Return On Investment (ROI) In SEO
How And Why to Calculate The Return on investment (ROI) in SEO
Investing in the growth of the business is a challenging task. All the business owners nowadays know that investing in digital marketing campaigns or SEO campaigns is the only way to make your brand popular and increase profit levels.
In a world where digitalization has reached its peak and you seem to have a plethora of options for online marketing, you have to be very cautious about implementing the right strategies that can maximize ROI.
Return on investment (ROI) in SEO is an estimate of the total investment in all the SEO activities of your company in contrast to the cost. It is the most common topic that SEO consultants and managers have to address when it comes to the allocation of marketing resources and budget.
Although the calculation of ROI can be a straightforward job, you need to know about many caveats that can deeply influence the measurement and interpretation of ROI.
How to measure the SEO ROI?
If you take a glance at the formula of the SEO ROI, you will find it very simple.
SEO ROI= (Value of organic conversions – Cost of SEO investments)/ cost of SEO investments.
Precisely, you have to divide the SEO profit by the costs related to SEO.
Now it’s time to expand the variables of the formula for Return on investment (ROI) in SEO to understand how the changes can affect the numbers.
Calculation of SEO investments
Organic search is often similar to the “free traffic” channel. But that will be a devaluation of the huge amount that you invest for the purpose. And these will not be associated with SEO costs only.
There are four categories of SEO investments.
- In-house employees
The dedicated SEO consultants and the content creators are not the only in-house staff related to SEO. You also have to pay the designers and developer resources.
- SEO agencies and freelancers
When you hire SEO agencies or freelancers, they will be the ones to measure the Return on investment (ROI) in SEO.
- SEO tools
You have to count in all the subscriptions related to the SEO tools apart from including the cost of the tools that the broader marketing department will deal with.
- Link building and content distribution
Publishing content is not the end of SEO. Rather, it starts a new chapter of SEO. You have to include the costs of content promotion and also the cost of buying links as a part of link-building strategies. Although the top SEOs may want you against buying the links, the facts can be different at times.
Now the summation of these costs over a certain period will be the investment gain which you have to calculate the Return on investment (ROI) in SEOover the same time frame.
Calculate the value of organic traffic conversion
Several tools will help o track the conversion
rates. Once you segment the traffic to “organic”, you can get the value of the conversions. This will reflect in the calculations for Return on investment (ROI) in SEO.
- The nature of conversions and how you will assign the value of the conversions will depend on the nature of the business.
- Any ecommerce business will have a simple calculation method. They will send the value of any sales conversion to GA.
- But the calculation will be complex for lead generation businesses. For such companies, it is better to assign dollar values to the new marketing leads or sales-qualified leads.
Thus, the calculation will include a lot of factors.
Value of assisted conversions
Each stage of the marketing funnel has something to contribute to the Return on investment (ROI) in SEO. When a player scores a goal, the contribution is both of the player and the defense goalkeeper who could have stopped the goal.
The same applies to the SEO campaign conversions too. While you are investing in the SEO campaign, there can be something lacking in the contending companies that will boost your lead generation and conversion.
So, it is always feasible to monitor the entire conversion process of the leads. It will help to calculate the cost inputs in different points and aspects.
Overcoming the challenges
Calculation of the Return on investment (ROI) in SEO can get very challenging when you have got certain situations.
- Marketing attribution is one of the most common topics that can provoke different discussions. While some say that these are not worth the resources, some believe that proper attribution can make bring about significant improvement in business growth.
But if you don’t have a very high rate of conversion every month, it is not right to invest no matter what attribution model you are using.
- When a customer browses through some videos on YouTube and sees someone talking about your product, the person can visit the website and immediately buy it. Here, organic traffic will get 100% attribution for the conversion.
But there are scenarios when branded queries are the only organic search interactions and still SEO gets the credit.
But when you have a string SEO with a high level of visibility, the Return on investment (ROI) in SEOwill be higher, as the entire conversion happens through the single funnel.
- Retention impact is also something to consider in this regard. If the retention rate goes up owing to the SEO strategies, then the credit will certainly go to the investment in the SEO skillset.
- Availing of the high-priced tools and features of SEO can lead to much higher returns, even when the investment is high too.
Therefore, utilize the power of SEO to rip benefits.
Enjoy financial growth
Once you start monitoring the Return on investment (ROI) in SEO you will realize that the more you invest in SEO, the more the growth of the company. But you need the calculated amounts to convince the management or any other party that investing in the SEO will maximize Return on investment (ROI) in SEO.