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Calculating the SEO Return on Investment

Calculating the SEO Return

Written by Jeremy Earle, JD

January 8, 2022

SEO Agency in Colorado

Google Analytics has a wide range of measures that may be used to measure the performance of SEO (SEO). Traffic, referrals, conversions, and a slew of other data are all easily trackable. However, to get a clear sense of the worth of your initiatives, you need to focus on one metric: ROI (ROI).

SEO’s return on investment may be measured to put its influence into perspective. Demonstrate to executives at your organization the value of SEO by showing them how it has increased traffic, leads, and revenue.

Do you have concerns about calculating SEO’s return on investment?

We’ve helped our customers create more than $2 billion in sales via digital marketing methods like SEO. If you’re an e-commerce or lead-based firm, keep reading to discover how to evaluate SEO’s ROI using Google Analytics! Connect with Rank Fire if you’d want assistance maximizing the return on your SEO investment.

To learn more about our SEO strategies, you can reach out to us through our website or phone at 833-777-RANK.

SEO ROI stands for what?

An SEO ROI calculation estimates the return on investment (ROI) from SEO. Search engine rankings, organic website traffic, and objective completions may be used to determine SEO’s return on investment by utilizing the ROI SEO formula: Return on Investment = Return on Investment / Investment Cost.

SEO’s Return on Investment (ROI)

The three phases of calculating the ROI of SEO may be summarised as follows:

1. SET UP TRACKING OF CONVERSIONS

Setting up Google Analytics conversion monitoring is the first step in establishing your SEO’s return on investment. This enables you to monitor all of the revenue-generating conversions on your website.

Whether or not you want to sell products via your website will impact the configuration you employ.

With e-commerce monitoring, online retailers may extract transaction data and calculate their actual income. As a result, internet tax returns may be confident in their accuracy.

Businesses that rely on leads, such as service providers, may set up objectives like lead form submissions and give financial values to those goals depending on customer information.

Conversion monitoring may be set up on both sorts of companies’ websites in the following ways:

When evaluating SEO’s return on investment, how should one go about setting up conversion tracking?

Google’s guidelines for setting up eCommerce tracking are the best method for monitoring income from an eCommerce shop.

The Ecommerce Overview (Conversions > Ecommerce > Overview) report contains all of the information about your online sales after you begin monitoring e-commerce data on your site.

This report may help you assess the overall success of your website and keep tabs on your progress. This is why we advocate setting up eCommerce monitoring as soon as possible, even if you do not intend to compute your SEO ROI immediately.

To get the most out of Analytics, the sooner you start collecting data, the better.

To track the effectiveness of SEO campaigns, it is necessary to implement conversion tracking.

While it’s easy for those who don’t sell directly on their website to estimate their earnings, it’s more challenging for those who do. To get the most accurate estimate, you should attribute monetary amounts to each of your on-site transactions.

Create objectives for each of your on-site conversions by going to Admin > View > Goals in Analytics. Contact form submissions, free quotation inquiries, and even phone calls may all be used to meet these aims.

Then, in the Goal Details area, add an expected value for each of these conversions.

It’s possible to acquire a fairly good approximation of these numbers provided you have any analytics data available.

  1. Determine how many of the leads become sales. A 25% conversion rate means that out of every 100 lead forms you get each month, 25 of them will turn into paying clients.
  2. Figure out how much each deal is worth on average. Your average value is $200 if each converted lead spends $200.
  3. Calculate the profit potential of each new customer. Divide the total value of conversions by the number of original leads to arrive at the value of each lead. Your initial 100 leads are worth an average of $50 apiece if you divide $5,000 by that number. For example, if you have 25 clients who pay $200, you’ll have $5,000 in your bank account.

Before going on to the next stage, follow this procedure for each of your objectives and input the relevant values.

2. ANALYZE YOUR CONVERSATIONS BASED ON CHANNEL

After a month or two of tracking conversions, you should be able to begin calculating your SEO ROI.

Viewing the Conversions report under Conversions > Multi-Channel Funnels> Assisted Conversions is the quickest method to achieve this.

Choose “Conversions” from the report’s drop-down menu at the top, and you’ll get a list of all of your site’s conversions for the period you choose.

As a consequence of your SEO efforts, the Organic Search channel contains all visitors that came to your site from search engines like Google and Bing.

3. EVALUATE YOUR SEO RESULTS

You may calculate your return on investment (ROI) by comparing the income earned by your SEO strategy over a certain time (usually a month or quarter).

