Struggling to understand whether your SEO strategy is worth the investment? Don’t worry. This is an industry-wide problem, as most businesses fail to grasp the complete picture of their SEO efforts.
Focusing on KPIs like traffic and rankings will hardly unearth your ROI. After all, the end goal of any business is not to get more traffic but to expand the bottom line.
As the SaaS SEO agency, we understand any marketing strategy that requires investment needs to demonstrate its value. In this guide, we’ll walk you through all the steps of calculating ROI for a well-crafted SEO strategy and how you can improvise the same.
What We'll Cover
What is ROI for SEO?
Return On Investment (ROI) is a key performance metric most businesses use to track success.
It helps you understand if the budget you spent on a strategy was proper or what results you should expect moving forward.
Calculating ROI may seem pretty straightforward. For example, suppose a company invests in PPC (Pay-Per-Click) advertising. In that case, the company knows the exact amount they are spending for each click on the ads and the cost of the internal team (or agency) managing the campaign.
But with SEO and organic search, there is no fixed cost per click. While you may figure out the internal costs, quantifying the traffic and conversions you’re getting through your SEO efforts becomes difficult.
You need your SEO ROI to answer questions like:
- When my page ranks higher, what would it mean for my business in monetary terms?
- How much is a new website visitor worth?
- How does an increase in session times and engagement impact our revenue?
You can measure the correct ROI for your SEO strategy by finding the answers to these questions.
How long does it usually take to generate an ROI from SEO?
This is one of the first questions any business leader has when they start their SEO strategy. But sadly, there’s no definitive answer to the question.
If someone promises guaranteed results in a week or a month, they’re either naive or a snakeoil salesman. Neither is good for your business.
The reason is that the ROI of your SEO depends on many variables, like how well you have devised your organic search strategy, the size of the business, the target audience, the competitive landscape, and the investment you make.
Generally speaking, it may take anywhere between a few months to a year to generate a significant ROI from your SEO strategy.
The challenges of calculating SEO ROI
Here are some challenges you may face while calculating SEO ROI:
- You may not be able to measure intangibles such as organic visibility, brand building, awareness, and the number of people that believe you’re the expert in the field because your articles rank on the first page of Google
- It is difficult to estimate the costs when it comes to SEO. After all, the costs involved in organic search are not as simple as taking the cost of paid search.
- Forecasting future SEO ROI can be tough as you don’t know how a change in your SEO strategy will impact returns.
How to measure ROI for SEO?
To calculate SEO ROI, the formula is:
But there are a lot of steps that go into calculating the revenue and costs for SEO. Let’s learn about them.
Step 1: Calculate SEO investment
Before you calculate the return, you must have an idea of the costs associated with SEO. Unlike paid marketing, SEO costs aren’t fixed. Here are four costs you need to consider:
- In-house SEO team: If you have a team dedicated to SEO, calculating the cost would be simple. But if you have a team that works on multiple things, like copywriters and research analysts, you should ask them to track the time they spend on SEO tasks. You can then sum up the hourly or daily rate based on the time tracked.
- Agencies or SEO freelancers: If you are working with an agency or freelancers solely for SEO purposes, calculating the cost becomes simple as they usually charge a fixed monthly or per-project fee.
- SEO tools: Ensure you don’t forget to include the cost of SEO tools such as Ahrefs. If you use multiple tools among different departments, you can also partially include the cost for those tools.
- Other miscellaneous costs: You may also partially include link-building and content promotion costs to the total as they are closely tied to your SEO strategy.
You can combine all these costs to get the calculation's final “investment” or “SEO costs” figure. You can do this every month.
Step 2: Calculate the value of organic conversions
While the conversion values and type of conversions will differ from business to business, you can use Google Analytics to get the value of organic conversions.
All you need to do is open your Google Analytics account, segment the traffic to “organic,” and check the value of conversions that you need to account for in the calculation.
Getting this number is a little more complex if you're a lead generation business. Assigning a dollar value to new marketing or sales-qualified leads is a way out.
You can do this in Google Analytics by following these steps:
1. Go to Admin > View > Goals
2. Choose custom goal
3. Next, choose a goal type, and you’ll see an option to assign a monetary value to the goal.
You can then use this to calculate the ROI of your SEO. But how do you determine what this value should be?
One way is to multiply the Customer Lifetime Value (CLTV) and your lead conversion rate. For example, if the average CLTV is $5000 and your conversion rate is 10%, your goal value should be $500.
