Different ways to calculate SEO ROI for your business

In our line of work, you tend to come across a wide variety of clients, depending on a number of factors. Whether we’re discussing individual business owners or separate niches or different parts of the world – every project is unique. And as a professional digital marketing agency in NYC, diversity is nothing unusual to witness. We deal with it on a daily basis. And one of the constant challenges that marketers face is having to present clients with a transparent and simple way to confirm that their investments are paying off. Otherwise, things escalate and clients start to doubt the effort that goes into their SEO, which can result in them walking out. In this article, we discuss the different ways to calculate SEO ROI for your business.

The basic formula for calculating SEO ROI for your business

ROI calculation illustration
This is the core formula to use when you want to calculate SEO ROI for your business

Starting with the fundamental approach, we get right into the universal formula for getting exact data on your SEO ROI. And as a method universally accepted by professional SEO agencies, it is a very simple 4-step process:

Step #1: Calculate your SEO investments

The first part of the formula requires you to come up with the overall value of your investments into the SEO strategy for your business. However, there are different factors to take into consideration here, such as:

  • In-house SEO resources. If you have an in-house SEO team instead of an SEO agency, the math is easy as long as you have a team committed only to SEO efforts. However, if you have different roles (developers, designers, copywriters, outreach specialists, etc.) that work on multiple projects/campaigns, it becomes more difficult. You need to account for the number of hours spent on a particular activity. And that can be easy if your team uses a tracker that can lay out their activities clearly.
  • Agency resources. Working with an SEO agency simplifies the entire process. You have a clear pricing plan that you can easily put down as your overall investment. You simply determine the time frame and add up the monthly fee(s) and there you have it.

Another important factor to include in your assessment is the tools that you use. A strong SEO application requires the right set of tools to back it up. So, if you want to calculate SEO ROI for your business precisely, you need to consider the costs of the different software that your in-house team or you are using to track it all.

Once you combine the operational costs of the team with the costs of the tools that you use, you will have an exact figure to put into your final formula.

Step #2: Set up conversion tracking

Now that you have an idea of your SEO investments, it’s time to move on to the results of those efforts – ROI. And the first step to calculating ROI from SEO is to set up conversion tracking in Google Analytics. This will give you an insight into all the conversions on your website that create profit.

Step #3: Track and analyze your conversions

The setup varies on whether you are operating an e-commerce business or a lead-based business:

  • E-commerce stores use tracking to pull data from their online transactions to measure their overall revenue.
  • Lead-based businesses (service providers) need to set up conversion goals and assign average values to those goals in order to calculate overall revenue.

Methods for calculating the value of conversions vary from business to business. However, marketing analytics software is your foundation for pulling data here. If you have the right knowledge, you can pull out all the data you need from that one tool.

Step #4: Calculate your SEO ROI

Once you have the cost of investment and the value of your conversions, the formula is simple to put together:

  • (VALUE OF CONVERSION – COST OF INVESTMENT) / COST OF INVESTMENT

Put into an actual example, let’s say that your SEO activities on a monthly basis amount to $100.000. And let’s say that your cost of investment on a monthly basis runs up a bill of $20.000. Now, let’s put that into our formula: ($100,000 – $20,000) / $20,000 = 4.

End line – for every dollar you invest in your SEO, you see a return of $4. Therefore, the ROI from SEO here would be 400% (4 x 100 to get a percentage). And there you have it – one of the most well-established ways to calculate SEO ROI for your business. Now that we’ve got that sorted, let’s take a look at some of the other methods that people use to calculate ROI.

10 different ways to calculate SEO ROI for your business

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There are, of course, other approaches that a business can take to learn more about their ROI from SEO.

1. Sales

There are a lot of business owners out there that are skeptical when it comes to SEO because they aren’t seeing actual revenue from it. And the usual reasoning behind this attitude is that there are simply not enough sales to go with the increased organic traffic. However, this is a very grey area because it can be hard to determine where the obligations of SEO efforts end and where the role of your sales team comes into play.

