Measuring the ROI of SEO

SEO can be a sizable investment for a business. Whether you are hiring in-house or looking for agency support, SEO can cost a pretty penny. 

The reason so many business owners and marketing managers are hesitant to invest in SEO is that they’ve tried before and it didn’t work. They haven’t seen the benefit firsthand of moving into the top position for a coveted industry or product related keywords and the revenue they can generate. They know it’s working for competitors and it’s driving them crazy.

HOW DO YOU MEASURE THE ROI OF SEO?

  • Determine profitable keywords
  • Determine local of where you want to rank 
  • Track keyword rankings
  • Track organic website traffic 
  • Track conversions via organic 
  • Monitor changes being made 
  • Make sure the changes are resulting in an uptick in rank
  • Calculate the financial investment being made into SEO versus new business being generated by organic to ensure the ROI is there. 

The above is the cliff-notes answer as to “how to measure the ROI of your SEO.” There is a lot more strategy, critical thinking, execution and oversight involved if you want to truly understand how to measure success (continue reading).

6 SECTION OUTLINE – HOW TO MEASURE THE ROI OF SEO 

When you are paying a mechanic money to fix your brakes, you want to know what’s wrong, how it’s going to get fixed while making sure your vehicle works once you drive away from the shop (and for a long time afterwards). The same holds true for SEO. The business investing in SEO wants to know what’s wrong with their SEO, how it’ll get fixed while making sure the money they invest yields a positive ROI. 

  • SECTION 1: THE CHALLENGE 

      • There’s no guaranteed results with SEO. There are a lot of shady SEO companies out there. There are many individuals that claim they are “experts” but can’t actually move the needle. This makes the investment in SEO somewhat of a crap shoot. To make matters worse, a lot of SEO’s try to overcomplicate SEO, making it hard for the business owner to understand what’s working and what’s not working.
  • SECTION 2: WHY THE INVESTMENT IN SEO IS WORTH IT (IF DONE RIGHT)

      • We provide an example of a pizza restaurant to illustrate how profitable SEO can be if you yield the top organic results on Google.
  • SECTION 3: UP-FRONT STRATEGY

      • It’s key that whomever is working on your SEO is align with your business goals and objectives based on the following: 
        • Profitability 
        • Value of a Customer/Order 
        • Local to Target 
        • Research
  • SECTION 4: MONITORING WORK 

      • You should be asking what’s being done each month, what results were generated from the work being done along with future estimated goals and timelines.
  • SECTION 5: KEYWORD TRACKING 

      • Tracking keywords should be elementary for any SEO. If your SEO company or individual isn’t tracking keywords, that should raise a red flag. Your keywords should be tracked in a way that align with the upfront strategy.
  • SECTION 6: GOOGLE ANALYTICS & CONVERSION TRACKING 

    • An easy way to measure the ROI of SEO is looking at “Organic” traffic within Google Analytics. We’ll go into more detail showcasing why this isn’t enough. 

SECTION 1: THE CHALLENGE 

What’s challenging about SEO is there’s no guaranteed result. You can spend $50,000 on a full-time employee whose sole responsibility is SEO. If this individual doesn’t move the needle with your keyword rankings after a year, the ROI isn’t justified.

You can outsource your SEO overseas, which might be a cheaper alternative than hiring in-house or hiring an agency, yet outsourcing can do more harm than good if they are implementing thin content and black hat tactics.

You can hire an agency and pay them thousands of dollars per month, but if there isn’t a clear strategy or if you aren’t seeing an uptick in rank, again, the return on investment isn’t there.

The challenge when it comes to SEO is finding the right individual or the right partner. If you get this right, you’ll make a solid return on investment.

I compare making the right hire for SEO similar to NFL teams hiring the right coach. If you have a bad coach, your favorite team isn’t likely to succeed. There is game-planning all week leading up the game and key decisions that must be made during the game that can make or break the outcome. The same holds true for SEO. The upfront strategy and execution is so important. Regardless of the hours invested into an SEO campaign, if you miss on the strategy, it’s an uphill battle.

