Content
How to Predict the Return on Investment from SEO?
February 22, 2023
12 min
Return on investment (ROI) is a performance indicator that defines your SEO success. The global question for every business owner here is whether it is worth it.
Unfortunately, most SEO endeavors are unsuccessful because most companies fail to run the marathon consistently for over six months.
Your profitability from SEO efforts will depend on how well you are aware of feasible marketing tactics. And there are too many myths around that need further explanation.
While the issue is all about money, always take SEO as a long-term investment of your time, effort, and expenses.
Even though so many businesses seriously invest in SEO marketing services, ROI always depends on in-house circumstances.
Fortunately, the available tools and baseline calculations we suggest here will help you shape your SEO strategy.
Simply as that, you’ll have a positive return on investment if the revenue generated by your SEO campaign is higher than its cost.
As you may guess, the scope of SEO is above keywords and tagging.
Search optimization entails a holistic effort to endure and multiple metrics to follow.
You can make ROI from SEO in various possible ways.
While content generation is within your ultimate control, do your utmost to make users interact with the pages on your website.
Regular content changes, updates, revisions, and improvements all add to your enhanced on-page SEO effort.
As a result, you advance the quality of user experience, while your target customers better resonate with the products and services you offer.
On the contrary, off-page SEO is beyond your control. For instance, to gain backlinks, you have to earn external references on the web so that Google ranks your pages high.
You will gain authoritative backlinks only by generating quality content that will help you build trust in Google and engage users.
While it is hardly possible to make it all on your own, delegate the off-page SEO effort to digital marketing experts to save you time and money.
The same is true about a technical SEO effort. You should ensure sound website performance to expect ROI.
Take SEO as a core traffic generator for your website.
The better your content engages with user needs, the more Google will favor your brand visibility.
The efficiency of your SEO performance is all about the credibility and authority of your brand name.
Your number one priority is to generate traffic that will further drive conversions.
In other words, SEO helps you turn website visitors into the leads, the end customers of your products and services.
The better your website ranks on SERPs, the more people will visit your pages.
While traffic generation is essential, there’s much more to it.
The bottom line of your business performance will solely depend on how well you convert visitors into leads on your landing pages.
The ROI for search engine optimization is about engagement.
This is all about your site’s capacity to engage more visitors and convert them into leads.
That’s all about your customer’s journey, so emphasize user experience.
Still, engagements are only about user activity on your website, while conversions signal actual purchases of your goods and/or services.
While SEO is about a site’s visibility on SERPs, it is essential to emphasize organic search.
Visibility encompasses a vast array of tech issues that enable a sound performance of your site in organic search results.
This is to say that along with content, SEO traffic directly depends on your site’s visibility.
Plus, you should watch for regular updates of Google algorithms to expect ROI from your SEO endeavor.
Staying ahead of search engine optimization is what we offer at Promodo, so you are not alone!
Essentially, the SEO return on investment comes in two ways: anticipated ROI and actual ROI.
Estimating an average ROI on SEO is about projecting SEO ROI to estimate the cost and return from SEO efforts.
Actual ROI is the generated return from SEO saved from an initial investment cost.
Companies report the net return once they deduct all the expenses spent in the SEO pursuit over an agreed-upon period.
The comparison of the anticipated and actual ROI will determine how SEO benefited your online presence.
On this basis, you will decide how much you are ready to re-invest in your future SEO performance.
While the SEO numbers game assumes that it is easy to calculate the return on investment, it is not that easy to measure the ‘return’ part. The trick is in how to measure your SEO.
In SEO ROI statistics, much will depend on the initial goals of your campaign.
Considering various SEO metrics and KPIs, every individual case is unique.
Much depends on business SEO capacity, brand awareness, online presence, user experience, content, and competition across the niche.
Further, our digital marketing experience shows that few small-sized businesses are ready to permanently invest in at least an initial one-year period crucial for SEO promotion.
A revenue-driven SEO effort aimed at conversions growth entails key-value indicators to ensure accurate calculations:
SEO strategically aims at SERPs visibility of your site. The more visible your pages are on SERPs, the more traffic you’ll get.
Mind that traffic alone will not generate ROI. Nonetheless, it is a stepping stone toward conversions from your website.
SEO provides a splendid opportunity to target your audiences organically and win competitive advantages over one-time paid ads.
While many campaigns pursue ‘the more, the better,’ SEO success is in a qualitative reach.
Website optimization for search is different from traffic optimization.
