February 14, 2024
Assessing a return on investment on your SEO efforts is not always a simple process. In this article, learn the best practices when calculating an SEO ROI.
COO & Co-Founder
One of the most common questions we receive from clients has to do with calculating your ROI on SEO. Assessing a return on investment on your SEO efforts is not always a simple process. In some instances, the data are as clear as measuring revenue in vs expenses out. Other times it's more complex and requires the application of SEO tools like SEMRush or Ahrefs.
We'll use this post to break down the best practices we use with clients and how we help them build an SEO ROI calculator.
The process begins with setting the right goal. Every business's goal is (or at least includes) improved financial performance. But there's not always a direct path from SEO efforts to revenue.
It also depends on what you're hoping to accomplish with improved search engine optimization performance. Are you focused on lead generation, brand awareness, e-commerce conversion, AdSense revenue, or something else?
We also ask clients about the geographic area of focus. A local roofing company in Pennsylvania has little need to rank well in organic search results in Texas. Similarly, a mobile app developer would be limiting their market opportunities if they only focused on local search.
Each of these parameters need to be discussed up front. A one-size-fits-all answer does not exist, but kicking off an SEO investment requires a clear end goal in mind.
For the sake of this article, let's use a real example of a CPG client we helped. They had both a physical location and an online retail operation. We'll refer to them as Smith's Emporium throughout this article.
Smith's SEO performance that once fueled revenue growth had been on a steady path of decline for the last two quarters. They connected with us hoping to restore their local search visibility, improving both online sales and increasing foot traffic. They also had questions about measuring the ROI heading into budgeting season.
Our first step involved ensuring we could track the necessary performance indicators. This involved implementing Google Analytics assessing their SEO baseline metrics, like click through rate, monthly impressions, and top keywords.
We identified the following as primary KPIs (key performance indicators):
We also planned to monitor revenue generated from organic visitors. Revenue was secondary because restoring the monthly organic performance needed to come first. Revenue is also dependent on a number of factors outside our control as SEO specialists, like CRO, shipping rates, competitors' pricing, and others that can affect a purchase decision.
Our approach to Smith's SEO campaign combined on-site optimization strategies with off-site link-building work. Each of these is important, and addressing both positions our clients for the long term. We completed a round of keyword research and began our work.
Our first step involved a thorough audit of Smith's existing on-site content. We identified areas for improvement, including outdated information, suboptimal keyword usage, and underperforming meta tags. Leveraging our expertise in SEO best practices, we optimized each page for relevant keywords, updated meta descriptions, and enhanced internal linking structures.
These optimizations not only boosted the search engine rankings of Client X's content but also improved user experience and engagement.
We also implemented JSON schema markup across their website. This structured data markup provides search engines with additional context about the content, helping them better understand and index the site.
By incorporating JSON schema code for key elements such as product descriptions, reviews, and business information, we ensured that Smith's website stood out in search engine results pages (SERPs) and enjoyed increased visibility among their target audience.
We used ethical methods to get 10+ whitehat backlinks from respected websites in the client's industry every month.
Several months in, the question of how to measure SEO ROI came up. The client was considering how to properly allocate funds across the various marketing activities in which they were engaged. This involved social media, SEO, and PPC.
We found, however, that organic search traffic was driving the most e-commerce revenue, second only to direct traffic. This metric is measured through Google Analytics (GA4) and gives us and the client insight into which of the various digital strategies was helping their business grow the most.
If you have an e-commerce website, this is often the best way to measure your ROI from SEO or any other outbound strategy. As long as Google Analytics is set up properly, this is one of the best ways to understand what's driving the most sustainable revenue results for your business.
In the case of Smith's, we were able to identify their organic traffic's impact on SEO with a simple analysis (i.e. money in vs money out). But what if your sales process begins online but is closed offline?
Tracking ROI on a site whose primary purpose is lead generation can be challenging, but is doable. This, too, starts with proper implementation of Google Analytics. In this case, however, we're tracking the conversion event as a contact form being submitted.
The tool(s) you use to collect leads affects how this is done, but it often involves either setting up a conversion on a "thank you" page after a form is submitted, or by working with a tool like Typeform or Wix whose forms can be integrated directly with Google Analytics.
This setup allows you to identify how many leads are being generated through organic sources. ROI in this instance is measured by analyzing your cost per lead acquisition. We divide the cost of your ongoing SEO effort by the number of new leads to get this metric.
This next section goes one step deeper in the conversion funnel than measuring your CPA (cost per acquisition) and looks at the actual return on your SEO investment. While he section above focuses on the total number of leads, this section discusses how we measure the value of leads generated.
We build on the principles described above when determining where new leads originate from and goes one step deeper by matching a revenue number to each inbound source. It requires that the integration with your CRM captures the attribution source and attaches it to the new lead. By doing this, you'll be able to look at closed-won deals and measure their value against the marketing effort.
Depending on your business and industry, it's important to also check back over time at the total lifetime value of a client. This is especially important when assessing the efficacy of any marketing effort in which you are engaged. A lead generated through SEO that stays a customer for months should be flagged in your end-of-year analysis of which channels generated the most revenue.
A final note that we want to mention is that none of these practices are exclusively used to calculate SEO ROI. While SEO was the focus of this article, we use these same methods to help clients assess ROI from paid advertising, social media marketing, and even offline referrals through QR codes. And that's the point--a good ROI calculator should not exist in a silo or be exclusively used to determine one channel's performance.
Our work with clients on SEO and beyond involves building a system that allows us and the leadership team to reflect on all digital strategies in an "apples-to-apples" comparison. Then we can delineate between the channels that are currently driving the most impactful performances and those that need to be further improved upon.
The intersection of the technical work required to create a calculator and the various digital strategies being measured is exactly where our team sits. If you'd like to work with our team to assess your current online performance, identify potential opportunities, and gain deeper clarity on how your conversion funnel is performing, consider scheduling a free introductory consultation with our team.