SEO return on investment (ROI) is an estimation of how much you spend on your SEO activities. SEO consultants and managers must calculate it so they know how to allocate their marketing budget.
With the help of our experts, we’ll go over what SEO ROI is, how to calculate it, and why you should track it. You’ll also learn a few ways to improve your ROI.
Key Takeaways
- SEO ROI equals the difference between SEO revenue and costs divided by the SEO costs.
- Defining your business goals is the starting point for improving your SEO ROI.
- Tracking ROI from SEO can show which marketing tactics work and whether your business performs well on the market.
Table of Contents
What Is SEO ROI?
SEO ROI measures how much you spend on an SEO business strategy and what you get in return in terms of raising brand awareness, growth, and conversion rate. It is typically calculated by analyzing your website’s search engine rankings, organic traffic driven to your page, and target completions.
The ideal scenario of a successful SEO ROI is boosting organic traffic, ranking more web content high on search engine results pages (SERPs), improving consumer engagement, and increasing the session length of users.
How To Calculate ROI of SEO Campaigns
To calculate your company’s ROI of SEO, there’s one simple formula that will net the ROI percentage:
SEO ROI = (SEO Revenue – SEO Costs) / SEO Costs x 100
To use this formula, you first need to determine the cost of your SEO efforts and how much you’re making off them. Here are some of the key metrics you need to calculate the SEO costs:
- Total production costs: This metric refers to the budget for content creation and link-building production.
- Total cost of using tools: Gather the costs you have for using every tool connected to SEO. You can set the metric on either monthly or yearly costs, depending on your chosen plan.
- Content promotion costs: Calculate how much you’ve spent on spreading your content. This should include social media posts, PPC, influencer marketing, etc.
Since you also need to have the revenue numbers, here are some metrics where SEO is included and can help you calculate them:
- Sales close rate: This is the percentage of closed deals to sales opportunities. Simply put, it will give you an estimate of how many people have bought your offered products or services.
- Organic website traffic: You should also calculate how much you’ve earned from organic search. To do that, set up Google Analytics or a similar tool and track and analyze its metrics.
- Lead conversion rate: This is the conversion rate from organic website traffic into leads. It helps you estimate how many leads have converted into paying customers so you can then calculate the revenue.
- Average customer lifetime value (CLV): This measures the average revenue a customer expectedly generates for your business in the whole course of their relationship with your brand. This involves brand loyalty and successful retention that can potentially assist your company’s long-term growth.
Once you’ve gathered and calculated your SEO revenues and costs, you can use the given formula above. To illustrate it better, here’s a simple example.
Let’s say that you’ve spent $1,000 in a month on your SEO efforts. The resulting revenue is $5,000. Applying the formula would give you:
SEO ROI = ($5,000 - $1,000) / $1,000
The result is $4. Basically, for every $1 you’ve spent on SEO, you got $4 in return. To get the ROI in percentage points, multiply this result by 100, which would result in 400% in our example.
Ways To Improve SEO Return on Investment
Setting up an exceptional search engine optimization campaign can be challenging. You have the option to build your in-house SEO team of specialists or hire the services of an SEO agency from which you can solicit SEO RFPs to make your selection process more accessible and more seamless.
Whichever route you take to make a breakthrough in SEO, you can refer to these reliable ways to maximize your SEO ROI and turn your business into an industry leader:
- Set definitive objectives and goals
- Identify and know your customers (KYC)
- Perform thorough targeted keyword research
- Create informative and credible optimized content
- Build and nurture your connections and business relations
- Launch a responsive company website
1. Set Definitive Objectives and Goals
The best way to improve ROI on SEO is to set clear goals. These objectives can vary depending on the nature of your enterprise and your industry. It can be anything from making your website the central platform for selling products to gaining more paid subscriptions if you offer a tool or software.
No matter what you want to achieve with your SEO efforts, these goals serve as a handy, dependable benchmark. You can key them into your analytics platform when it is time to calculate your return on investment based on these objectives.
2. Identify and Know Your Customers (KYC)
Another valuable way to improve your SEO ROI is to enhance your KYC procedures. Start by creating ideal buyer personas based on research about your prospective client base. Then, craft content and formulate your brand message to cater to what your customers want to see, read, and hear.
Identify the pain points your products or services can address and solve. You can gather this information through interviews, surveys, or polls as part of your consumer research.
3. Perform Thorough Targeted Keyword Research
You can improve your SEO return on investment by conducting thorough keyword research and finding valuable and relevant keywords to optimize your website. Look for long-tail keywords you can include in your articles or derive shorter variations to implement in your metadata.
You can do this by first getting a clear idea of who your target audience is, what they are looking for, and why. After that, use tools like Ahrefs and find the most beneficial keywords, phrases, and terms they will most likely use when searching for services or products.
4. Create Informative and Credible Optimized Content
Once you’ve identified your keywords, a good way to improve your SEO ROI is to incorporate them into your content. Basically, you need to build high-quality content centered around these keywords.
Content is integral in positioning your brand as a leader in your industry. Ensure the content you put out is interesting, worthwhile, beneficial, helpful, trustworthy, and ideally shareable. Besides promotion and getting people to purchase from you, your content should also be able to answer common customer queries.
