Which one of your marketing investments is driving the most conversions? Check out this Data Snack and increase your conversion rates by source.
Data Snacks | Jul 30
Jessica Malnik on December 11, 2020 (last modified on April 22, 2021) • 22 minute read
In hindsight, the ROI of a proper SEO strategy looks obvious. In fact, a common sentiment you hear founders and marketers say is “I wish I would have started investing in SEO six months earlier.”
However, in the early days, showing the ROI of your SEO campaigns can be like traversing a corn maze with a blindfold on.
There are plenty of opportunities for wrong turns, dead ends, and self doubt to creep in.
This causes many marketers to overcompensate and put together 20-page SEO reports with every metric they can find.
These reports collect dust because no one wants to sift through a lengthy report to try and understand what’s working.
The result – many brands throw in the towel and abandon their SEO efforts before their results are realized.
Chances are – if you are reading this post – you don’t want to make the same mistakes.
So, we’re sharing more than a dozen different ways to calculate the ROI of your SEO campaigns, including:
One of the reasons why calculating the return on investment of your SEO campaigns in the early days can be so tricky is because there is no universal formula that can provide you 100% accurate results. Your ROI will depend on many different factors including the type of business, your specific strategy, and the costs associated with it.
For example, if you run a Shopify store selling luxury pet supplies, your primary KPI might be product sales.
However, if you are a veterinarian, your main KPI might be new appointments booked.
And, an affiliate site that reviews popular pet supply brands might prioritize organic search traffic growth.
Now, why should you measure SEO ROI? If you don’t know exactly how much money is returned for every dollar you invest in your SEO strategy, you ultimately can’t identify which channels are performing best and which ones should be adjusted or improved.
The ultimate measure of success for any business strategy, including SEO is delivering strong ROI. Also, without calculating ROI, you can’t know if your SEO campaign is really worth the effort, right?
Because there is no universal approach to calculating SEO ROI, it is important to understand your business’s goals and how your marketing efforts fit in. Then, you can work backward and identify the main KPIs for your SEO strategy.
However, if you are looking for ways to forecast SEO ROI, use these 2 approaches recommended by Max Roslyakov from SEMrush.
Roslyakov explains how they calculate the ROI of SEO campaigns: “We use two approaches:
Now, which metrics should you focus on in order to measure the ROI of your SEO efforts? Of the marketers we surveyed, 47% of them said that sales was the primary KPI you should pay attention to.
In addition, when you are choosing your SEO KPIs, it is important to consider both leading and lagging metrics.
Tommy Landry of Return On Now says, “SEO can’t be measured in a myopic fashion, since each piece of it that you complete will help in different ways. For example, on-page alone won’t get you #1 rankings unless you already have high domain authority.
So, we split ours out into leading and lagging KPIs. If we are only working on the on-page optimization, the most important metric in the near term is increase in total number of keywords. Given Google’s semantic match focus, this is where you’ll first see indicators that the on-page has taken effect.
If we are working on link building over time, we’ll start to track specific rankings. For any of these, we do want to check in on organic traffic, of course, and leads are definitely something we want to see increase as well.
In fact, we’ve helped companies fix their on-page optimization only to lose traffic….while tripling lead volume. It really depends on the specific website and domain, as well as what previous and current mix of work can be taken into account, and the metrics vary depending on that mix.”
Here are the top ways that marketers are performing data calculations when it comes to measuring the ROI of their SEO campaigns.
As we alluded to above, sales is the most popular KPI for monitoring how effective your SEO campaigns are.
“Contrary to popular belief, SEO success is not about an increase to organic traffic,” says Travis McGinnis of Vye. “It’s about generating revenue from that increase. If your SEO efforts are not impacting the bottom line, then they’re missing the mark.
Change the strategy to go after terms your ideal buyer is looking for. This may very well decrease organic traffic, but as long as the efforts are generating revenue, it’s a win.”
James Rice of Practice Aptitude Tests says, “The only way to properly calculate ROI for SEO is to look at sales generated by organic visits, and then to compare that to costs (including spend on salaries, tools, and freelancers for any SEO work).
Organic revenue at its most basic could be based on those sales where organic search delivered the last click. Much better would be to use an attribution model, weighted towards first and last click, to give a better impression of how SEO is generating leads that ultimately converted to sales.”
Luke Marchie of Franklin Digital adds, “Calculating SEO ROI should always be based on the actual revenue hitting your client’s books. For eCommerce this is very straightforward – setting up Advanced eCommerce tracking in Analytics is enough for you to directly pull the monetary value of the organic traffic you are driving and use some simple formulas to determine the ROI based on how much you are spending on SEO.
