEO campaign.
On the other hand, it’s also important to note the keywords that don’t encourage site visits. Increasing CTR can help you understand where your SEO campaign is succeeding and what needs to be fixed to be successful.
Organic Traffic Increase
Traffic is one of the best ways to measure the success of a website. With organic traffic, it refers to the traffic that is directed to your page from unpaid search results. Using the acquisition channel in Google Analytics, you can measure if your online traffic increases or decreases and where it originates from. It will track and sort your data into several different groups. Go to Acquisition > All Traffic > Channels.
This tab lets you see where your users are coming from and if they are new to your site. You can also use the behavior channel in Google Analytics to filter your traffic results even more.
You can set your segment to ‘Organic’ to find the pageviews and unique pageviews. Showing the improvements in getting more organic traffic to your site is a huge accomplishment. This is because it means your SEO campaign isn’t just making your site more visible but also directing traffic to your site. This is one of the best ways to understand your SEO ROI.
Site Visit Engagement
Getting traffic to your site is great, but you also have to monitor how people are engaging with your site. You can measure their engagement by a user’s average session duration, the number of pages they visit during a session, their bounce rate, and how quickly they exit your site.
Your goal should be to get people to stay on your site for as long as possible. This will increase the likelihood of getting a conversion. But you still want them to engage with your site in an effective way.
Make sure each of your pages has a purpose; this will help you know whether a higher bounce rate or exit rate is bad or intended. And you can see where customers drop off in Google Analytics.
ROI of SEO Goals and Expectations
The best way for businesses to measure their SEO success is by managing and setting reasonable and realistic goals and expectations. What goals do you want to set or achieve through SEO? Do you want your business to increase organic traffic? Rank higher? Or do you want to increase your store’s attendance?
SEO has many layers to it, and having an idea or direction helps improve your SEO.
SEO should be the core of your business’s digital marketing strategy. When your business invests in SEO, ROI won’t be as immediate as most businesses would like it to be. SEO is a process that builds over time to improve your website’s online visibility.
Your investment in SEO will end up bringing in new customers and revenue to help grow your business. SEO even saves your business money rather than investing money into active ads for a short time.
When individuals search for something they need, most of the time, they end up searching on Google. When they search for something, most individuals don’t search for a specific product or service. They use keywords that can broaden their view to a variety of options. When your business is ranked, search engines and customers know they can trust your website as credible and trustworthy information. SEO helps Google recognize a website as a valuable answer and moves it higher in the rankings.
Oftentimes, a website can take around 6 months to reach the first page of search rankings. Your site will see more customers when you rank on the first page. Customers then move to filling out forms, calling about your services, visiting your business in person, or learning more about what you can offer them.
This traffic all results in more customers and revenue for your business to grow. SEO rankings can be the difference between your business and your competitors. Simply put, good SEO yields results for a business with more leads, customers, and growth.
Measuring Your SEO ROI Can Prove Your Value
Knowing how to measure your SEO ROI is a great way to know if your SEO campaign is successful and valuable to your small business. With a limited budget, it’s important to ensure that every dollar you spend on SEO is used most effectively.
At Boostability, we offer affordable SEO services for small business owners. And with our SEO partner program, we will help your customers get found online. So reach out to us at Boostability to learn how we can make sure your SEO efforts are successful and valuable.
