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How to Calculate SEO ROI

Showing SEO ROI

At the end of the day, no matter what the overall KPIs may be, you will
need to show ROI for the projects you’ve worked on. In the case of SEO
this is a very targeted approach because you only touch certain parts of
the product. To show value to your team, stakeholders or a client, leverage
data you collected on the metrics below to solidify your case for the SEO
campaign being on the right track.

Increase in non-branded organic traffic

Non-branded organic traffic is SEO gold as it is one of the few metrics you
can truly affect directly. If you were to compare SEO to digital advertising,
these would be your impressions. To show ROI on non-branded traffic,
leverage data found in a tool like Google Search Console and filter it by
query. Simply mark that you want to only see queries that do not include
the brand term (be careful here to not accidentally exclude non-brand
terms that share common words with the brand name). Now use this
information to compare date ranges before and after SEO work took place.
This may need to be a year over year comparison if you believe the search
demand is seasonal.

Increase in inbound links

If you are employing link-building tactics, there are a few ways to show ROI
that are relatively straight forward. You may simply look at the net gain of
links due to your efforts. And if you are going after high quality domains for
backlinks, you may want to highlight an increase in those links in particular.
Conversely, you may want to show additional links you’ve built in relation
to a theme. Here you can show that you were able to procure X amount of
links from a specific industry (e.g. links from finance-related sites to your
finance client’s site), due to SEO efforts implemented such as improving
visibility or content.

Similar to the previous ROI analysis on the growth in inbound links, you can
put a monetary value on those links and analyze “revenue” gained that way.
You might need some industry insights to allocate a price to each link, but
if you have that information you can show how content earning backlinks
is essentially earning money. Once you have the cost of links earned, you
can leverage the ROI formula the same way you would with added revenue.

Increase in traffic quality

An improvement in organic traffic quality can be shown through behavior
metrics. Though the ultimate goal may be leads and conversions, showing
that the intent match has improved is a step in the right direction. Here
you should look at changes to bounce rate (this should go down if users
are seeing content they expected), pages per session (should go up as
users want to see more on your site), and time on site (to show whether
people are sticking around long enough to engage with your content) and
potentially be exposed to calls to action.

In addition to improved engagement and traffic, you also want to show
changes to the average order value (AOV). Similar to the way you want to
measure traffic quality, showing an uptick in AOV shows that users driven
to the site are becoming bigger buyers as they are more qualified to shop
your products.

For example, if thousands of users go to your site selling athletic
accessories and on average buy $10 worth of goods if they end up
converting, many orders are probably on the low end. If this number goes
up to $15, the value of each visitor that turns into a customer is 50% higher.
This can be a case for how you have improved the quality of organic traffic
coming into the site.

Increase in revenue

An increase in organic revenue is as clear cut as it can get for a top level
executive. This is the true measure a non-SEO stakeholder will be held
accountable to. Showing how SEO directly drove increased revenue can be
done through increased Organic Search traffic, returning users, conversion
tracking and attribution modelling. The metrics you use to show increases
in revenue as an SEO ROI will depend on the changes implemented and
how they’re measured.

Additionally, you can demonstrate savings on PPC budgets as an increase
in revenue. Using paid search data, you can compare organic traffic to the
traffic generated by PPC and calculate the potential reduction in PPC
budget. This saved cost is ultimately the same as revenue and can be used
to calculate ROI of an Organic campaign.

Calculating SEO ROI

Regardless of what is being used to generate revenue, ROI is calculated
the same way: by subtracting the initial value of the investment from the
final value of the investment, and dividing it by the total cost of investment.
Using this simple formula, you can leverage your knowledge of organic
revenue changes and divide by the cost of the work that resulted in those
changes. If you have seen improvements in organic revenue, this will be
reflected by a positive ROI.

Percentage Calculation of ROI

Utilizing the formula for ROI, you can find the net return on investment
by applying the known conversions and revenue per user. For example, if
you’ve projected that 10% of 10,000 new organic users will convert at an
average order value of $50 which will contribute $25 to your net revenue
after costs, you can now do the math and see that you’ll get an added
$25,000 from this project. This $25,000 can be your rough return on
investment, so if you are spending less than that on a monthly basis, this is
a positive ROI.

If you do not have conversion values because you do not sell anything,
you can create this value based on other channels. For example, if you are
spending an average of $1200 to generate a lead by placing ads, you can
tie this cost to a lead generated through all channels, including Organic
Search . Hence, if you are driving 10,000 new organic users of whom 10%
will turn into leads, you’ve just netted $1,200,000 in lead generation value.

Conclusion

Proving the value of SEO work is not without its challenges, but it can
be done with the right forecasting and measurement in place. Because
search engine algorithms and ranking formulas are regularly changing and
evolving, the core product we rely on for driving results can be hard to rely
on. It’s therefore understandable for internal teams and stakeholders to
require projections and some sense of ROI.

Defining exact projections isn’t easy with SEO, but with the tools and
tactics outlined in this guide, you should be able to identify a range
of projected ROI, the measurements needed to show the shift in
performance, the KPIs to achieve and a guide on whether or not the cost of
SEO initiatives is worth the investment.

Armed with what you have just learned about ROI and forecasting, use
your new knowledge to inform stakeholders of the tremendous opportunity
that Organic Search presents. Your ability to offer expected results will
be an integral part of winning new business and evangelizing SEO to your
team members who do not work on it daily.

Most importantly, being able to forecast and predict ROI for SEO will
ensure you’re able to justify the budget needed in order to perform,
and show the true value of SEO efforts to both internal and external
stakeholders.

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