One thing is certain – if you have a constant increase in organic traffic but a stagnant number of leads and conversions, something is off. And this is where sales efforts definitely play a role in the ways to calculate SEO ROI for your business. Once again, we go back to calculating your value of conversion. In this case, you would simply look at the sales where organic search delivered the last click or the actual sale.

2. Assisted conversions

So, if you look at the direct sales from organic visits, what happens to those that only arrived on the website, only to be converted through our sales efforts? Well, you can count those as assisted conversions and put them in a category of their own. You can look at the percentage of sales generated from end customers that arrived at your website organically.

3. Leads

Another one of your more obvious ways to calculate SEO ROI for your business is thought the overall number of organic leads and/or sales in comparison to past results and statistics. People are often too eager to put up rankings and traffic volume to showcase SEO success, but we’ve already explained how this does not necessarily lead to actual revenue.

4. Organic traffic

The train of thought here is that with an increase in your organic traffic, your conversions and/or sales should follow that trend. That being said, the process here is simple:

  1. Implement SEO
  2. Measure increases in organic traffic
  3. Use conversion optimization to generate leads and sales
  4. Measure the overall revenue that comes from these leads and sales, whether they choose to convert today or a month from now (more common for B2B companies).

The important task here is to establish whether the growth of your organic traffic correlated to the number of qualified leads that you convert.

5. Percentage of qualified leads from organic traffic

As we’ve just explained, an increase in organic traffic demands an increase in conversions to confirm that your SEO is performing well. However, not all organic traffic can be held to the same standards. If you want to get a more precise calculation of ROI from SEO for your business, you need to focus on qualified organic traffic. You can’t count organic traffic from keywords that have nothing to do with your SEO strategy or niche.

6. SEO forecast

While some marketers look at actual results, you have those that dabble in past predictions. What does this mean? Well, rather than simply looking at results from only your SEO efforts in the past three months, you look at the other scenario – no SEO. You use the growth and revenue data before implementing SEO to predict what the results would have been. You then compare those imaginary results with the ones that you have from implementing SEO. And you get another interesting way to put a number on your decision to opt for SEO.

7. Comparisons with other channels

Sometimes, you can gain a better idea of the revenue your SEO generates by comparing it with other digital marketing channels. Whether you are investing in paid advertising or SEO, social media or email marketing, you can compare it all with the right KPIs. Just consider the average cost of a single conversion throughout a specific time frame.

8. Form submissions

The thing to remember with SEO is that every piece of content counts and can contribute to the ROI for your business. And so, you need to take into consideration the landing pages and blogs that get visitors to fill out forms and become leads. Certain pages and blog posts drive more traffic, which results in more quote/demo or consultation requests. Based on the result of those contacts, you can take the overall revenue there and run it with the SEO investments you made.

9. Keyword mapping

If you are looking for out-of-the-box ways to calculate SEO ROI for your business, then mapping keywords by search volume is one of the ways to go about it. Certain keywords that are more competitive and popular bring higher traffic value for your company. And that results in more qualified leads that convert into profitable sales opportunities.

This is a prediction-based calculation, where you make estimations using benchmark click-through rates (CTRs) to calculate traffic projections. You then use an average conversion value and the overall conversion rate to forecast an ROI for a specific SEO campaign.

10. Average time on page

This would count as one of the more far-fetched methods for measuring SEO ROI for your business. Yes, when visitors spend longer amounts of time on certain pages, it sends a signal to Google that those pages have value to people. And it leads to a better user experience, which ultimately brings in more traffic and conversions. However, the entire concept focuses on a lot of long-term predictions. But it is definitely a way for a company to investigate the overall profitability of their SEO efforts, albeit they might have to wait for a while to measure it.

Start looking into your SEO ROI today or let us do it for you

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The priority of any business owner is to confirm that they are making smart investments. And an important part of that is being able to see the results of those decisions. These different ways to calculate SEO ROI for your business should give you everything you need to gain a better insight. And if you’re still not sure, you can always consult directly with Digital Dot NYC. Often, the opinion of a third-party independent agency can offer the most objective and realistic presentation. Contact our team today to schedule a website analysis and consultation.

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