Search engine optimization has earned a reputation as one of the best and most profitable marketing strategies, but what is the ROI of SEO?
The basic formula to determine the return on income (ROI) in SEO is similar to other marketing tactics. But, getting the best results from your organic search efforts requires you to take actions beyond simply analyzing data. In addition to extensive testing, you also need to monitor your organic search traffic influx and ensure that you continue measuring SEO ROI to guarantee long-term success.
In this article, we’ll go over the definition of ROI in SEO and help prove the profitability of this technique. Next, we’ll share tips to help you calculate the ROI of an SEO strategy and compare it to other marketing channels. Finally, we’ll discuss key concepts you need to know to boost your SEO efforts and tell you approximately how long it can take for your organic traffic to start coming in.
What is the ROI of SEO?
Before going over the return on income of an SEO campaign, it’s important to understand both ROI and organic search marketing.
Return on investment is a metric that allows you to measure how much money you made for each dollar you spend on marketing. This can be applied to basically all of your digital channels, albeit with a slightly different formula for each one.
An SEO strategy, on the other hand, is a marketing plan that focuses on attracting traffic from search engines like Google. Unlike other forms of advertising, you don’t have to pay for traffic generated through organic campaigns. So, if you leverage your SEO investment wisely, you can drive a huge amount of traffic without it costing you a lot of money.
So, what is ROI in SEO?
As with other digital marketing channels, ROI measures how profitable your SEO efforts are. This includes all areas that represent an investment, for example, any SEO tools you purchase, the time you invest in creating Google Analytics accounts, and every other necessary step.
Proving the ROI of SEO
When analyzing ROI SEO metrics, it’s easy to see why this marketing technique is so profitable.
First off, 3 out of 4 users never get past the first page of Google search results. If you’re not on the first page of search engine rankings, you’ll only receive the opportunity to interact with 25% of people who conduct a search. This greatly limits your campaign in terms of profitability, even if all other areas are sound.
Additionally, your ranking on subsequent pages also matters, so a low position can further reduce your marketing ROI.
The main goal of SEO is to get you on the first page of relevant organic search results. Almost 93% of all traffic comes from clicks on the first page of search results, so focusing on this marketing channel can exponentially increase the number of visitors that go to your site.
While these value from one industry to the next, it’s also important to note that metrics such as customer lifetime value (LTV), organic conversions, and revenue generated are also higher in companies that attract first-page traffic.
This can be attributed to the fact that customers are more engaged when they find content that has high organic visibility, rather than pages reached through Google Ads and other paid platforms.
How to Calculate ROI in SEO Strategies
Now that we’ve covered the basics, it’s time to learn how to calculate your SEO return on investment.
Remember that the ROI of your organic efforts is tied to the dollar value that each conversion produces. So, besides setting up conversion tracking, you also have to determine the average conversion value and find out the click-through rate of your SEO rankings.
The most basic way to calculate SEO ROI is to divide the net income by the total investment, and then multiply the results by 100. It should look a little like this:
ROI = Net income / Cost of investment x 100
This formula can vary based on your expenses, investments, and other budget variables. Let’s take a closer look at two key concepts.
The Cost of Organic Marketing
If you want to get an accurate read of ROI for SEO strategies, you need to include all the expenses related to this form of marketing. This includes link building, the cost of producing each blog, and all other SEO costs.
Setting up proper conversion tracking on your Google Analytics account is also necessary as it’s the best way to track lead generation. That said, remember to set up additional conversion-driven elements and track contact form submissions as well as other relevant interactions on your site.
Key Performance Indicators
Key performance indicators or KPIs are the metrics used to measure the success of your SEO campaign.
KPIs can also be applied to other strategies like paid search, although it’s important to note that the key metrics for content marketing, social media marketing, and other strategies are different.
In other words, you need to zero in on the metrics that deliver true value, measure online transactions accurately, and monitor traffic closely, especially if you run a lead-based business.
Why Is Organic Marketing Important to Your Marketing Results?
SEO has become one of the most effective ways to reach your audience. This is because most individuals turn to search platforms like Google when looking for products and services. By creating an SEO plan that works in unison with your content marketing posts, Google Ads, social content, and email sequences, you’ll experience exponential growth in no time.
How Long Does It Take for SEO to Produce Results?
Earning organic visibility is tough, but it’s the only way to boost your SEO ROI. Now, it’s important to note that Google has many features in place to help prevent unscrupulous websites from claiming its first page results. This is the reason why, unlike paid ads, it may take some time to start seeing results from your SEO.
Each website and industry is different. Rather than hoping for fast results, your best bet is to monitor your Google Analytics performance patiently or hire SEO services from a reliable agency. This will help ensure that you get results as quickly as possible and that all SEO work is performed by knowledgeable experts.
Ready to Find Out the Real ROI of SEO? Contact Fannit Today
If you’re having difficulties calculating the ROI of your SEO, you’re not alone. Fortunately, you can always partner with an SEO agency that handles your marketing while you focus on achieving a positive ROI in other areas of your business. Want to get the highest ROI from SEO? Learn more about Fannit and how we can help you obtain a good SEO ROI by contacting us today.
