SEO ROI: What Is the ROI of an SEO Campaign? How to Calculate SEO ROI?

Lots of digital marketers openly proclaim that search engine optimization (SEO) is the best marketing strategy for most businesses. 

But what makes a marketing strategy the best? Obviously, that question is subjective. However one of the most common ways to evaluate the quality or effectiveness of a marketing strategy is to measure SEO ROI– its return on investment. 

In other words, we want to know whether a strategy makes more money for a business than it costs them to keep the strategy going. If you spend $10 on ads, do you get at least $10 back?

The higher the ROI, the more valuable a marketing strategy is – at least, by this metric.

So what is the ROI for an average SEO campaign?

How do you calculate SEO ROI? 

And does this justify investing in the strategy?

Why Does SEO ROI Matter?

ROI is important because it's one of the most effective tools for ballparking the true value of the digital marketing strategy.

We can't simply look at performance, because this doesn't take cost into consideration. For example, let's say a new marketing strategy brings you $5 million of new revenue, but it costs you $6 million to plan and execute; even though this strategy brought in lots of money, it's still technically a net loss. 

If the ROI of a marketing strategy is positive, we can consider it a sound investment. We can also use relative ROI to compare different marketing strategies and determine which, among them, is most worthy of our investment dollars.

Ultimately, ROI calculation serves many purposes at once:

• Performance evaluation. ROI is perhaps the most objective and fair way to evaluate the performance of an SEO campaign. If the ROI is positive, it's worth pursuing. If the ROI is growing, you're doing something right. If the ROI is shrinking, you’re doing something wrong. If you hire an SEO agency and they help you get an even higher ROI, you make the right choice.
• Investment/spending guidance. Calculating and understanding SEO ROI can also guide you in investing and spending. For example, if you know your SEO campaign has a significant positive ROI, you may feel comfortable increasing your spending on this category.
• Brainstorming and ideation. When you measure SEO ROI as it applies to different strategies and tactics, you can use it as a tool to brainstorm new ideas and plan new directions for your campaigns. For example, you may find that your ROI increases when you pursue a new genre of content or when you target a new audience; discovering patterns and correlations between different tactics and ROI can help you decide what to do and where to go next.
• Apples to apples analytics. ROI is a great equalizer as well since it applies equally to almost any conceivable digital marketing strategy. If you have an SEO strategy, an email marketing strategy, and a social media marketing strategy operating simultaneously, you can use the ROI for each of them to compare and contrast their effectiveness.

The Expected ROI of an SEO Campaign

So what do we expect, on average, from an SEO campaign? The expected ROI of SEO is going to vary depending on what, exactly, you’re measuring and who’s doing the calculating. Marketing strategies, in general, are considered a great success if you have a 500 percent ROI – in other words, getting back $5 for every $1 you spend. ROI for an SEO campaign could be as high as 1,220 percent – or even higher – but if the campaign is mismanaged, you could come up negative. Generally, we expect the ROI for any SEO campaign to be roughly positive. In other words, you should make back all the money you spent on SEO, assuming you already have a profitable business in place. As for the degree of positive ROI you see, that depends on many variables, such as:

• Industry. Different industries have different strengths and weaknesses when it comes to practicing and implementing SEO. For example, your industry may be highly reliant on online traffic for purchases, making all your organic ranking increases more valuable, but this may also mean that your industry is rife with SEO competition, forcing you to spend more money to rank higher. You're probably already familiar with the fact that each industry has a different profitability model and a different expected ROI for general marketing; SEO is no exception to this.
• Strategy. Much depends on your strategy and how well you implement it. If all you do is practice generic optimization techniques, with no target keywords or clear strategic focus, your ROI is going to be lower than if you put all your effort into focusing on the most valuable optimization routes. Better content, better links, more focused tactical SEO efforts, and other strategic wins can instantly boost your ROI.
• Competitors. Competitors are an obstacle to ROI growth, so if your industry is overrun with competition or if your rivals are investing heavily in SEO, you should expect your ROI to be slightly lower than it otherwise would be. Ranking highly would be trivially easy if you didn't have any competitors, but nearly every business has at least some competitors to deal with. How you deal with competition also matters, as we'll explain in a future section; trying to compete directly can cause you to overspend and compromise your ROI.
• Algorithm changes. Google's search algorithm and, with it, the world of SEO is always changing. If the new algorithm update changes the way that Google evaluates content, or if you fail to adapt to new strategic needs in the industry, your ROI could be compromised.
• Integrations and connected strategies. Your overall ROI also depends on how your SEO strategy is integrated with other marketing and advertising strategies. For example, you may write a piece of content for SEO, but that content could also work well for your email marketing campaign; if you can find ways to milk additional value out of each SEO asset you create, you can multiply your total return many times over.

It’s also important to realize that SEO is a long-term strategy. Over time, you'll accumulate more on site content, you'll build more links, and you'll generate more authority and trustworthiness for your domains. The more you invest, the more powerful you'll grow, and the easier it will be for you to get new pages to rank. The early days of SEO are usually difficult because you won't see any immediate progress from your first round of SEO efforts. Because of this effect, the ROI for an SEO strategy is usually low, or even negative, in the first couple of months. By the time you've spent a few months practicing this strategy, you should be consistently positive. After a few years, you should see much better, more positive results.

