Calculating SEO’s Return On Investment
Search engine optimization is a proven marketing strategy that adds organic value to your website. Rigorously researched, well-written content paired with sound technical structure improves page rankings, increases brand awareness, and attracts new customers; if it didn’t, SEO wouldn’t be a $90 billion-plus industry.
Investing in SEO isn’t an overnight solution to growing your business, but in most cases, it offers a competitive return on investment and lasting results.
How to Calculate SEO’s ROI
Before getting into averages, it’s worth taking a second to establish exactly how to calculate your return on investment for one-time or ongoing SEO work. Like any ROI calculation, you’ll need some information handy, specifically:
Total costs: This should include in-house SEO work, agency or freelancer fees (totally worth it, of course), and expenses incurred for content creation, optimization, and technical SEO work.
Organic revenue: This will include the revenue you can attribute to organic search traffic.
For ecommerce, this is relatively straightforward; look at revenue from organic search over your defined period.
For lead generation, you’ll need to assign a monetary value to each lead based on your sales conversion rate and average deal value. Since both of these numbers fluctuate over time, it’s worth revisiting and resetting the dollar amount attributed to leads to ensure you’re giving your ROI calculation quality data; consider adjusting your lead value every 6 or 12 months.
Then, it’s a matter of punching in the numbers. Let’s assume your online store generated $20,000 from organic search last quarter, and you invested $5,000 between your own marketing team’s efforts and your trusty freelancer (hey again).
To calculate ROI for SEO, break out your TI-84:
SEO ROI = ((20,000) - (5,000) / 5,000)* 100
Which equates to 300%. That means for every $1 you spent on SEO, you brought in $3.
Tracking and Measuring SEO ROI
There’s a bit of nuance here. How much and how quickly SEO boosts your business depends on several factors, including the competitiveness of your industry, the size and technical health of your website, and the broader macroeconomic environment. But we’ll focus on the factors you can control.
Traffic Attribution
Like all formulas, the result is only as accurate as the data you put in. It’s essential to have reliable traffic attribution to ensure you’re only counting organic traffic. This means giving your Google Analytics 4 or platform-specific analytics tool a thorough audit to make sure your data is clean.
Timeframe
You’ll also need to measure ROI over longer periods. Since SEO takes at least a few months to really take effect, six months is the absolute minimum period we recommend for running any ROI calculation. If your business is highly seasonal, then a 12-month period is probably much more useful.
Other Benefits
Even if organic traffic doesn’t skyrocket, investing in SEO will increase brand awareness by placing links higher on the search engine results page (SERP) for relevant terms. Especially for younger, smaller businesses, this is an excellent way to become part of your customers’ research cycle. If your pages are consistently near those of established industry leaders, prospects will eventually check you out too.
The Average ROI for SEO, By Industry
The larger the average conversion value, the higher the expected return on investment (ROI) for SEO. It makes sense; signing a $15 million construction contract on a $5,000 SEO project is going to have a significantly higher return than selling a $5 cup of coffee. The industry with the highest average ROI for SEO is real estate at 1,389%, with an average breakeven timeframe of 10-13 months.
Should I Invest In SEO?
SEO should play a role in any marketing efforts and serves as an “always-on” tactic. Increasing organic sessions (while maintaining quality, as measured by metrics such as engagement rate) will reduce your business’s reliance on paid search, allowing you to become more strategic with your paid budget. If you’d like to learn more about SEO, get in touch.
Put SEO to Work For Your Organization
Investing in SEO is a smart way to build a strong foundation for your brand and generate online revenue to augment other sources. Sovis Media works with small businesses and nonprofits to create an effective marketing strategy that delivers without eye-watering invoices. Let’s talk; contact us today to get started.