Return on investment (ROI) is a mathematical equation used to judge the success of anything you put money and time into. ROI in SEO is how you figure out if the money you spend optimizing content for search engines is paying off. Note that paying off doesn’t always mean that you see an increase in sales. The payoff can include increased website traffic, increased engagement with visitors (like getting them to sign up for newsletters, put items in carts, reach out for more information, or simply stay on your website), and broader brand awareness. However, of course, increased sales are the ideal outcome for your SEO efforts. 

Understanding ROI in SEO is incredibly important. If you are a sole decision maker, understanding what returns you are getting on the time and financial investment of SEO will help you focus future efforts. If you are in a position in which you report to someone else, you must understand ROI for SEO to convince those above you what you should be doing more of and less of. Higher-ups often mistakenly assume that they’ll begin seeing results quickly and easily from SEO. Being able to understand how to share SEO’s ROI will help you justify your decision to continue this strategy. In this article, we’ll explain the basics of measuring ROI for SEO. Whether you need to inform other people about your results or need the information for yourself, this information will help.

How Do You Calculate the ROI of SEO?

The team at SEO Design Chicago has years of experience calculating the ROI for SEO efforts.  We can teach you how to figure out ROI for SEO, analyze your website’s SEO, and monitor ROI in SEO for you. But if you want to do it on your own, keep reading to find out how.

Figure Out Your Average Click-Through Rate by Position

In an ideal world, your site would be the first thing people see on Google results pages when they search for keywords related to your business. You can pay for the top spot, which is a sponsored ad you must pay for, but it’s even better to get the number one spot underneath those paid ads. However, it’s not easy to get that spot. Try to aim for “good (position 7), better (position 5), and best (position 2)” spots. 

Keep in mind that rankings change constantly. You may be number one on a given day and number 4 for the same keywords the next day. To get a good idea of what your average rank is, you probably shouldn’t check your rankings more than every four to six months.

Pull Your Conversion Rates for Each Analytics Goal

In order to figure out ROI for SEO, you need to set up Google Analytics 4 (GA4) and set goals in GA4. If you haven’t already done this, we can handle it for you. If you have already done this, log in and recheck your goals in Google Analytics. 

Sales are obviously one goal you may want to include, but what are some other goals you have for visitors to your website? After all, not everyone will buy something or use your services. So if that’s your only goal, that’s not realistic.

Some other goals you can set in GA4 include:

• Contact/Lead Form Submissions
• Click-to-Call Interactions
• E-commerce Goal Funnels
• Duration of Time on Site
• Total Number of Page Views in Session

Your goals are how you will define success in ROI for SEO. You need 3-6 months of data to see if the ROI is working.

Identify the Value ($) of Each Conversion Goal

It is important to assign a monetary value to each goal that you enter into Google Analytics 4. If you don’t do this or do it without a lot of thought, your ROI will be incorrect. Without an estimated value for each goal you’re tracking, it’s impossible to estimate the ROI of any parts on your site.

If you are a small business owner, you need to figure out what your hourly wage is. If you have an employee work on a goal, jot down that person’s hourly wage.

Estimate Traffic and Revenue Based on Search Volume

Once you have calculated your click-through rate (CTR), conversion rate (CVR), and goal value, you’re all set to start figuring out ROI based on search volume opportunities. You’ll also need MSV, which stands for Keyword Search Volume. This is an estimate of how many times, on average, a query is being searched for in a given month.

To find MSV, go into your Google Analytics account.

• Click the Tools icon.
• Click the Planning drop-down in the section menu.
• Click Keyword Planner.
• Click Get search volume and forecasts.

Then enter your numbers into this mathematical formula:

((Total MSV * CTR) * CVR)) * Goal Value = Estimated SEO Revenue Per Month

Want to estimate the total revenue over a year? Just multiply this number by 12.

Analyze the Estimated SEO ROI

To figure out the ROI for SEO, use this formula. 

(Estimated SEO Revenue per Month – Cost to Implement Strategy) / Cost to Implement Strategy * 100 = SEO ROI

Let’s Try Calculating SEO ROI With an Example

Still confused? Sometimes examples help. Let’s take it step by step using an example.

Let’s say your goal is to create a blog post that targets keywords receiving a combined 2,500 searches a month.

First, let’s estimate organic traffic. You estimate that this post can achieve an average ranking of 5 for each keyword. By analyzing the numbers in Google Search Console, you determine that the average CTR for keywords at position 5 is 6%. With just these two metrics, you can make a rough estimate of how much organic traffic this post will receive each month at an average rank of 5:

2,500 * .06 = 150 organic sessions

Next, we can calculate the revenue for conversions. Let’s say another goal is to drive people to fill out forms, and you’ve decided that every form has a $25 value. In Analytics, you can see that over the past 6 months, your organic conversion rate for form fills was 5.1%. Knowing that you’re estimating the asset to drive 150 organic sessions a month, you can now calculate how many forms fills those organic visitors will complete:

150 * .051 = 7.65  form fills

With 7.65  form fills at a value of $25, this content is estimated to drive a total value of $191.25 a month.

Now, let’s use the SEO ROI formula. Say this content will cost around $50 to get it live on the site. To measure the SEO ROI for just one month of performance,  the calculation would be:

(191.25 – 50) / 50) * 100 = 282%

Since SEO performance usually gets better over time, even a year’s worth of revenue from this post would be a great return on the initial investment.

How SEO Design Chicago Can Help You Figure Out ROI for SEO

It’s not easy to figure out the monetary value of conversions. You may not even have them set up in Google Analytics 4. When we work with clients, we start off by asking things like, “If you had to guess, what might a lead be worth – would it be closer to $100, $1,000? More? Less?”

From there, you can begin to narrow it down to a number that gives you and the team a better idea of ROI for SEO.

Because each company is different, assigning an average or good SEO ROI can be hard. Each business invests a different amount of money and time into SEO. Before your business starts to optimize your site for SEO, it is a good idea to start thinking about an ideal ROI for your business. The number you come up with can help serve as a benchmark for your business to measure against itself. 

Now that you know more about the basics of ROI for SEO and how to calculate it, you’re ready to calculate the ROI of your SEO strategy. If you have any questions about the topics discussed above, reach out to SEO Design Chicago! Our team of SEO experts is here to help you, whether all you need are a few answers or you need a full-service SEO agency to help your business. Check out all of our services today!

FAQ:

• What does ROI stand for?
• What is the equation for the ROI of SEO?
• Why is it important to measure the ROI of SEO?
• What are some goals you can set in GA4?
• What positions should you aim for on SERPs?