To figure out the return on investment from SEO, most companies use the following formula:

Invested Profit/Invested Loss =

SEO may be compared to other marketing channels using the same methodology if your firm already has a system in place for calculating ROI.

For example, some firms use the net profit from each sale instead of total revenue when calculating the ROI of their campaigns. If you don’t utilize the same metrics for your SEO campaign, your results will be biased in the wrong direction.

A simple Investopedia formula (Gain from Investment–Cost of Investment)/Cost of Investment may be used to calculate your marketing ROI. Afterwards, divide the result by 100 to obtain your ROI in percentage form.

Here is an example of how the SEO ROI formula works in practice:

Gain from Investment: $704,087.50

Cost of Investment: $10,000

(Gain from Investment – Cost of Investment) / Cost of Investment

(704,087.50 – 10,000) / 10,000

60,087.50 / 10,000

6.00875 *100

600.875%

SEO has generated a return on investment for the organization of over 600 per cent.

SEO’s ROI may be measured in two more ways using Google Analytics reports.

Several more Google Analytics statistics may be used to determine the return on investment from SEO, depending on your company and its configuration.

You may get a good notion of the overall success of your ROI approach by combining the information in the following reports with your initial estimate.

1. HELPING WITH THE ANALYSIS OF INTERACTIONS

Most consumers will return to your site numerous times before making a purchase, filling up a lead form, or doing anything else.

For example, a person may find your site in search engine results and spend their initial visit reading your product pages, but they depart without purchasing any. They might come back to your site later by entering your URL into their browser and making a purchase straight from your site.

It’s possible to get an inaccurate picture of how a consumer arrived at your site based on the conversion attribution approach you utilize.

Only looking at the most recent interactions can make you believe that it was a direct traffic sale. However, this approach ignores the fact that the customer came to your site through organic search, which means the transaction would not have occurred had it not been for SEO.

Using Organic Search helped lead to the conversion in this case. For example, occurrences like these may be found in a report titled “Assisting Interaction Analysis,” which highlights the value and importance of channels that don’t immediately lead to conversions but play an important part in the early phases of the process.

Because they aren’t the ultimate touchpoint, this helps you understand the true worth of each of your marketing channels.

2. Top Conversion Paths

Conversion Paths (Conversions > Multi-Channel Funnels > Top Conversion Paths) is a similar report to Assisting Interactions Analysis (Conversion > Multi-Channel Funnels).

Rather than displaying the individual contributions of every channel, this graph displays the most frequent conversion pathways used by your visitors.

Users are more likely to come to our site through Organic Search, in this case, before returning to complete the conversion process.

Your clients connect with your site and other channels before purchasing or becoming a lead, and this report helps you better understand how they do so. And the more you learn about your clients, the better equipped you will be to plan future marketing activities.

SEO RETURN ON INVESTMENT (ROI) QUESTIONS AND ANSWERS

Do you still have questions regarding calculating SEO’s return on investment? Check out our FAQs!

When should I start tracking the return on my SEO investment?

There are several ways to assess SEO’s return on investment (ROI). There won’t be a noticeable return on your SEO investment in the first three to six months since it takes time to get benefits from SEO. It is only after this first time that SEO may begin to provide a return – and continue to provide one.

I WANT TO KNOW SEO’S RETAIL VALUE.

The method for calculating SEO’s return on investment is:

(Gain from Investment – Cost of Investment) / Cost of Investment

Calculate your “Cost of Investment,” then reference your Google Analytics data to determine your “Gain from Investment.” SEO ROI may be calculated by substituting your numbers into the algorithm.

WHERE CAN I FIND OUT IF MY SEO PLAN IS WORKING

The success of your SEO campaign is directly correlated to the profitability of your company.

SEO ROI may be tough to estimate since each firm is unique, making it impossible to give an average or excellent ROI. In addition, the value of a lead varies from one firm to the next. One company pays $1500 a month on SEO, while another spends $3000 a month.

Before you begin SEO site optimization, sit down and develop a rough ROI estimate for your company. This figure may be used as a yardstick by which your company or agency can evaluate its performance. Make a modest start and gradually increase the proportion as you acquire data.

With RANK FIRE, you’ll get a better return on your SEO investment.

SEO is a powerful tool for organizations of all sizes, and Rank Fire can assist if yours isn’t doing as well as you’d want it to.

Every strategy we devise is tailored to meet the specific needs of each of our customers to maximize their return on investment.

Contact us now for a free estimate on our organic SEO services!

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