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ROI of SEO: How to Measure It and Why It's Important

Date published: November 20, 2023
Last updated: March 7, 2024

SEO is a powerful marketing tool. Optimizing your content for search engines may be a concept that is always evolving, but it remains a critical part of digital marketing success all the same. 

An effective SEO strategy can reinforce your online visibility and increase your organic traffic. It can amp up your conversion rates and ensure that your content is ranking high on the SERPs for keywords related to your business. 

The question is, how do you know your SEO work is paying off? Here is how to measure the ROI of SEO.

1. Compartmentalize Your SEO Efforts

The first thing to consider when measuring SEO ROI is how to compartmentalize each SEO campaign you create. Establishing these boundaries helps you measure the effect of specific SEO initiatives. 

For instance, consider a project where you invest $20,000 in creating a pillar page and its accompanying sub-pages and additional pillar content. That should be a single SEO campaign that stands on its own. 

This makes it easier to track the effects of that campaign (more on tracking metrics in the next section). It also simplifies the task of comparing the impact of each individual campaign against others like it.

2. Measure the Right Metrics

Next up, consider what SEO strategy metrics you can measure. There are several key metrics you can consider here:

  • Organic traffic: This is traffic that doesn’t come to your site from paid ads or direct traffic (e.g., not from a search engine). You can use a tool like Google Analytics to track organic SEO traffic over time.
  • Keywords: Keyword research is a big part of a good content marketing strategy. Use a SEO tool to measure how you’re ranking for each keyword over time.
  • Conversions: These are user actions that you consider important, such as signing up for a newsletter, clicking on a download, or most importantly, making a purchase.  

Setting up the ability to track each of these metrics is critical to creating a clearer picture of your SEO ROI.

3. Consider the Monetary Value of Each Metric

Once you have your metrics, you want to get a rough idea of what they are worth. In some cases, this is difficult to pin down. 

For instance, ranking for a keyword that is relevant to your brand helps with important things like traffic, visibility, and credibility. However, it’s difficult to put a specific monetary value on ranking for a keyword.

A rise in organic traffic is valuable, as well. But conversions are the easiest ways to put a real dollar figure on your ROI. 

For instance, if you have a 5% lead conversion rate (i.e., the number of leads that convert into customers) and your customer lifetime value (LTV) is $10,000 per person, you can calculate the monetary value of each conversion thusly:

LTV x lead conversion rate = $10,000 x .05 = $500

As a quick note, Google also offers the ability to track Assisted Conversions. These take place when SEO and an organic search result take part in a conversion without being the only interaction a consumer has with a brand before making a purchase. If you have this data set up, it’s wise to factor it into your conversion rate value, as well.

Once you have a value per conversion, you’re ready to measure your SEO efforts to ensure a positive ROI.

4. Calculate an Estimate of Your ROI

You can measure an estimated value of your SEO by using an ROI for SEO formula. This is a basic mathematical exercise that looks like this:

SEO ROI = (Conversion Value - Cost of SEO Investment) / Cost of SEO Investment 

In other words, start with your value per conversion times the number of conversions you’ve achieved (i.e., Conversion Value) in association with a particular SEO campaign. From there, subtract the cost of that SEO, and then divide the total by that same cost again.

In the above example, say you generate 50 conversions during an SEO campaign that costs $5,000. The Conversion Value would be 50 x $500 = $25,000, and the final ROI calculation would be:

SEO ROI = ($25,000 - $5,000) / $5,000 = 4

That means for every dollar you spent on SEO, you made four dollars in ROI. Keep in mind the compounding effects of your SEO efforts, though. And once you make it on the race track and are ranking well, you’ll continue to benefit from your efforts and the ROI can really begin to snowball. 

Why Is It Important to Measure the ROI of SEO?

As with most things in business, understanding the return on investment for your SEO matters. Search engine optimization is a powerful business tool — but that doesn’t mean it’s a magic bullet.

On the contrary, it’s perfectly possible to pour significant time and resources into an SEO strategy and see little-to-no impact. Even worse, you can have no idea whatsoever if your SEO is working.

Measuring how your SEO marketing is influencing your revenue gives you a factual confirmation of whether or not it is helping your marketing efforts.

It may not be a direct dollar-for-dollar calculation, like comparing a salesman’s salary to the amount of revenue they generate. Nevertheless, getting at least an approximate idea of how well your SEO is working to generate revenue for your brand helps you do two things. 

First, you can identify weak points and improve your SEO’s overall effect. Second, you can justify the SEO investment and help guide how much you should budget toward search engine optimization in the future.

Investing in Effective SEO

Content marketing is a multi-faceted activity that should always focus on your target audience above all else. With that said, it’s also important to prioritize SEO as you craft content. 

By cultivating SEO with a high ROI, you improve the quality of your content in the eyes of search engines. Hire an SEO agency if you need an expert's opinion. All of these factors can help boost organic traffic and can keep a steady flow of consumers visiting your site for the long term.

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