For service based and local companies without an eCommerce component (say who are booking leads), this gets more complicated. In this case, you need to dig a lot deeper than just what you can pull in analytics in order to find out how much these form fills and leads are worth to your client.
I would typically calculate the SEO ROI for local/service businesses via the following method:
Once those turn into a source of revenue for the client they need to immediately write down how much that lead was worth.
It can take months to years (say for lawyers) for the full revenue of a lead to be determined, but once you have enough data it’s easy to calculate on a monthly basis the revenue your efforts provided, and use that to even calculate the average revenue per lead – which you can then pull into Analytics for a quick average of how the site is performing.”
For example, Bob Bentz of Purplegator says, “SEO is often a difficult investment to justify so when times get tough for a business, it is often the first thing to be cut out. That shouldn’t be, however, because SEO is the “gift that keeps on giving” when it’s done correctly.
Of course, the penultimate KPI for almost any SEO campaign is increased sales. But, with many products, the sales cycle can be long and there are multiple consumer touch points along the way. After all, buying new flooring isn’t the same sales cycle as ordering a pizza.
So, a business needs to have internal KPI’s to be sure that the SEO campaign is on the right track and the company has time to pivot if necessary. Increased traffic to your site, and increased traffic to your targeted keywords, is the first thing that you should analyze, but it’s certainly not the last thing.
Often, companies can attract additional search traffic that is not highly qualified. Hence, you need to also have a conversion factor on your website as the second KPI to measure. That might include a form fill or calls to the office. Using call tracking numbers is a great way to maintain a record of the incoming leads that may not convert for several months.”
”Sales is our north star when it comes to any marketing ROI – did our efforts make us more revenue,” says Quincy Smith of Mira. “For SEO, we look at assisted conversions from organic traffic and occasionally segment further based on the landing page.
What we’re looking for is the % of sales generated from a customer who arrived at our site, somewhere in the buying journey, organically. You can also look at the % of first- and last-touch attribution but for us, assisted conversions is a good quick look at how we are doing.”
“It is important to track the number of qualified leads and/or sales coming from organic in order to determine ROI,” says Jasz Joseph of SyncShow. “Too often, people measure organic traffic and rankings and, while these can be indicators of success, they do not directly result in ROI.”
“The easiest and most convenient way to calculate ROI from SEO work would be to look at overall organic traffic increases to specific URLs,” says Jason Berkowitz. “Next, compare the increased traffic to new non-branded keyword positioning. Lastly, tie it all together with analytic goals (sales, lead, etc.) strictly from organic search.”
Steve Yanor of Sky Alphabet Social Media says, “In the case where limited or amateur SEO has been done, traffic is the best way to measure the ROI of SEO, especially if there are no paid generators of traffic in place.
For example, if a corporate brand has an identifiable advantage but no on-site technical SEO and no Adwords or pay-per-click program, you can envision the way forward as
Salva Jovells of Hockerty explains, “It usually takes months to see results after working on content creation, website improvements, or website experience. However, a fair approach would be measuring the organic traffic improvement and attributing to it a value based on the CPC you would be willing to pay for it. Then on the investment side, you can add hours cost, backlinks, website improvements, and content creation costs to build an ROI equation.”
Shana Haynie of Hearst Bay Area adds, “Measure the growth of your organic traffic over time and see if it correlates to the number of qualified leads you’ve converted.
If your website is set up correctly with relevant on-site offers and search-optimized content that speaks to your target customer, the more traffic you generate from organic search, the more people should give you their email address or make a purchase.
If you run an e-commerce store or some other B2C site where purchases are made directly on the website, tracking ROI is easy. You just analyze how much money is attributed to organic search as a source in order to determine how much the channel is worth to your company.
In B2B, it’s a bit trickier, but if you use a tool like Hubspot, you can run reports that allow you to see how much money is tied to organic search based on your sales data. If someone comes in through organic search, converts, and becomes a customer a few months later, this can be attributed to SEO.”
For example, Nate Nead of SEO.co says, “We typically measure our SEO ROI by relevant organic traffic (not just general traffic) only to our commercial intent pages AND the leads that flow therefrom. If we receive leads from non-commercial and blog pages, we count those as well. In most cases, we are seeking data that has a direct impact on revenue. Otherwise, we cannot measure ROI.”
“An increase in quality traffic that drives more conversions is typically a sign that your SEO campaigns are performing well,” says Mudassir Ahmed of Blogging Explained. “To explore this metric, visit the audience behavior section of your Google analytics. You can calculate the quality of the traffic by measuring the bounce rate, pages they land and visit further, etc. The more time the visitor stays and engages with your content, the better ROI you are achieving.”
