The SEO ROI: What Is It & How To Measure It
Any digital marketing channel that receives investment should demonstrate its value and potential. Marketing professionals know that SEO is not a get-rich-fast scheme. It requires an upfront investment of time and resources. However, if done correctly — the SEO ROI (return on investment) can skyrocket.
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75% of the internet users never scroll past Google’s first page. The marketer’s goal is to implement an SEO strategy to rank in the top SERP (search engine results pages), generate as much organic traffic as possible, and show SEO impact to decision-makers.
Marketing professionals may face the challenge of calculating the return on investment of SEO efforts. In this article, we will deep dive into SEO ROI, how to measure it and how to increase it.
What is SEO ROI?
On average, 53% of the website’s traffic comes from organic searches. For this reason, marketers need to understand the power of search engine optimization. While standard SEO KPIs, such as search rankings, require constant monitoring, the ultimate measure of success is delivering a high ROI.
SEO ROI measures the return on investment of SEO efforts. A website will have a positive ROI if the organic revenue generated by SEO campaigns is higher than its cost.
It’s important to outline that SEO campaigns take longer to generate any return on investment, as it’s in the hands of the search engine itself. On average, a minimal return on investment takes around 6 to 12 months to be achieved.
Challenges of calculating SEO’s ROI
Many marketers may face difficulties when calculating SEO’s return on investment. This mostly comes down to the fact that SEO doesn't typically have fixed costs associated with it, unlike PPC (pay-per-click).
PPC has click costs associated with the campaigns and generated results, so marketers can easily attribute the investment to a specific time. It's easy to find out an accurate number of PPC ROI.
SEO is a little more difficult to measure given that the channel is about earning organic search traffic rather than purchasing it. There is no fixed cost for the clicks or conversions generated with SEO campaigns.
How to calculate the value of SEO?
ROI of SEO calculation is similar to calculating the ROI of any other type of business investment. Marketers need to collect two metrics:
- SEO cost is the amount of money spent on SEO campaigns.
- SEO gain is the amount of money received back from SEO campaigns.
Then, calculate using the formula:
(Gross return on SEO campaign – SEO campaign costs) / SEO Campaign Costs = ROI of the SEO campaign.
Understanding SEO cost
This cost determines how much budget the business needs to dedicate to SEO campaigns. The budget can vary depending on different factors, such as:
- In-house SEO management can be hard to calculate, as it includes complex labor costs. The assigned SEO team can be working on different projects, and if the time spent on SEO is not monitored, the in-house SEO cost can be inaccurate.
- Agency outsourcing. If the business decides to work with an SEO agency, cost calculation will be easier. Most agencies work on a retainer model with a fixed monthly fee and commission for any conversions made, so the business does not need to make any extra labor calculations.
- SEO tools used for organic traffic campaigns should be added to the SEO cost. The tools and software used for SEO are often forgotten in the cost calculation or wrongly added to the technology cost.
What is SEO gain?
After calculating the costs of the SEO, there is an SEO gain. To determine the value of SEO campaigns, marketers need to measure the website’s performance metrics.
KPIs (key performance indicators) are vital to see the success of the SEO investment. These are the most common KPIs used for measuring SEO performance:
- Search rankings. The higher the page ranks, the better. It’s critical for marketers to monitor how the business ranks for key search terms over time, directly translating to how successful the SEO strategy is.
- Organic search traffic. This KPI shows how many users visit the website, for example, homepage, landing page or blog, from the SERP without any paid marketing help.
- Bounce rate showcases when the user visits the website and opts out at some point. It indicates the pages that are not engaging and need improvement. While high bounce rates can have several reasons and typically hint at technical SEO issues, observation should be granular.
- Organic CTR (click-through rate) measures the ratio of users clicking on the website because it showed up in Google’s search results to the total number of users who viewed the search results. A high CTR indicates that the business has targeted the right audience with a website engaging enough for a high percentage of users to click on the link.
- Soft and hard conversions or conversion rate. Hard conversions can be demo sign-ups, calls, registrations or, most importantly — purchases. These types of conversions are typically considered the traditional types of conversions as they show clear intent. Soft conversions indicate clear interest, for example, newsletter sign-ups, social shares and likes. While it’s recommended to focus on hard conversions, businesses should keep these two conversions in balance. Soft conversions lead to hard conversions, which most companies are aiming for.
- Pages per session (PPS) is the average number of pages users visit during one session. Highly related to bounce rate, a high PPS rate means that users find engaging content and are easier to convert.