Calculating the ROI of Your SEO Campaign

To gauge the performance of your campaign, and evaluate whether your spending is “worth it,” you’ll need to calculate marketing ROI for your own efforts.

The most basic method to calculate SEO ROI is very simple. You simply need to compare the revenue this strategy has generated with the money you've spent on it.

In practice, any effort to calculate SEO ROI can get complicated fast. 

Let's start by looking at what you spend on SEO. If you want your calculation to be as accurate as possible, you'll need to incorporate all your expenses.

That includes whatever you're paying for SEO agency services and SEO contractors, as well as the salaries of internal SEO personnel and the true costs of any time you spend managing your campaigns.

On-site optimization, content development, link building, and analytics all have individual costs that need to be accounted for.

Once you calculate SEO ROI for a given period, you can estimate how much of a return you're getting from your organic search.

There are a few different approaches you could take here, but it's easiest to start by looking at the behavioral patterns of your organic traffic.

Organic traffic to your website is generated exclusively by organic search engine results pages (SERPs), so it's an excellent way to look at the people coming to your website because they discovered you through search.

First, regularly monitor and check your Google Analytics dashboard.

How many organic visitors are you generating? What is your conversion rate for these visitors? And what is your customer lifetime value (CLV) among these customers?

As a simple example, let's say you generate 10,000 organic visitors per month with a conversion rate of 2 percent. That means your organic traffic is leading your business to win 200 new customers each month. If each customer has a lifetime value of $1,000, this represents $200,000 of returns. Even if you're spending $10,000 a month on SEO, this spending is clearly worth it.

There are other variables you should look at as well, including the difference between new visitors and repeat visitors and the value of each individual conversion. But these guidelines should lead you to a fairly accurate estimate when you look to calculate SEO ROI.

How to Maximize the ROI of Your SEO Campaign

Now that we know how to calculate ROI, what steps can we take to maximize it for your SEO campaign? These are some of the best ways to get the greatest possible return out of your SEO investment:

• Choose the right partners. For starters, you need to work with the right partners, since some SEO partners are going to be strictly more valuable than others. Consider the difference between spending $10,000 a month with an agency that only does the bare minimum and spending $5,000 a month with an agency that consistently exceeds expectations; you'll likely see a much more impressive return with the latter. There are many options to practice SEO, such as working with an SEO agency, hiring freelancers, building an internal team, or even just doing the work yourself. Do your due diligence so you can vet all these options properly and choose the best fit for your brand.
• Plan strategically. If your SEO strategy is going to work, it needs to be strategic. No more throwing darts at a dartboard blindfolded; you need to be precisely focused in all your SEO efforts. Take the time to practice keyword research, plan your spending carefully, and keep your finger on the pulse of your campaign so you can make meaningful changes as necessary.
• Don’t beat your competitors with brute force. It's tempting to try and overwhelm your competitors with brute force. If one of your most annoying rivals is currently ranked one for a lucrative keyword phrase, you might try to outspend them so you can displace them. There are times when this strategy can work in your favor, but it's usually better to avoid beating your competitors with brute force alone. The brute force approach is expensive and unreliable, so you're usually better off finding alternative angles of attack – like targeting a less common keyword phrase or a different demographic.
• Spend wisely. Every dollar you spend on SEO should be objectively scrutinized. Inexperienced SEO practitioners often fall into the trap of simply “doing more,” such as developing more content, building more links, and tweaking pages indiscriminately. Make sure that each new investment or asset has some sort of functional role in helping you achieve your SEO ROI goals.
• Produce evergreen content. Content is a big part of SEO ROI measurement, so it's only natural that it represents a big portion of your spending. You can make this expenditure go much further if you consistently produce evergreen content – in other words, content with the potential to be relevant forever. Writing up an article about the latest news story or a fleeting fad might be good for generating short-term attention, but it's not going to be as valuable a long-term asset as its evergreen counterparts.
• Be consistent. Marketers see better SEO results when they practice their strategy with consistency. That means sticking to a schedule, adhering to your initial strategy and vision for the campaign, and working with the same experts (provided they’re reliable). Consistency is also going to make it easier to conduct root cause analyses whenever you notice an uptick or downturn in your SEO ROI; if your strategy starts to look more or less effective, you can attribute the change to only the variables that you've recently altered.
• Utilize complementary strategies. One of the greatest strengths of SEO is that it has the potential to elevate your other marketing strategies, from content marketing to social media advertising. If you utilize these complementary strategies well, you can maximize the value of each new asset you create and cultivate a much more loyal, valuable audience.
• Optimize for valuable conversions. SEO ROI is naturally higher when the value of each organic visitor is higher. You can therefore greatly increase your SEO ROI by optimizing your website for highly valuable conversions; increase both conversion value and conversion rate for best results.

Is SEO Worth It? Can you Really Measure SEO ROI? 

It's hard to give a blanket statement about whether SEO is worth or if your SEO ROI is truly positive, since there are so many different variables to consider and so many different scenarios that could unfold.

More difficult still is even understanding how to properly measure SEO ROI in the first place! It's nebulous and much more difficult to track, especially given the flux and volatility of SEO over the last several years.

However, the average business benefits enormously from SEO, seeing a positive SEO ROI that more than justifies the initial investment and SEO efforts. If you're curious to learn more about how SEO could benefit your business, or if you're ready to start a full campaign, contact us for a free consultation today!