I recommend watching my video below on whether to hire in-house or hire an agency for SEO:


SECTION 2: WHY THE INVESTMENT IN SEO IS WORTH IT (IF DONE RIGHT)

The reason SEO is so important and profitable for businesses (if they get it right) is because organic placement on Google is earned, meaning you don’t have to pay for each click. If you can drive traffic to your site and convert the organic visitor into a paying customer, the ROI is much better than having to pay for each click. 

Let’s say you own a pizza delivery restaurant in Solon, Ohio, a suburb of Cleveland. If you get 10 new deliveries per day from people clicking on your organic results and each delivery is valued at $25, this is $250/day ($25 per order x 10 orders per day = $250). This would equate to $91,250 per year. This doesn’t take into consideration the repeat rate of the customer. If each new customer orders an average of twice per year, this would be $182,500! You start getting the gist of how profitable SEO can be for a business.

If a new pizza restaurant just opened up in Solon, OH, it is going to take time to establish authority and trust and page one rankings won’t happen overnight. Paid advertising can also yield a great ROI. 

The difference between paid and organic is with paid, you pay for each one of those clicks for people searching for “Solon Pizza Delivery.” This average cost per click can cost $3.00. If you send 20 people to your site through paid ads each day, this would equate to $60.00 in advertising per day. You might only convert 5 of those paid visitors. Utilizing the same metrics as above, if the average order was $25, this would result in $125 in revenue. You start to realize the margins are less when you have to pay for each click.

SECTION 3: UP-FRONT STRATEGY

The upfront strategy is crucial for any SEO campaign. Yet many businesses trust the SEO company or individual to make the right decision based on their knowledge of SEO and Digital Marketing. It’s a two-way street. The SEO needs to also understand the business they are working on so the right strategy is deployed.

If there’s a key takeaway from this blog, I urge business owners and marketers to be more involved with this upfront strategy. 

It’s important for this SEO company or person to know the financials behind the business. They’ll need to understand the type of customers and the intent of that customer so you are targeting the right keywords and locations. Even if the questions below aren’t being asked by your SEO provider, provide them with this information as it’ll help.

  • Most profitable services/products/items  

      • Our agency drives the majority of our revenue from SEO, PPC, Social Media and Web Design. If someone were handling our internal SEO and focusing the majority of their time and effort at the beginning to optimize our graphic design service page, this would be a mistake. Graphic design is a nice compliment to our web design services and many of our digital services, yet I wouldn’t want it to be the focal point of our SEO strategy. 
      • For our in-house eCommerce brand, DermWarehouse, it’s important that we drive revenue for our private label brand as it’s more profitable than other products we sell from manufacturers as our margins are higher. 
        • It’s important the person working on your SEO knows the most profitable services and products so they devise the right strategy and implement accordingly. 
        • You can have a new product or service that has the potential to be profitable if it ranks on Google. Again, this comes from the upfront strategy.
  • Value of a each customer or each order 

      • One of our clients is an IT company that focuses on Managed IT support. Their average client averages over $20,000 per year in monthly billing. This is quite different from a pizza company that averages $25/order. While the IT company has a higher ticket client, they do much less volume. One or two new clients could easily justify the return on investment for SEO services. This requires more patience from the client as there will be less leads generated than the pizza company, per say.
  • Most important markets to target 

  • Keyword Research

    • Targeting the right keywords is just as important as picking the right markets. You need to do proper keyword research to make sure your keywords align with your business revenue, profit and goals. 

Once you get organized with all of the components above, it should be easier for you to measure the ROI of your SEO efforts. Let’s say the pizza shop in Solon is paying an SEO agency fee of  $1,000/month. If they can prove that each day, the top placement on Google is generating 10 new customers per day and the average customer is worth $25, it will be easy to see that the revenue being generated is much higher than the agency fee. 

Success Story: One of my favorite SEO stories is when our firm helped an apartment community rank in the local pack on Google. This apartment complex started getting 8-10 new contact form submissions per month. Because of this, 1-2 of those new form submissions turned into a new tenant, which helped them generate $15,000 per year.

