Calculating ROI for SEO efforts can seem like a difficult task. Other marketing channels tend to be more straightforward, making these channels a more popular choice for businesses than SEO. This is often due to the misunderstanding or miscommunication of value that SEO brings the business. However, both the service provider and business owner will often be surprised about the positive impact SEO yields if they communicate together on goals, KPIs, and overall objectives for the campaign.
Can SEO Impact ROI?
Proper execution of a well thought out SEO strategy can have a tremendously positive impact on ROI. SEO has a direct effect on the quality and quantity of traffic to your website. Achieving high rankings for relevant keywords and presenting quality content for users is the core goal for any successful SEO campaign.
However, SEO can positively impact other marketing endeavours including:. Brand authority and credibility, ad performance efficiency, customer care, and more. Overall brand perception is heavily influenced by online visibility today. A large part of online visibility is how your company appears in Organic Search. Therefore, how you appear in Search Engine Results Pages (SERPs) can have a huge impact on your bottom line.
What is the ROI of SEO?
Calculating the value of SEO begins with determining the return on investment (ROI). The “investment” should be simple to identify, while the “return” will vary depending on what goals and objectives carry value. Most commonly, it will be the value of products sold or leads generated. Let’s say that Jim’s Kitchen Remodelers can determine that each lead that comes through their website is worth about $2,000. Bob’s SEO Company then takes their monthly Organic Search lead total from 10 to 25 or $20,000 to $50,000 in generated lead value. The cost of Bob’s services is $4,000.
ROI = Net Profit / Total Investment * 100
ROI = 50,000-2,000 / 4,000 * 100
ROI = 30,000 / 4,000 * 100
ROI = 7.5 * 100
ROI = 750%
There are other ways to measure SEO performance that are more granular. Specific keywords and their variations are often targeted in SEO campaigns. For example, using some keyword research tools we can determine that the keyword “kitchen remodelers philadelphia” has an annual search volume of 1,800 (150 per month).
According to Google Search Console, our current average ranking is 6.5 with a CTR of 3%, giving us an estimated 54 visits per year. The current overall average CTR for #1 position for non-branded keywords is about 30%, giving us a projected 540 annual visits for holding #1.
If our site’s Conversation Rate is 5%, then we estimate a 10x increase in conversions from 2.7 to 27 per year. Using our same $2,000 average lead value, we can calculate an increased value of 54,000 – 5,400 = $48,600 for the year for just one keyword.
Holding the 1.0 position for a competitive non-branded keyword consistently throughout one full calendar year is almost impossible. However, holding many in the top 3 range while generating thousands of dollars in positive ROI is achievable. At Digital Philly, we know because we’ve done exactly that for many clients over the years. Contact us today to schedule a free, no commitment consultation.