Want to know if your SEO is making you money?
If you own a business, you know that everyone is obsessed with Google rankings. Everyone wants to see their company on the first page.
But here’s the problem:
People don’t really know if their SEO investments are profitable or not. They throw money at SEO projects without understanding the true returns. And that’s a huge mistake because unless you are actually measuring your SEO ROI…
You have no idea if you’re wasting your money
Understanding your SEO ROI calculator metrics is the difference between throwing money away and having a repeatable profit machine. The research says that SEO can bring in huge ROIs — fact: SEO earns an average ROI of 748% over three years.
That’s right. 748%. In this guide, you’ll learn exactly how to measure, track, and improve your SEO ROI so you can actually prove your organic efforts are worth the investment.
Without further ado… Let’s Dive In:
- What Does SEO ROI Mean?
- Key Metrics You Need to Track
- Calculate Your Actual Returns
- Why Most SEO ROI Strategies Fail
What Does SEO ROI Mean?
SEO ROI is the amount of profit you make compared to how much you invested in the SEO process. Simple as that, right?
Well, no, not quite.
The big mistake that most businesses make is they look at rankings and traffic but traffic doesn’t equal sales. In other words, if you start to focus only on ROAS, you’re missing half of the picture.
True SEO ROI is calculated on the revenue that you are actually earning from your organic efforts. So if you invest $5,000 a month into SEO, but it’s bringing in $40,000 a month on organic traffic, your ROI there is 700%.
Boom. Now you’re talking real money, not just nice-sounding metrics.
But it’s important to understand that the biggest difference between SEO and other marketing channels is the longer-term value. SEO has a longer sales cycle, which is also why it’s essential to understand what your true lifetime value of an organic customer is.
One important thing to note here: According to some stats out there, 70% of marketers think that SEO does way better than PPC in the long-term.
Key Metrics You Need to Track
Okay, great. Now that you know why it is important to track SEO ROI — time to dig in and see what exactly you need to look at.
The big problem: You need to track the right metrics and ignore the vanity metrics that everyone else talks about but mean zero dollars and cents.
Here are the important metrics that you need to focus on:
Organic Traffic Value
The estimated worth of your organic traffic based on your PPC (pay per click) spend. Here is the example:
If you are ranking for keywords that cost $10 to bid on in the AdWords platform and you have 1,000 clicks per month on your site. That means your organic traffic value is $10,000 per month.
Conversion Rate From Organic Search
Traffic is great, but what good is it if it’s not converting? Measure the percentage of people coming to your site from organic search that are taking a specific action on your website.
This can be making a purchase, filling out a contact form, or signing up for a newsletter. This metric tells you whether you are attracting qualified traffic.
Revenue Per Organic Session
This metric measures how much revenue you are getting from your organic traffic. To calculate this, divide the total revenue from organic sessions by the total number of organic sessions. The formula looks like this:
Revenue Per Organic Session = Revenue from Organic Sessions / Number of Organic Sessions
Customer Acquisition Cost
Customer acquisition cost (CAC) is how much it costs you to get a new customer. SEO has a much lower CAC than paid channels because it is an ongoing channel and much more self-sustaining.
For example, if you spend $10,000 on SEO in a year and acquire 100 customers from those efforts. That’s a $100 CAC.
Time To Positive ROI
ROI is never instant, in fact, most SEO campaigns take a year to start generating positive ROI. The highest SEO ROI return comes from Real Estate companies at 1,389%, followed by B2B SaaS companies at 702%.
How to Calculate Your Actual Returns
The best part is that measuring your SEO ROI is not as difficult as some people make it out to be. In fact, it’s fairly straightforward when you know what numbers to use.
The basic formula for SEO ROI is:
SEO ROI = (Revenue from Organic Search – SEO Costs) / SEO Costs x 100
Easy, right? Let’s take a look at each of the components…
Calculate Your SEO Costs
The first thing you need to do is add up all of your SEO costs. This includes:
- Agency or consultant fees
- Staff costs (either the portion of their time spent on SEO or the salary of the team)
- SEO tools and subscriptions
- Content production
- Development work
If your marketing manager is spending 5 hours on SEO per week, they’re not spending that time doing something else. You need to include all that time spent into your final SEO calculation.
Calculate Revenue from Organic Search
The next step is to track how much revenue you are getting from organic search. The easiest way to do this is to use Google Analytics and set up goal tracking and ecommerce tracking.
Plug The Numbers In
So now you have both numbers, you need to put them in the right place.
For example: If you spent $60,000 on SEO last year and had revenue from organic search of $500,000, here’s the calculation:
SEO ROI = ($500,000 – $60,000) / $60,000 x 100 = 733%
BOOM! We have a very positive return on our SEO investment there.
Why Most SEO ROI Efforts Fail
Here are some of the mistakes that businesses do when it comes to tracking and measuring SEO ROI…
The number one way people screw up their SEO ROI calculations is that they’re looking at the wrong numbers. Rankings and traffic feel good and look good, but they mean nothing.
Imagine having the number one spot for a keyword but if there’s no intent to buy on that keyword. In other words, what if you are on the first page of Google for the keyword. Perfect, right?
But unless that keyword is in the target market and it is ready to convert, it’s pretty useless.
Another big mistake? Not tracking their costs correctly.
We all know that this includes the agency fees, staff hours, and tools. But most people don’t take into account all those hidden costs.
The third and major mistake that is made here:
Giving Up Too Early.
SEO takes time. Period.
Most people don’t expect SEO to deliver returns in less than a year and they give up way too early before it starts to work.
A solution to that would be to set your expectations in time for ROI based on your industry vertical. You have to learn to track those leading indicators, ranking-wise, and have a dedicated channel (SEO) on your dashboard.
So next time when one of your execs or stakeholders ask you about the SEO ROI. You can show them how many keywords you moved into top 10 last month (50), for example.
Final Thoughts on Measuring Success
Measuring your SEO ROI is not just about showing your work to stakeholders. It is more about making the right decisions with your marketing budget.
Once you can look at which parts of the SEO funnel is giving you the most returns. You can do one of two things.
- Increase your efforts in that area or;
- Cut your losses in the areas which you know aren’t going to work for you.
That’s the only way to turn your SEO into a money-making machine.
Track the right metrics. Calculate your costs as best as you can. And be patient with your campaigns.