SEO isn’t your game if your intention is quick results. Period.
There is no harm in expecting quick results, but Search Engine Optimization isn’t the solution that can fulfill it.
You’d be better off with Google Ads or other paid search campaigns that give you immediate visibility, thereby more revenue in the shortest time possible.
What I mean to say is that your SEO ROI calculations will definitely look profitable in the long run. And at least sometimes, your SEO service provider isn’t at fault but your unrealistic expectations may be the real culprit.
However, your patience to invest consistently in content creation, link building and other SEO strategies will decide whether you will reap a more significant ROI out of it or not.
When you start seeing SEO ROI improving, you can sense the brighter side as it will turn out as the most revenue-generating marketing strategy compared to others.
In this blog, let me explain why you shouldn’t risk using blackhat techniques for faster results and why continuing to make SEO improvements that really matter to your audience can benefit your website.
How does SEO improve ROI?
Obviously, if you have invested in SEO, you are looking for better organic visibility on search engines through higher keyword rankings, which will help increase your organic search traffic.
But what you also need to know is that you are putting money into a long-term marketing plan, and there is little control that the SEO agency has in deciding the timeframe for guaranteed SEO results.
There are over 200+ factors that determine whether your pages will rank higher on Google. But that shouldn’t mean that you should ignore SEO.
Over time, as your website’s rankings improve and you attract more visitors through organic search, your ROI will also improve.
In fact, SEO has turned into one of the most effective digital marketing strategies for improving ROI.
How to Measure ROI of SEO Campaigns?
So, here is where your acumen in finding the right SEO agency matters.
I’ve come across countless website owners complaining that the SEO agency shows improved keyword rankings and better organic traffic. Still, there isn’t a noticeable difference when it comes to the actual revenue generated.
As far as I look at such campaigns, they are a failure. If the SEO campaigns can’t really achieve the goal of a website owner, there isn’t any reason to continue with the agency that’s implementing it.
Any SEO campaign must be rooted in helping the website owners achieve the desired goals. For example, if it’s a product, SaaS, or an Ecommerce website, they want sales from SEO investment.
Of course, better keyword rankings and traffic may help in branding, but that may not be the focus of all businesses.
In most cases, the decision makers of companies decide to dump SEO investment because they never really saw it making an improvement in actual revenue generation.
These dejected website owners invest more into paid campaigns and considerably reduce the SEO investment.
So, when calculating the ROI from SEO investment, make sure to take into consideration the aspirations of the website owners.
ROI for SEO campaigns is typically calculated by measuring the increase in organic traffic, leads and the sales generated through the conversion of the organic leads.
The increase in organic traffic, leads and revenue is compared to the total cost of the SEO campaign to determine the final ROI.
It would be ideal to also consider the cost per lead acquisition as a variable to better calculate the SEO ROI because organic leads save you a lot of money when compared to leads generated from PPC and other paid campaigns.
What that means is that if you spent $10,000 on SEO over the course of a month and it resulted in $40,000 in revenue or $40,000 worth of leads, your ROI would be 300%
SEO ROI Calculator
($40,000 – $10,000) / $10,000 = 3 x 100 = 300%
However, in reality, the average ROI from SEO hovers somewhere between $1.5 – $2.75 per $1 investment.
According to SEO ROI Statistics, Ecommerce sites get better ROI than other types of websites with an average of 3% click-throughs converting into sales.
This isn’t going to be the same for all industries as the cost of the products and the target audience are factors that determine the conversion rate and ROI.
But if your website is focused on lead generation, the cost per lead will decide the ROI. On the other hand, if you are a publisher, the ad revenue generated through the increase in traffic will determine the actual SEO ROI.
How Long Does it Usually Take for SEO to Generate a Return on Investment (ROI)?
This is one of the most perplexing questions that SEO agencies and professionals come across from their clients before and after they invest in SEO.
However, there isn’t a definitive answer and if someone promises guaranteed SEO results in a few weeks or months, that means you just came across a scam.
There are different factors that determine the duration required to see positive SEO results. Though the investment you make matters, factors such as the competitive landscape, the size of the business and the type of target audience that you serve play a pivotal role in determining the success of your SEO campaign.
Generally speaking, SEO can take anywhere from a few months to a year or more to generate a significant return on investment.
When you are mentally prepared to wait and consistently invest in SEO, the results can show up ahead of the proposed waiting time. This can drastically improve your confidence in SEO strategy.
How to Calculate SEO ROI Using Google Analytics?
If you are a small business owner who wants to see the results generated through SEO campaigns, consider Google Analytics as your go-to tool. Google Analytics is one of the most powerful freemium tools from Google and it has everything you need to calculate the SEO ROI.
It doesn’t matter if your ROI is based on conversion, lead generation or advertising revenue, Google Analytics will help you calculate the SEO ROI.
With proper conversion tracking put in place, you can measure conversions, leads, important user activities and goals.
Tracking Leads and Sales
Let’s start with tracking the leads because, in the case of most businesses, it’s the nurturing of leads that later translates into sales. This means if you are not able to track efficiently the number of organic leads acquired, your lead to conversion ratio may look skewed.
The easiest way to track the number of leads is by having a lead generation form and a thank you page that appears when a user completes the intended action.
To track the leads you must first set up a goal by going to the setting of your Google Analytics account.