Your strategic focus is to target quality traffic by crafting unique content to engage wide audiences as your potential customers.
The optimization is not merely what users spot on SERPs. SEO is about a holistic online experience, including the ease of a user journey throughout your website.
A customer’s journey through multiple touchpoints is part of a new normal online. Omnichannel marketing is what is beyond a customer’s rational decision-making.
Final purchases from your site will depend on the variety of customized options. The way target audiences interact with your brand is decisive here.
An ultimate advantage of SEO is its ability to keep users on your site. More than that, smart SEO strategies hold the potential to drive conversions.
This is different from one-time PPC campaigns that bring customers to your site through paid clicks. Still, they do not warrant actual conversions.
This means that a long-term SEO strategy saves money.
With an exclusive focus on revenue generation, SEO saves investments.
The art of SEO is about agile user experience and site visibility.
Along with informative on-site content, keyword-rich customized sales descriptions are a must to convert visitors into leads.
Before spending a cent on SEO, it is crucial to know user intentions, designate target audiences, and process keywords.
Doing the upfront work throughout your pages will save your future SEO investment. With that, you will get far less dependent on the need to implement PPC paid ads.
Instead, you will strategically focus on the keyword visibility that has earned organic presence almost to the point of the cost-per-click, CPC.
Also, benefit from SEO as the surest way to retain people on your site. Keeping users on your pages will depend on how well you can interact with and engage your target audiences.
While working with website visibility, check whether your website is capable of retaining customers. This is because it is much easier to retain the existing audiences than attract new ones.
By increasing customer retention, you are sure to surge sales up to 92%, while this is not the case with ‘cold’ traffic: the audiences that visit your website for the first time.
ROI from SEO is foremost about strategic planning.
On a corporate level, SEO requires in-depth research, analysis, financial audits, and reporting of outcomes.
This is when you research your target audience, user experience with similar products or services, and broader market opportunities.
Next, analyze your closest competitors, including actionable insights on how you can beat them organically.
Quality content, keyword research, and website visibility will all add up to the ranking of your pages.
SEO ROI is also about qualitative and quantitative deliverables within your content plan. Ensure that the content on your pages is integral to the strategic business goals you pursue.
Technical SEO is about the engagement potential of your site through content, page speed, linking, visibility, and indexing. These factors are all essential to the quality of your online presence.
Unlike PPC, SEO is not a one-off solution. The process is about continued optimization, permanent analysis, and regular measurements.
To drive revenue from SEO, our marketers test conversion rate optimization by analyzing the effectiveness of paid PPC and organic SEO approaches.
While your SEO results will depend on the quality of the optimization process, it is essential that you have an actively performing website, and know the potential of your traffic as well as the average rate you’ve projected.
There are simply no universal means to predict SEO ROI, especially during the first few months of your SEO campaign.
Worse than that, your SEO strategy will most likely show negative ROI.
While SEO is a solid long-term approach, do not exaggerate your promotional capacity.
Always, consult digital marketing experts before your first investment.
The best thing you can do yourself is to permanently generate quality content on your pages. This will signal to Google that you are a reliable player. Eventually, the search engine will advance your pages on SERPs.
This is to say that without a holistic marketing strategy, SEO is much of a ‘give or take’ tactic.
People-first is always a win-win strategy to generate ROI from SEO.
Forecasting is another piece in SEO endeavors. Without 100% accuracy, forecasting is important to critically measure potential outcomes from your SEO efforts.
In many cases, financial and physical investments do not bring in the desired results.
For instance, a one-page site that serves as a landing page is unlikely to drive huge inbound traffic. This means you are to expand your presence through more pages and content to engage more audiences.
A great starting point here is to set a realistic expectation of how many users you can potentially attract next month. The more down-to-earth you are with numbers, the more SEO ROI you’ll generate.
Start with the proper comprehension of your market and its size. The measurement will help you estimate the search potential and the number of top keywords you will need.
Bet on your top products or services and make a list of 20 keywords, or even better key phrases, people use to find similar products or services online.
Insert your list into the Keyword Planner. Then test the potential of each keyword in the Average Monthly Search Volume.
Sure, this will serve you as a preliminary estimate by Google.
Still, with this initial SEO ROI forecast in mind, you will niche down your best products and services. The analysis will show where you stand within your industry against the competitors.
While you will aim all your SEO campaigns at increased website traffic, it is vital to analyze organic keyword rankings.