4. Go to Conversion > Goals > Overview to get the final value of organic leads.
Step 3: Account for the value of assisted conversions
When it comes to measuring SEO ROI, Google Analytics, by default, uses the Last Non-Direct Click conversions. This means that the conversions are attributed to the last channel that drove a visitor to your site.
As most businesses require multiple interactions to convert, you need to account for assisted conversions as well. For example, a person may have seen 4 of your articles in the top Google search results first and then clicked on a retargeting ad to convert. You might want to count that initial organic search contribution in such a case.
To help you know the true value of each channel, you can follow this step in Google Analytics:
- Go to Conversions > Multi-channel funnels > Assisted Conversions
You’ll see both the assisted conversion value and the last click value.
Understanding this will help you determine the correct impact of your SEO strategy on revenue and returns.
What is a good ROI of SEO?
When we think of ROI from SEO, we often think of an increase in conversions, website traffic, or revenue. But when a person sees your business’s articles being ranked on the top search results or when they search for a keyword and your business comes up, they are also becoming more aware of your brand.
You should consider these intangibles too. So, a good ROI of SEO will include a combination of:
- Increase in on-page conversions
- Increase in awareness and engagement
- Increase in visibility (traffic, sessions, and mentions)
- Increase in reach of SERPs as compared to competitors
- A reduction in paid investments like ads, boosts, etc.
- Decrease in overall SEO costs with time as your content gets a boost on Google
How to improve ROI of SEO?
As SEO is an ongoing process and it may take several months before you start getting the estimated results, you should constantly track your progress and be prepared for fluctuations.
Here are four strategies you can use to get a good SEO ROI:
1. Focus on creating evergreen content:
To get the best ROI from SEO, it’s necessary to create content that keeps bringing traffic to your business. For example, the topic “How to get more engagement on your Instagram posts?” is evergreen. People will always want to increase their engagement, and the answer, more or less will remain the same.
But if you create an article on a time-sensitive topic such as “Instagram in the age of recession,” the article will attract little to no traffic in the long run. The key is not to eliminate this kind of content but to decrease it.
Notice how Mailchimp focuses on creating evergreen content to get positive ROI:
2. Focus on long-tail keywords
Keywords form a crucial part of your SEO strategy. Researching relevant keywords, determining their search intent, and mixing those keywords in your content and meta tags will not only help your content rank higher but also lead to people finding your website.
Instead of focusing on small-tail keywords that are highly competitive, you should include long-tail keywords in your list. Let’s take an example to understand the difference.
- “Instagram engagement”
- “How to improve Instagram engagement”
- “Instagram engagement for business”
- “Instagram engagement for reels”
As long-tail keywords are more specific, they can bring the most qualified traffic to your business and help increase conversions, sales, and revenue.
3. Focus on content re-optimization
Outdated content can result in lower search engine rankings as researchers and search engines recognize that the content is old (due to its publishing date or information) and thus makes it irrelevant to a user’s search.
To avoid this, you can carry out a content re-optimization SEO campaign that consists of the following steps:
- Start with pages that rank high on Google
- Determine the search intent
- Find additional keywords to target
- Update any outdated statistics, research studies, or practices
- Add helpful visuals like infographics or GIFs
- Submit a crawl request in Google search console
Google may then take a few days or weeks to crawl the page, but when it does, it’ll see the updated information and tweak the search results and position of your page accordingly.
4. Make use of local SEO
Local SEO means optimizing your website to rank for keywords specific to your location. Many people choose to work with businesses in their area or city, making local SEO important.
For example, when you search for “cleaning agencies in UK,” you get the following results:
Getting on the local search results will mean your users get to know your website, phone number, working hours, and more. This information makes it easy for users to know your brand, the products/services you are offering, and how they can get in touch with you.
You can either make use of a local listing management tool to streamline the process or do it yourself by using Google My Business and then moving on to add the information.
You could be seeing amazing results thanks to your SEO efforts. But only when you calculate the ROI do you understand whether those results can be sustained in the long run. After all, you don’t want to spend a lot on SEO campaigns that bring minimal revenue.
You can even use SEO ROI to showcase the success you’re getting in financial terms. This helps you get further buy-in for additional investments from your managers or clients if you are an SEO agency.
If this seems too complicated and you want expert guidance regarding your SEO strategy, get in touch with MADX today!
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