Here, you can find Goals in the third row. On clicking on the Goals, you can find the list of goals that are already set up for your account. If you don’t have any, you can add one based on your requirement.
Since we want to set a goal for tracking leads, the easiest way to do it is by setting up a destination goal. This type of goal is triggered when users are redirected to a Thank You page after downloading or completing a form.
There are a few templates that Google Analytics offers as presets.
However, we are going ahead with a custom goal. Now, inside the Goal description add the name of the campaign that you want to track, and then select the Type as destination.
Continue to the goal details wherein you have to add the destination URL. If you have identified the cost per lead, add it as the value of the lead.
Tracking Conversion (non-ecommerce sites)
If you are offering a service or selling one or two products using your website, the easiest way to track conversion and the ROI is by adding the value of the product in the goal details. The rest of the process remains the same as we discussed above.
Add the value of the product or service in the optional field “Value” inside Goal Details.
In the above screenshot, any user who lands on the destination URL will be assigned a conversion value of $50.
So, what if the same user visits the page later? That could trigger yet another conversion, right?
Thankfully, Google has an optional checkbox called “Funnel” within the goal details to eliminate such instances.
What a funnel does is it gives instructions to Google Analytics to consider a visit as a conversion only if the user visits the destination page after visiting a specific page or a series of pages within the funnel.
NB: Make sure to turn on the Required button to confirm that you want Analytics to consider the funnel before considering a conversion.
Once you have set this correctly, hit the “Verify This Goal” option and then save the goal and exit.
You can find the overview of the Goals inside the Conversions tab inside the Analytics dashboard.
Now you have the tracking enabled but your focus is to find the ROI generated through SEO, which means Organic conversions.
To see the organic conversions and the value generated through them, head on to the sub-tab Multi-Channel Funnels within the Conversions section and click on Assisted Conversions.
Here, you can find all the conversions during a specific time period and the different channels that assisted them. You can see organic search conversions and the conversion value within this dashboard.
You can also see the conversion path of the users, meaning the most common channel touchpoints before a user converts. This is one of the easiest ways to assess the SEO ROI of your website.
Tracking Sales of E-Commerce Website
E-commerce is a gigantic mammoth topic in itself and there are multiple platforms that can help you get an Ecommerce store up and running. However, we will be talking specifically about WooCommerce and how to track conversions from WooCommerce websites.
Before going into WooCommerce and the specific plugin that passes on the data regarding the revenue figures, you must first enable E-commerce in Google Analytics.
This is a pretty straightforward process. Head on to the settings and in the third column named View, you can find the tab for E-Commerce Settings.
Clicking on it you will find a radio button to enable e-commerce and just below it you will find an optional setting to enable the Enhanced Ecommerce setting. Enable both the settings and you are done with Google Analytics.
But before you exit Google Analytics, make sure to add labels for the checkout-funnel steps you identified.
You need to add the proper codes to the Thank You page in order to start collecting conversion-related information.
Google has a whole document that explains how this can be done. However, you may require some advanced technical skills to make the codes work. That said, you have another option that is way easier to implement.
If you have a WooCommerce website, go to Add New Plugin and type “Enhanced Ecommerce for WooCommerce”
Now, you can see the Conversios.io plugin by Tatvic. This is one of the most popular ones in the industry, and all you need to do is to hit the install now button.
This plugin comes with a host of features including Shopping Behavior Tracking, Checkout Behavior Tracking and a whole lot more Google Shopping based features.
You should be able to see the conversions within your Analytics dashboard after you complete the setting up of the plugin wherein you need to enter the Analytics Tracking ID.
After that, WooCommerce will automatically send the conversion and revenue data from your traffic to your Google Analytics using the plugin you just installed.
In order to calculate the SEO ROI generated from organic search traffic, make sure to filter the conversion revenue by clicking source as Organic within the Analytics Dashboard.
Curious Case of Lifetime Value of Each Conversion
Here’s the thing, if you are in a lead-based niche like an SEO Service provider, you must take the lifetime value of your organic leads into consideration when looking at the overall success of the SEO campaign.
For example, in Stan Ventures, when our organic leads convert, they may pay just around $100-$500 to kickstart the campaign. However, over six months to a year, they increase the order value month over month as they see improvements.
So, it’s ideal not to look at SEO ROI with microlens, especially in a service-based industry. But of course, your sales representatives play a massive role in the process but when evaluating the success of an SEO campaign, make sure to add the Lifetime Value of the customers as a determiner.
Questions About SEO ROI Answered
How long does it take to see ROI from SEO?
SEO is a long-term investment and has the potential to give you exponential growth. However, the initial days may seem a bit bumpy as results are not easy to come. Often, it’s only after a Broad Core update that Google might understand the value that you put forward. But unfortunately, it happens only twice or thrice a year which means you may have to wait 3-6 months to gain the initial traction.
How Do I Know if My SEO ROI is Good or Bad?
The ROI of your website is closely linked to the KPIs you have for your business. If the campaign achieves the results that you have identified in the KPI without burning your pocket, you can consider it a win.
What is the Formula to Calculate SEO ROI?
(Revenue Gained from Organic Leads/Sales – Total SEO Campaign Investment) / Total SEO Campaign Investment
Now, multiply the figure you get by 100 to see your SEO ROI. This is the basic but most used formula to make an ROI report.