As a marketer, you know the potential business value of SEO. You know that it’s one of the best ways to attract and educate your ideal audience, send qualified leads to your sales team, and build lasting brand loyalty.
But you also know that at first glance, SEO can be intimidatingly complex. A lot of planning and resources go into the initial groundwork, and it takes months for results to translate into revenue. Because of this, a lot of marketers find it difficult to justify investing in SEO to senior management.
Another problem marketing teams run into is knowing how much to invest in SEO. You want to achieve a good balance because if you’d don’t, you can either spend too much and get minimal results or limit your growth by spending too little.
You need a metric that helps your company’s senior management understand SEO’s business value and your marketing team to know exactly how much to put into it. That metric is SEO ROI.
What is SEO ROI?
SEO ROI measures the return on investment of your SEO strategy. To do this, we need two numbers: the gain of investment and the cost of investment.
SEO gain is determined by tracking important key performance indicators (KPIs), selecting those that reflect your company’s business goals, and coordinating with the sales team to determine the revenue your SEO campaigns generated.
SEO cost is determined by adding all costs related to running your SEO campaigns.
These two numbers then give you your SEO ROI, which you track monthly and use to make data-driven business and marketing decisions.
Why does calculating SEO value matter?
Calculating SEO ROI helps you demonstrate SEO’s value to your company’s decision-makers. Since SEO takes time to produce revenue-generating results, calculating and presenting SEO ROI to your senior executives allows them to make data-supported business decisions. Without seeing a positive SEO ROI, a CEO may decide to go for a marketing strategy that may give quick initial results but diminished returns in the long run.
SEO ROI also helps you track how your strategy holds up over time. It enables you to determine if your SEO strategy is fulfilling your company’s business goals or if you need to clarify your SEO process by hiring a search marketing expert. Knowing the effectiveness of your marketing strategy helps you supercharge your growth or turn things around when necessary.
How do you calculate SEO value?
Here’s how to calculate SEO ROI in three steps.
#1 Set up initial KPI benchmarks for SEO
The first thing you need to set up is a system for gathering data. Tracking these KPIs gives you the basis for assessing your SEO strategy’s business value. To calculate SEO ROI, you need to pay attention to 3 main KPIs:
- organic traffic
- keyword rankings
- domain authority score
Marketers who don’t know much about SEO measure only organic traffic, but that alone doesn’t tell you much. You want to get a picture of your targeted traffic – traffic that accomplishes your website’s goals. For that, you need to see your keyword rankings and domain authority score.
The domain authority score reflects your website’s relevance and trustworthiness – do the people who land on your website find your content useful? You want this to improve over time. If it doesn’t, you know that you need to revise your SEO strategy to be more relevant to your target audience.
On the other hand, your keyword rankings show you the direction you need to bring your SEO strategy as you progress. If your SEO goal is to attract qualified leads, ranking only for keywords with no purchase intent tells you that your SEO ROI would probably be negative despite high organic traffic. Why? Because even though your website is getting a lot of traffic, these people are not interested in your services at all.
If this is the case, your next step is to use the keyword rankings you do rank for as a starting point to ranking for long-tail keywords with the purchase intent necessary to bring qualified leads to your website.
Now we know the value of these KPIs, here’s how to monitor them.
Organic traffic
Google Analytics helps you track your site’s organic traffic over time. You can also track the traffic to specific pages from organic search. Because we’re measuring SEO ROI, pages that drive qualified leads to your sales team are particularly useful to track.
Step 1: On your Google Analytics dashboard’s left panel, click on Acquisition > All Traffic > Channels. The main panel then shows traffic from all sources. Scroll down until you see the breakdown of traffic channels and click on “Organic Search”.
Step 2: When you click on “Organic Search”, your graph now shows your organic traffic.
Domain authority score
To check the domain authority score, use an SEO tool like SEMrush.
Step 1: On your SEMrush dashboard’s left panel, click on SEO > Domain Overview. Enter your domain and then click search.
Step 2: You now see your current domain authority score.
The domain authority score ranges from 0 to 100 and reflects your website’s authority and trustworthiness. The higher your score, the better your website’s overall quality and SEO performance.