Jonathan Aufray of Growth Hackers Services adds, “To measure ROI for your SEO work, first you need to be aware that SEO is a long-term strategy, not a short-term one. If your organic traffic is low, your SEO work will help you rank higher gradually but don’t expect results overnight. You need to evaluate your SEO efforts every quarter, not every week or every month.
To calculate its ROI, you don’t just want to measure your organic traffic, you want to actually pinpoint whether your organic traffic is qualified and targeted. If you sell skincare products but you get organic traffic from gambling keywords, this is probably useless. So, what you want to do is to actually track the number of leads and sales you get from SEO. This is how you will calculate ROI.”
Not all leads are created equal. While tracking all leads might be enough for some businesses, many businesses will want to take this metric a step further and segment leads based on additional criteria such as marketing qualified leads (MQLs) and sales qualified leads (SQLs).
“We track two metrics to measure SEO effectiveness – organic traffic and leads,” says Nikita Agarwal of Milestone Localization. “To measure ROI on SEO, we only use the number of ‘sales qualified leads’ generated. Converting a lead to a sale depends on hundreds of factors that have little to do with marketing or SEO.”
John Locke of Lockedown Design & SEO says, “The entire point of SEO is usually to generate more qualified leads, and ultimately more revenue for our clients. If I was to ask every client on our roster, I’m confident every one of them would say leads or sales are the most tangible way they measure the success of an SEO campaign. Ranking and traffic is cool, but at the end of the day, we measure ROI by how many leads or sales our clients receive after hiring us to do SEO.”
Leonard Raleigh of OptimizeMyFirm adds, “Many of my clients focus on rankings while I focus on leads. Do we have that backward? After all, I am an SEO provider. While rankings are a priority here, at the end of the day, the number of leads my clients receive from our work proves their ROI.
I work with law firms and measuring leads is difficult. Sometimes there are problems with staff members answering the phone, how they answer the phone or even their “intake process”.
Aside from issues beyond my control and branding which I simply can’t track, the main way we calculate ROI is showing some kind of number of leads generated.
We are able to measure leads from campaigns such as PPC, Local Service Ads, remarketing, social, and via call tracking on the website. However, for the types of firms we work with, the best way to calculate ROI is to simply ask people who call “how did you find us?”.
The answers can be surprising – for example, I recently had a client who was being recommended by a local jazz club. Of course, this is not a one size fits all solution and larger companies will likely need to rely on conversion data.”
“Sometimes it’s possible to directly attribute revenue to campaigns (for example when new pages are created), but normally SEO changes impact large numbers of pages in a small, gradual way, and this can be far harder to pick up,” says Tom Capper. “My preferred method is counterfactual forecasting – pick the time period when the change was made, and forecast what would have happened otherwise, then compare the difference.
Obviously, you need to make sure that your forecast takes as many external factors into account as possible – seasonality, other site changes, PPC behavior, and so on.”
“When it comes to calculating the ROI of my SEO work, I keep the process as simple as possible,” says James Canzanella of IM Nights. “I have a spreadsheet that has a list of every expense that’s related to my SEO efforts, along with the money that I’ve made from SEO.
That spreadsheet gives me the total numbers for the amount invested and the amount returned, and I can either do some simple math or throw those two numbers into an ROI calculator if I want the exact number.
All in all, it’s a very traditional method but it certainly gets the job done.”
Alex Birkett of Everything But The Plant says, “No ROI calculation is going to be completely accurate, so I like to try to analyze the objective costs and direct returns, and then count everything additional to that as a bonus upside.
In other words, I build a growth model that includes traffic, conversion rate (direct, last touch), and average order value. I calculate costs in a purely monetary sense (cost per article). And sometimes I project future growth, as SEO is a long-term channel. But I exclude longer cycle attribution (even though SEO almost certainly acts as a first touch, it’s hard to measure), time costs, and any brand awareness benefits that are hard to pinpoint. All of this is a serendipitous upside, but I build the model as if it were direct response.”
Amy Fowler of Sweet Digital adds, “You need to make sure you have conversion tracking set up in Google Analytics (eCommerce tracking for eCommerce sites and then lead for conversions for lead generation). If you’re a lead gen site you also need to set up goals and assign them a monetary value. It’s also useful to implement call tracking (if you can get the client’s buy-in) – whether it’s eCommerce or lead gen.
Once you have your data you can calculate results with a formula. This is a simple one for calculating the ROI of SEO:
(Gain from Investment – Cost of Investment) / Cost of Investment”
“I think the answer is a subjective one, it depends on the business model & field,” says Kyle Fraser of Kaf. “One business may wish to see more leads come in and another may wish for overall conversions.
In my experience relating to only SEO most people wish to see rank increase expecting sales to increase off the back of that.”
“One of the greatest strengths of SEO is its ability to deliver customers at a fraction of the cost of paid media,” says Jonas Sickler of Terakeet. “In our experience, organic search CAC hovers between 10¢ and 25¢ on the dollar compared to paid.