In order to measure the SEO results, it’s important that the proper measurement and analytics are set-up. 

SECTION 4: MONITORING WORK 

On the SEO services page of our site, we list out how we tackle SEO tasks based on the following:

  • Local SEO 
  • On-Site SEO 
  • Link Building 
  • Blogging 
  • Technical SEO 
  • Reporting & Client Communication

Make sure you have a clear understanding of what SEO work is being done for your business. You can ask a simple question each month that will hold any SEO company or individual accountable:

  • What was done last month? 
  • What results did we see from the work that was done? 
  • When do you anticipate we see positive results from what was done? 

I mentioned earlier how SEOs tend to over explain the work that’s being done, making it tough for others to follow. The questions above will make it simple for you to understand and will force the SEO to explain it in layman’s terms.

SECTION 5: KEYWORD TRACKING

Our firm utilizes SEMRush for client keyword tracking. There is also Moz and Ahrefs (to name a few other options).

Keyword tracking is fairly self explanatory. It tracks your keyword rankings on Google. 

Rather than having to type in keyword variations into Google manually to see where your business is ranking (which isn’t an accurate way of detecting rank), a keyword tracking service will tell you each day where you’re ranking. It will also give you insight into the following:

  • Your rank versus competitor rankings 
    • There’s no better way to measure the ROI of your SEO than seeing how you stack up versus the competition!  
  • Location of where you want to rank 
    • Track at the city level, suburb level or zip code level
  • Track your Google My Business Rankings 
  • Track featured snippets and reviews 
    • There’s many ways to rank on the first page of Google! In addition to local pack and organic, there’s also featured snippets, reviews and videos! 
  • Create Tags for Segmentation
    • If you’re a personal injury lawyer and want to know how your firm is ranking for auto accidents versus malpractice, it’s good to create tags so you can see the search visibility broken out by these different areas of your business

To measure the ROI on your SEO, you should be seeing more positive gains in your rank. After changes are made on the site, you should be expecting to see an uptick in your rank. The SEO company or in-house individual should have inserted your keywords into the software prior to any implementations so you have a benchmark for comparison purposes. 

SECTION 6: ANALYTICS & CONVERSION TRACKING

A mistake a lot of people make is to look at their overall organic traffic within Google Analytics to see whether or not there’s been a year-over-year improvement.

It’s a mistake looking at this. Let’s say the SEO company you hired started blogging. If beforehand you didn’t have a blog strategy, these blogs can drive a lot of organic traffic to your site. If the blog topics aren’t strategically selected, this can result in high traffic amounts but low conversion count.

It’s important to look at your money-making pages. Alluding back to the personal injury lawyer, a PI attorney in Columbus is likely going to want to rank for the following pages on their site:

  • Homepage for Columbus Personal Injury Lawyer 
  • Medical Malpractice page for “Columbus Medical Malpractice Lawyer” 
  • Additional service level pages at the city level 

If this PI attorney was generating a lot of organic traffic for blogs but not seeing the uptick in rank, this could be deceiving. Make sure your business has organic broken out by blog, service or product level pages. This will provide more of a clear picture on the impact of your SEO. 

The same holds true for conversion tracking. It would be a disservice if you were tracking great improvements in traffic but there’s no conversions taking place. You can view different goals we recommend setting-up to provide inspiration as to what reports should be sent your way. 

IN CONCLUSION 

Ultimately, your business needs to make more revenue versus what it is investing in SEO for the return on investment to be justified. You should have a better grasp if this is happening based on what’s outlined above.

If your businesses keyword rankings are increasing, you’re driving more conversions and your business is up in revenue, this is a good indicator your SEO is working. If you’re investing $2,000 per month into SEO and you’re still not seeing a difference in your rank or lead/sales volume several months into your campaign, it’s time to consider whether the ROI is there. Hopefully this article will allow you to better understand the results you should be experiencing and the questions you need to be asking.