Keyword rankings
To check your keyword rankings, you can also use SEMrush (SEO > Position Tracking > select your project/website > Overview > Rankings Overview). But to show you how it works using a different SEO tool, let’s use Ahrefs.
Step 1: Plug in your website URL into Ahrefs site explorer.
Step 2: On the left panel, click on Organic search > Top pages. This shows you the top keywords you are ranking for.
Monitor the changes in rankings for your top keywords at least once every two weeks.
#2 Align SEO KPIs with business & marketing goals
Once you have a system of tracking the KPIs needed for measuring SEO ROI, the next step is to align them with your business and marketing goals. These goals include conversions, lead generation, brand awareness, or any other valuable action that drives your company’s growth.
Determine how SEO helps you achieve each of these business goals. For example, how does SEO help you increase conversions? Look at the keywords you rank for. Are these keywords your target audience uses when they are searching for a solution your company provides?
Analyze the user’s search intent behind the keywords your website is ranking for. If one of your business goals is to increase the number of qualified leads that your sales team then converts, you should aim to rank for keywords with purchase intent.
When preparing your SEO ROI report, organize your data to show the following metrics:
- Number of unique users and traffic over time
- Number of organic search engine traffic over time
- Number of conversions related to specific campaigns over time (example: purchases, inquiries, newsletter signup)
- Number of organic search engine traffic to pages that signal lead generation over time (example: success pages of the contact form and the newsletter signup form)
- Increase in the ranking of keywords that signal intent to accomplish conversions over time
These metrics give a snapshot of the direction your SEO strategy is going – is it going up, down, or plateauing?
Calculate your SEO gain from investment over a specific period using the number and value of conversions (get this data from the sales team) and the number of leads your search engine traffic gathered.
For example: if your search engine traffic brought 100 leads to the sales team over one month (measured as the number of visits to the contact form success page), the sales team closed 10 of them, and each paid $3000 for your product, then your gain of investment for this specific campaign is $30000 for that month.
#3 Consider your time for content strategy, creation, and applicable sales cycles
Now that we know how to compute for our SEO gain, let’s look at the other side of the equation: the cost of SEO.
Add up your company’s costs associated with your SEO strategy. If you have in-house SEO specialists, add their monthly fee. If other members of your marketing team (like developers and copywriters) work on various projects, have them track the time they spend on SEO-related tasks and compute their monthly SEO-related rates.
If you work with an SEO freelance consultant or agency, their retainer fees go into your SEO costs. Also add the monthly expenses of SEO tools like SEMrush into your calculation.
Once you have your SEO of investment, compute for your SEO ROI:
(Gain from investment – Cost of investment) / Cost of investment
Let’s look at some specific examples to give you a clearer picture.
An example of SEO ROI stat where SEO generates B2B SaaS leads to send to the sales team
To calculate the SEO ROI of B2B lead-based businesses, you first need to track organic search engine traffic to a page that signals lead-generation, such as your contact or inquiry form’s success page.
Then, ask the sales team for the revenue generated from organic leads. If you sent them 100 leads and they closed 10 generating $30000 in revenue, $30000 is the gain of investment for that period.
Now let’s look at the cost of investment. If you outsource your SEO to an agency and pay them $6000 per month, that is the cost of investment.
SEO ROI = (Gain from investment – Cost of investment) / Cost of investment
= (30000 – 6000) / 6000
= 4
4 x 100 = 400%
The SEO ROI for that specific month is 400%.
An example of SEO ROI where SEO drives B2C e-commerce conversions
Track the SEO ROI of your B2C e-commerce sites using data from online transactions. Set up e-commerce tracking on Google Analytics, and then on the e-commerce tracking page, look for the number of sales you made within a specific month.
This amount corresponds to the total number of conversions you made in that specific month. For example, if 200 conversions resulted in $400000 worth of sales, then the value of one conversion is given by:
Total number of sales / total number of conversions
= 400000 / 200
= $2000
One conversion has a value of $2000.
If you paid an SEO company $20000 for keyword research and content creation during that month, that’s the cost of investment.
SEO ROI = { (Gain From Investment – Cost of investment) / Cost of investment } x 100
= (400000 – 20000) / 20000
= 1900%
The SEO ROI for your e-commerce business is 1900%.