So, rather than just calculating ROI based on rankings or traffic, look for ways to compare the money going into the cash register to the money coming back out. On that scale, it’s really hard to beat SEO.”
“Set up a report in Google Analytics that shows you how many people landed on a blog and filled out a form in the same session,” says Erin Balsa. “You can go in to see which blogs are driving the most conversions, as well as which types of conversions (e.g., e-book download vs. request demo).
When I measure the ROI of my SEO campaigns at my day job or for my freelance clients, I know which SEO blogs drive the most request demos. And then I calculate their value in terms of revenue based on our average deal size and close rate. It’s simple math.
I also look at the traffic cost. It’s not revenue gained, but it is money we’re saving, and that matters a lot right now.”
“Either by mapping the total CPC value of your target keywords as an indication of traffic value. Or, we also use a more complex method internally where we calculate the total keyword search volume, and make estimations using benchmark click-through rates to calculate traffic projections, and then we use AOV (average order value) and the overall conversion rate to forecast a tangible ROI from an SEO campaign.”
“The best way to calculate the ROI of SEO is to track changes in Click-Through-Rate and Conversion Rate,” says Marissa Ryan of VisualFizz. “Both for your entire website and specifically from organic. It’s important that your goal is to improve relevancy and KPIs from your current traffic and competition level.
If SEO is measured by rankings alone, it is rarely ROI positive in the short term. When SEO is measured by traffic and conversion rate improvements month over month, a much clearer picture of the marketing environment is shown.”
Janice Wald of Mostly Blogging adds, “The best way to calculate the ROI of your SEO work is to use a CTR Calculator. This free, online calculator is enormously helpful. You are able to get a before and after view of your search engine optimization efforts.
For instance, if I calculate my ROI and am disappointed, I can take steps to boost my ROI. For instance, I can fine-tune my post making sure it clearly answers search users’ queries.
Also, I can update the post with fresh information. Next, I could tweak my headline and add the year and unusual characters. Then, I’d use the CTR Calculator again to get an “after” view. By repeating these steps, you boost the CTR of your SEO efforts.”
“At the end of the day, whenever possible you want to be calculating either revenue or pipeline value from organic traffic as justification for your SEO efforts,” says Austin Mullins of Conversion Media. “Everyone understands what this means, and there’s no chance of it being a vanity metric disconnected from what actually drives the business.”
“Calculating ROI of SEO should mirror your primary business objective,” says Kimberly Smith of Clarify Capital. “As a B2B business, our bottom line is to increase sales, which we accomplish by converting qualified leads.
We use Google Analytics to set up ‘goals’, which helps us get a more comprehensive look at ROI. Using goals, we can quantify and track the conversions and sales resulting from different channels.
To measure the value of SEO, we look at the reported conversion rate, goal completion, and value of goal completions (i.e. sales) for organic traffic. Doing so is an easy and accessible way to understand how SEO efforts translate in a tangible way.”
“In my experience, the best metric to show ROI from SEO is the average time on page,” says Ben McLaughlan of Easy Mode Media. “By increasing the average time your audience spends on a page you send important signals to Google that your content is valuable and being shown to the right people. A higher time on page shows that those who land on the page are engaged with what you have to say.
This not only results in higher rankings as you’re providing a better experience but keeping readers on site is important for conversions and creating an authoritative brand name.”
Many marketers spend hours upon hours manually calculating and updating their SEO metrics in spreadsheets. We might be biased, but a better alternative is to build an SEO ROI dashboard.
In fact, here is how Virayo uses Databox to build their SEO reports along with custom metrics to visualize ROI for their clients.
Looking for additional inspiration? Here are four dashboard templates you can use to display the ROI of your SEO campaigns.
If you use SEMRush, Google Analytics, and Google Search Console, you can use this SEO Overview Dashboard to track the overall performance of your SEO efforts.
This Google Search Console Dashboard template allows you to see which pages receive the most impressions and clicks.
If you are using Ahrefs, this Ahrefs Dashboard allows you to track and visualize important search ranking factors like Domain Rating, Backlinks, Referring pages, and more.
If you use SEMRush, this SEMRush Keyword Dashboard allows you to quickly track keyword rankings based on traffic and CTRs.
Calculating the ROI of your SEO strategy is the most important thing you can do. After all, it allows you to show your boss, internal stakeholders, and/or clients how the work you are doing is moving the needle.
However, this doesn’t mean you need to spend hours in Excel hell manually updating spreadsheets, or worse, putting together 20-page SEO reports. A better approach is to use the examples above to come up with one primary metric and a few sub-metrics to show what’s working using a dashboard.
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