5. Build and Nurture Your Connections and Business Relations
Never forget that improving your SEO ROI also means building and keeping all connections. These are what bring you interlinking opportunities and build your SEO foundations.
If you don’t already have connections, start by offering your products or services via guest posting high-quality content. Reach out and pitch articles to other professional and credible websites. Audiences will see your content as a value-adding resource when you get it featured on legitimate sites outside your own.
6. Launch a Responsive Company Website
A foolproof way to improve your SEO ROI is to create a good website. Navigating through a slow and cluttered business website peppered with ads and pop-ups can annoy online users, improving your bounce rate and hurting your ROI.
Ensure you give your audiences and prospective clients an intuitive UX when browsing your website. Be clear with your goals for each section and subsection. Check for broken links and if links conveniently open another tab for effortless browsing.
How Your SEO Initiatives Impact Your ROI
Here’s how revenue-generating SEO improvements and campaigns can contribute to your ROI:
- Increase website traffic
- Enhance user experience
- Gain more client touchpoints
- Improve paid ads performance
1. Increase Website Traffic
SEO ensures your site’s visibility on SERPs. Ranking on top of the first page of search engines and remaining visible directly takes part in driving more traffic. This can help improve your click-through rate (CTR). It also opens greater possibilities for you to make more conversions and with that, more revenue.
When done right, SEO focuses on targets and redirects more qualified traffic. More than optimizing for search, you should aim to optimize for traffic that leads to a purchase. This involves shaping your website content and design to attract, engage, and retain audiences. It also means that you should modify your website user interface (UI) to adapt to the changing consumer demands.
2. Enhance User Experience
Top IT services companies emphasize the importance of SEO in creating an enhanced user experience. It goes beyond visibility on SERPs and a CTR boost. It stretches to the overall online customer experience of your existing and potential buyers. The better their user experience (UX), the more positively you influence their purchase decisions and encourage a higher conversion rate.
3. Gain More Client Touchpoints
The best SEO techniques and practices are valuable for omnichannel marketing that helps expand consumer touchpoint options. Take advantage of these multiple touchpoints to foster brand recognition, grow your online audiences, and build better-quality interactions with them.
4. Improve Paid Ads Performance
SEO can be a driving force that strengthens your pay-per-click (PPC) advertisements. PPC advertising is generally a cost-efficient form of promotion online since you’re only charged for actual clicks on your paid ads. When a paid ad is clicked, regardless of whether an online user stays on your website, places an order, or leaves, you must pay the fees.
Ultimately, it will boil down to the execution of your SEO strategies over different SEO principles. Your design, calls-to-action (CTAs), and convenient UI can keep audiences on-site and potentially encourage them to convert.
The Significance of Tracking ROI in SEO
Here are the reasons why measuring your SEO return on investment is essential:
- ROI is the ultimate measure of success
- ROI reveals which marketing channels and tactics are performing well
- Determining SEO ROI enables future marketing plan expansion
- SEO return on investment showcases your business progression
1. ROI Is the Ultimate Measure of Success
Any business owner, brand marketer, or strategist must have an in-depth understanding of how to utilize online channels and leverage SEO for promotion to add value to the business.
You can measure standard SEO performance indicators through conversions and sales. However, demonstrating a solid ROI in SEO is still your most decisive success factor.
2. ROI Reveals Which Marketing Channels and Tactics Are Performing Well
Knowing your SEO ROI allows you to make sounder, more informed decisions about where you invest your marketing and promotion funds. With the ROI of SEO as a critical metric for the success and sales generation of a promotional campaign, you can determine the proper digital revenue-driving channels to put in more time, effort, and funds.
3. Determining SEO ROI Enables Future Marketing Plan Expansion
By acknowledging the vital role SEO plays in your company’s growth, scaling, and expansion, you lay the groundwork for more expensive projects you may have in the pipeline moving forward. This sets the tone and creates the right circumstances around which you can build larger-scale marketing programs.
4. SEO Return on Investment Showcases Your Business Progression
When you know the ROI of SEO marketing efforts and identify the campaigns that work most efficiently, you can conveniently track and replicate your advertising successes. Also, you can more precisely associate a financial value to every revenue driver behind your brand, i.e., the SEO techniques that add to your earnings.
Increasing SEO ROI Takeaways
SEO ROI exhibits the effectiveness of your marketing strategies, the promotional projects that require fine-tuning, and the lead and sales conversion rates. Make sure you use the best optimization strategies or SEO consultants to go with your type of business and brand voice.
This will guarantee you the highest possible SEO return on investment from a given SEO marketing program. Alternatively, hire top enterprise SEO companies to get the job done for you.
SEO ROI FAQs
1. Does SEO have a high ROI?
SEO can have a high ROI over time. It helps increase organic traffic and improve online visibility, leading to potential long-term gains for businesses.
2. How to increase ROI in SEO?
To increase ROI in SEO, focus on keyword optimization, quality content creation, backlink building, technical site improvements, and monitoring analytics. Regularly assess and refine your SEO strategy to maximize results.
3. When should I measure SEO’s ROI?
You should measure SEO's ROI regularly, ideally on an ongoing basis. Track metrics like organic traffic, conversions, and revenue to assess the effectiveness of your SEO efforts.
