Return On Investment (ROI) measures the revenue generated from a particular venture. This metric helps businesses and brands to determine the output generated vs. input invested.
In the SEO world, ROI describes the revenue generated from any SEO activity. The web20 reviews show that many clients have generated good ROIs from purchasing SEO packages. But how do you calculate your SEO ROI? Find out below.
How to Measure the ROI of SEO
The return on investment generated from SEO activities and packages relies on two important factors; your costs and returns. These factors will help you make the right decision on whether you’re profitable or not.
Cost Factor
The cost factor in calculating your SEO ROI deals with all the important costs you made during the SEO process. This cost can include the cost of purchasing SEO tools like Atarget=”_blank” hrefs, SEMRush, Ubersuggest, and others. It could also include the cost incurred on staff and freelancers.
Calculating the cost incurred on staff can be tricky, especially if they were working on multiple projects simultaneously. You can get an average value by calculating how long it’d have taken your SEO team to work on that project or campaign. You can then multiply the hours by the hourly rates of each employee.
Additional costs to include are link-building costs if you’ve set up a link-building campaign, website maintenance costs, content distribution costs, etc.
Combining these costs gives you an accurate or near-accurate estimation of how much you have spent on specific SEO tasks.
Revenue Factor
Calculating your revenue can be simple if you only have one revenue source; SEO. However, if there are multiple campaigns you’re working on, there’s a need to streamline revenue to each campaign to measure individual success.
Individual success can be measured by conversion tracking in Google Analytics or alternative analytics tools. You can segment the traffic to specific sources, in this case, “organic traffic” sources, and check the value of the conversions.
It is important to note that conversion rates are important to calculating your ROI, so you want to be sure that you’ve set up your analytics data collection correctly.
The important metrics for calculating your revenue are;
Estimated Monthly Value: this is how much you’ve generated in a month for a given keyword
Total Monthly Searches: this is the total search volume you’ve accrued based on a specific keyword or group of targeted keywords
Position (CTR): this is the estimated click-through-rate for the keyword or keyword group
Value Per Visit: this is how much each visitor generates from clicking on your website.
Below is a simple formula for the total revenue calculation;
Estimated monthly value = Total Monthly Searches * CTR * Value Per Visit
Calculate SEO ROI
With the cost and revenue factors calculated, you can proceed with the SEO ROI calculation using the formula below;
SEO ROI = ((Revenue factor – Cost factor) / Cost factor) * 100
How Long Does It Take to See ROI From SEO?
Businesses and clients want to see as much progress as possible within the shortest possible time. They’d mostly ask for a timeline within which they could start seeing results in the form of a positive ROI. The truth is, SEO is like raising a pet or planting crops. One doesn’t just get a fruiting crop within a day or an adult pet within a week.
SEO strategies can take some time to reach maturity and deliver expected results. While it can take some time, changes should be noticeable within the first 6 to 10 months of SEO strategies. In fact, it is expected that clients should begin to break even within 8 to 10 months of implementing new and results-driven SEO strategies.
To ensure the best outcomes, here are a few things to pay attention to at the start of your journey;
- Optimize images to reduce file size and improve page loading speed.
- Include alt texts in images for improved visibility
- Fix broken links and incorporate redirects
- Implement a solid internal linking plan to relevant content
- Delete spammy backlinks
- Diversify content by adding interactive questionnaires, videos, customer reviews, and other basic informational content.
Challenges of Calculating SEO ROI
While calculating SEO ROI is great for businesses, there are a few drawbacks that can push clients to focus on the negatives rather than the positives. These drawbacks include;
- SEO impact can take some time before visibility and results
- SEO forecasting can be difficult, especially with algorithmic changes and changing SEO landscape
- SEO costs may vary from month to month, causing irregularity in costs tracking
- Conflict between branded and non-branded traffic can impact SEO ROI calculations
As a business or brand, calculating your SEO ROI gives you a detailed understanding of where you are and how to improve your results. It also helps you to determine strategy changes and when they’re needed.