SERPs.com is a reliable tool to analyze your keywords for both desktop and mobile rankings.
Combine all the keywords into a Google spreadsheet to track your organic ranking.
Further, the tools like MozBar will help you estimate the worth of your keywords in terms of competition.
Rather than uselessly targeting page 1 on Google, focus on less competitive keywords and phrases.
Indicate your Domain Authority (DA) to predict how your website will rank on Google.
Use the researched keywords to compare your DA to the competitors. Analyze competitors with DAs that are less than 10 points above you.
If you still spot keyword difficulty, it means that the keywords you have selected are far too competitive.
Once you’ve spent on an SEO campaign $2,000 and generated $10,000, you hit 400% in revenues.
This means that every dollar you invested in SEO turned into $4 of ROI.
While the ROI formula is pretty simple, there is much more to that.
You can use this formula to calculate the ROI of your SEO campaign across any period you choose. So long as you know the costs and returns.
To come up with the most precise numbers, benefit from the SEO ROI calculator to estimate the organic traffic you get a month.
Your task is to use Google Analytics to determine your average organic order value.
Then, multiply the monthly search volume on your website by the % of CTR of the ranking position you are targeting.
The number will show how many people will click on your website per 1000 monthly searches.
Don’t overestimate your capacity to rank high on Google SERPs.
Depending on your SERPs position, much will depend on a particular keyword ranking and how much it will take you to invest in it.
Therefore, refer to Google Analytics to obtain more precise data.
With 1000 searches a month X 25.4% (click-through rate CTR position) = 254 new users on your website.
A few words about organic CTR here. It is an indirect Google ranking factor. This KPI predetermines your page capacity to drive traffic.
Tracking CTR is essential on the page and the query level. With that, you will know how many people clicked on your page after Google has ranked it on the SERPs.
Organic CTR is also a strategic indicator as it shows the relevance of your title tag and meta description to user queries. You can measure CTR only through the context of organic searches.
To get an estimated monthly revenue, you should multiply the traffic you get a month by measuring:
Lead conversion rate entails the number of leads you have turned into end customers.
Once you pursue a lead generation SEO strategy, an average close rate will indicate the number of leads you transform into end customers.
According to our estimates, an average conversion rate equals 2% for business e-commerce sites. In the case of lead generation, you can expect 5%.
With 254 new visitors to your website X 2% (in the case of e-commerce strategy) = 5.08 conversions.
Once the average organic value of your order is $50, you will generate $250 from 5 conversions.
To calculate the value of each event, multiply your customer lifetime value by the lead conversion rate.
Knowing your close rate and a customer’s lifetime value will let you determine the final ROI if you count on leads as a core source of conversions.
With your customer’s lifetime value of $10,000 and a close rate of 7,5%, you may expect $1,500.
This way, you will know the expected customer spending during the whole period of your interaction.
While companies rely on organic search to drive up to 55% of traffic, proper comprehension of the value driven by SEO is vital.
Positive ROI comes as an essential measure of profitability.
You should always account for the total cost of SEO as an indispensable part of your investment.
A net ROI will deduct the wage of SEO experts (your in-house or outsourced human resources). You should also deduct the cost of paid SEO tools.
Your major task throughout the SEO journey is to track and measure actual conversions in terms of value.
Again Google Analytics is right at hand to calculate your organic revenue.
But the type of conversions you track and the value you assign them are different for every business.
While e-commerce players rely on sales data to track conversions, lead generation companies should track actions taken by users on their websites.
If you want to track organic conversions from e-commerce transactions, apply Google Tag Manager to add e-commerce events to your website.
You’ll spot the conversion value for each transaction in Insights to see the total revenue generated during a specific period.
To track the value of lead-generated conversions, we suggest creating an event for all your conversions in Google Analytics.
Having generated ROI from your first SEO campaign, do not stop there.
Keep on making traffic predictions to allocate resources and enhance your future SEO promotions.
SEO projections will help you sense the core areas of impact. The calculation of projections for at least a quarter will help you prioritize top revenue-driving products or services.
Take SEO as a unique marketing opportunity and pursue it continuously to gain ROI.
Unlike revenue-driven direct ads assumed by PPC, SEO strategy will help you drive results permanently. So be sure to take ample time for your SEO campaigns if you are serious about return on investment.
In this vein, Promodo experts suggest calculating annual projections to safeguard a conservative forecast.