- Organic impressions showcase how many times the website has been seen for all search queries performed. Tracking organic impressions can help measure improved results for key search terms.
For SEO KPIs monitoring, most of the marketing professionals use reporting tools. Marketers can connect to different sources and view the KPIs such as pages per session, organic CTR and traffic in the real-time dashboard and create visual reports with the most important performance metrics. Whatagraph offers marketers pre-built Google Analytics templates, which eases the labor-intensive process of data aggregation and reporting.
The reporting tool is also great for making data-backed insights. It provides the aggregated and cleaned data in an easy-to-understand report so that the marketer and the client can see what SEO efforts deliver the best ROI and what campaigns need optimization.
How To Increase ROI of SEO
Although generating a high ROI from SEO campaigns is a constant work in progress, there are a few steps a marketer can take to help generate more organic traffic and increase return on investment of SEO.
Maintaining a fast, mobile-optimized website.
In 2021 Q1, almost 55% of the worldwide web traffic was generated using mobile devices. Search engines such as Google or Bing determine where the website ranks in SERP by looking at website speed and mobile friendliness. And when you think about the ROI of SEO, rankings are critical.
To see how the website is performing and get insights on how the website can be improved, marketers can use Google Analytics’ Test My Site feature.
Website optimization usually includes the following steps:
- Enabling browser caching;
- Reducing server response rate;
- Compressing site images;
- Using external video hosting websites such as Youtube or Vimeo.
Creating SEO-friendly content
Content is a great way to increase SEO ROI. Well-written content is a long-term investment. However, it not only allows visitors to find relevant content and get to know the business. SEO-optimized content is also great for ranking in high search engine positions.
There can be various types of content, for example:
- Blog articles relevant to the business’s target audience;
- Product pages;
- Guides or How To’s;
Optimizing old content
Content optimization matters for ROI of SEO for three reasons:
- Content decays over time. Outdated content can lead to lower rankings in search results because both the searchers and search engines recognize that it’s old. Whether due to its publication date or outdated information, which simply makes the content irrelevant to the date.
- Content carries long-term value. By updating evergreen content, marketers can maximize its value and reappear on top of the SERP.
- Search intent evolves. New technology, algorithms, regulations and standards are changing. Marketers can jump from the search engine’s bottom line to the top positions by updating and optimizing it and increasing organic traffic.
Here are some tips on where to start when optimizing old content:
- Run a full blog audit and determine, which content drives the most organic traffic, is the most relevant to the business and ranks on the first, second or third search engine pages.
- Conduct keyword research to find additional related keywords to target. You can use tools like SEMrush or Ahrefs to help you do keyword research.
- Use the core keyword in the headline, meta title and first 100 words of the article.
- Update any outdated practices, statistics or studies.
- Optimize the images, GIFs and videos or change them accordingly to the relevance.
- Search engines prefer the sites having unique and relevant content and take them at the top of SERP. The exclusiveness of the text is an integral part of the article that makes it inspiring and catchy. The use of an online plagiarism checker will be advantageous in detecting the duplication in content.
Targeting long-tail keywords
Keywords are the essential part of search engine optimization. Marketing professionals have to find relevant keywords, determine the search intent, and mix them into content and meta tags. It helps to attract potential customers to the business’s website and rank in the SERP. There are two keywords types:
- Long-tail keywords are three to four words, like “top marketing agency Canada”.
- Short-tail keywords are one to two words, like “marketing agency”.
Long-tail keywords have a smaller search volume. However, it can attract the ideal customers while facing less competition, targeting more specific intents. In comparison, “marketing agency” results face more competition, as it is a more generic keyword. If the business’s website ranks in the bottom-line positions, it may result in nearly low-to-zero traffic numbers. Ultimately, improved performance of SEO can increase customer satisfaction, lifetime value and revenue.
Knowing the ROI of SEO is powerful information. It can be used to get further buy-in for additional investment and showcase the SEO campaigns’ success, which are generating financial returns to the business.
By constantly monitoring and tracking SEO performance, marketers can make data-driven insights and optimize the campaigns to get the best possible results. At the end of the day, all that matters is how much one dollar invested in SEO services brought profit back to the client.
Published on Aug 11 2021
WRITTEN BYBenediktas Kazlauskas
Benediktas is a detail-oriented writer with a passion for marketing and technology. Using his vast experience in Business Management and Sales, he approaches every blog with the same idea: How to make readers come back for more?
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