Measuring the ROI of SEO
The marketing world is full of acronyms, but the most important is ROI. Measuring the return on investment for SEO marketing isn’t quite as straightforward as paid media, but it’s equally important - and the results are often better. Whether you’re a small business trying to make sense of organic search or an enterprise powerhouse looking for a baseline, here’s what you should know.
How to Measure the ROI of SEO
Unless you’re a business like Apple (and if you’re reading this, you’re probably not Tim Cook), you don’t have extra cash to toss at digital marketing. That’s especially true for smaller brick-and-mortar businesses with limited online revenue. Consistently and accurately measuring your ROI is a smart way to adjust your marketing budget based on real-world results, not hunches. Here’s how to get started.
Know Your SEO Investment (Cost)
Organic search might be free, but the marketing effort behind it isn’t. Keep track of all your SEO costs on a monthly, quarterly, or annual basis. Many Traverse City businesses experience substantial seasonal variations during spring and summer, so they often divide the year between off-season and in-season. No matter how you slice it, find all your receipts, including:
In-house marketing salaries or freelance SEO work (hey, how’s it going?)
SEO software subscriptions
Content creation costs (writing, optimizing, technical SEO)
Define Your Conversions (Return)
Clearly define what a conversion means for your business. For online retailers, it’s relatively straightforward - it’s a sale and the revenue each order generates. For other types of businesses, including B2B, it’s a little harder. Instead, you may need to assign value to a new sales lead, form submission, or newsletter sign-up. The longer the conversion cycle in B2B, the harder it is to neatly assign each conversion a value. It’s usually best to operate on averages, such as:
Average sales close rate
Average customer lifetime value
Average order value (for ecommerce)
Using averages is a good place to start as you clean your reporting analytics.
Crunch the Numbers
Calculate your SEO ROI by subtracting the cost of investment from SEO revenue, and divide the investment by 100. For the ROI formula should look something like this:
(Revenue from SEO Investment - Cost of SEO Investment) / Cost of Investment x 100
Let’s say you spent $5,000 on SEO last year and generated $20,000 from organic conversions. Toss that into your TI-82 and you’ll get:
((20,000-5,000) / 5,000) x 100 = 300
That means for every $1 spend on SEO, you generated $3 in revenue. That’s not too shabby!
What’s A Good ROI for SEO?
The average ROI for SEO varies widely by industry, the size of the organization, and many other factors. Especially for smaller businesses, the best approach is to establish a baseline and focus on consistent, incremental improvement - it’s not an overnight fix.
Here are some industry averages, but remember, these are large, established businesses with substantial SEO investments; your results may vary.
SEO Results Aren’t Immediate
You probably noticed the breakeven point for SEO is measured in months, not days. SEO is a long-term strategy that requires persistence, detailed research, quality writing, and patience. SEO takes longer than paid search to drive conversions, but it provides stable, high-quality traffic with a higher ROI when things click.
So, how long does it take for SEO to work?
SEO usually takes two to three months to measure the impact on both site traffic and conversions. Google usually crawls sites every two to three weeks, and it can take a few more weeks to accurately organize, understand, and rank your content. That’s when the best time to start your SEO project was about two months ago!
But how long does local SEO take to work?
Of course, another caveat works in favor of smaller businesses. Local SEO doesn’t take nearly as long to work. That’s because most local keywords are easier to rank for, easier to gain a high position for, and tend to have a higher user intent—nearly 80% of local searches result in conversion, whether online or in-store! Local SEO ROI tends to be much higher than similar national-level efforts.
Start Now. Stick With It. With Sovis Media.
Sovis Media has helped Northern Michigan businesses and nonprofits grow for over a decade. Of all our marketing services, SEO has repeatedly proven to be the most cost-effective marketing channel across all industries. Nothing delivers the ROI of SEO or the long-term benefits of a well-defined and thoroughly researched SEO strategy. Let’s get the ball rolling; get in touch for a 1:1, no-obligation chat - we’ll even buy the coffee.