Getting an average position value from Google Search Console API will help you spot unbranded keywords. On this feasible background, you will boost organic search throughout your site. Meanwhile, be sure to exclude branded keywords from your organic SEO campaigns.
The annual keyword volume beyond the top 10 positions will help you spot the organic search conversion rate and the average order value.
Then multiply the organic conversion rate by the click-through rate (CTR) to estimate your potential traffic.
Additionally, you’ll spot conversions by multiplying the organic conversion rate by the traffic value.
Once you need to obtain a potential revenue from a single order, multiply its average value by the conversion value you invest in.
More to that, you may also project each keyword value per CTR.
While your projections may differ from the actual results achieved by your SEO campaigns, the return on investment is not your ultimate target. This is to say that many businesses perceive ROI outcomes merely from a short-term perspective.
As part of strategic business planning, we suggest focusing on positive ROI expectations for the year ahead. SEO is not about quick wins – it is your long-run endeavor you constantly shape towards maximum value.
Key SEO performance indicators serve as essential metrics you will use to measure the effectiveness of your efforts. The listed KPIs will also help you set your expectations far more realistically
Our baseline advice is to target organic conversions that will help you generate leads and sales. Be sure to set up measurable conversion benchmarks as an integral part of your SEO campaign.
Beyond tracking the number of conversions, our experts recommend tracking the percentage of organic traffic. Benefit from Google Analytics 4 to access the most suitable conversion tracking options.
Another essential KPI is Customer Lifetime Value (CLV). This one serves as a predictive metric through which you can project a total profit from a single customer.
This measure is vital while it is showing you the long-term value of every visitor of your site you want to convert into an end customer.
Your SEO ROI estimates will depend on CLV.
You will also advance SEO resource allocation, make informed decisions, and optimize your campaigns by using CLV to split your customers into tiers.
Further comes what is known as Cost Per Acquisition (CPA), also referred to as Cost Per Order (CPO). This is how you get to know about the cost of every user you convert on your site.
CPA will help you track the cost of new customers you get from your pages.
High CPA signals poor content, irrelevant keywords, and other on-site problems that disable actual conversions.
To obtain CPA, simply divide your total SEO amount by conversions.
Further, use Google Search Console to drive wider organic visibility and reach more potential customers.
There is a vast range of SERP features that predetermine the search visibility of your pages. Your brand reach depends on the quality of your site’s visibility in organic search.
Adding top keywords to the available Position Tracking tools online will help you track search visibility and compare your standing to the closest rivals.
Along with visibility, organic impressions are showing how much progress you’ve made in organic sessions.
While impressions lead to traffic growth on your site, traffic generates conversions. That’s where your SEO strategy is closest to ROI.
At Promodo, we use semantic search to achieve keyword rankings and drive more traffic to your site.
Set up Google Business Profile to leverage your online presence. It is a must-do requirement if you are a local business.
The platform empowers your brand’s recognition with increased searches, views, and clicks.
Through backlinks, users come to your pages from other websites. These hyperlinks are sort of Google’s recommendations that highlight your site’s expertise, authoritativeness, and trustworthiness (E-A-T).
While backlinks are among core Google’s ranking indicators, it is crucial to critically measure the quality of your link profile compared to your closest competitors.
Rely on the available backlink analytics and audit tools to gain comparative advantages with more backlinks and referring domains.
As you can see, measuring ROI for your SEO campaigns is not summertime. While SEO requires a straightforward investment, it is hard to tell when you will see the first returns coming.
Take six months as your baseline for ROI expectations. Allow a fair amount of time for your site to drive traffic and make the first conversions.
Say, you invested $600 into your SEO campaign and earned $800 altogether. This means that your net profit makes $200.
To calculate ROI, you have to divide $200 (your net profit) by $600 = 33.3%.
Regular ROI calculations will make the tracking process of your SEO way easier.
Not to turn into a pragmatic ROI calculator, consider user engagement on your pages. It is vital to account for:
Prioritize average engagement time by making people spend more time on your site. Higher engagement subsequently leads to higher conversions. Also, measure the average duration of user sessions on your site.
Finally, do extra work to match product-or-service-based keywords with the search intent shown by your target audience.
Content Marketing Manager at Promodo
Taras has 16 years of hands-on copywriting experience overseas with 3000+ unique copies.
Accredited with Certificate of Proficiency in English (C2 level) by Cambridge University. Studied at Writing Launch Academy (United States) and owns an Academic Writing Certificate from Oregon University. Author of 12 dictionaries with Apriori Publishers.
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