The Role of ROI in SEO

This article was first published on December 7th, 2020, and was last updated November 2023.

Having a website for a business does not automatically mean the business will come flowing in. Search Engine Optimization, or SEO, takes a lot of time and effort to see results on your website fully. As hard as it is to wait to see the best results, we promise it’s worth it in the long run.

SEO is known to help improve businesses’ online presence and visibility and attract new customers. It’s what helps give search engines a way to rank websites. Having a higher ranking gives your website more of an opportunity to gain customers by viewing your products and services. This, in return, can help your business’ ROI and meet your needs.

While your business and your competitors want that higher ranking as soon as possible, it takes time to gain a higher ranking. SEO work has multiple steps and parts that need to work together to become successful for users. This article will dive into what your business should look for when utilizing successful ROI in SEO.

What is the ROI of SEO?

SEO ROI is the return on your SEO investment. You spend money on SEO tools, staff, etc. to succeed at search engine optimization. If done right, your SEO efforts will lead to leads and sales. The ROI of SEO is the money you have left from sales after you deduct your SEO costs.

Do You Need to Measure SEO ROI?

Yes, measuring the return on investment (ROI) for search engine optimization (SEO) efforts is important for several reasons.

First, it helps to determine the effectiveness of your SEO strategy. As well as whether or not it is worth the investment cost of time and resources. Second, it provides valuable insights into which SEO tactics are working and which ones need to be adjusted or removed.

Finally, measuring SEO ROI helps to justify SEO spending to stakeholders. As well as secure the budget needed to continue and expand SEO efforts.

It is difficult to provide a specific ROI percentage for SEO. This is because it can vary widely depending on factors such as the industry, competition, and the specific SEO tactics used. However, a good ROI for SEO is generally considered at least 5-10 times the investment made.

For example, if you spend $10,000 on SEO efforts, a good SEO ROI would be to generate at least $50,000 to $100,000 in revenue from those efforts. It’s important to keep in mind that SEO is a long-term investment. These organic search results may not be immediately visible but can provide a significant return over time with the right strategy and tactics.

How to Measure the ROI of SEO

SEO ROI is the return on your SEO investment divided by the cost of your SEO investment. You can use this SEO ROI formula described by Investopedia.

SEO ROI = (SEO Revenue – Cost of SEO efforts) / Cost of SEO efforts * 100

You calculate SEO ROI using the actual gross or net revenue gained from your SEO campaign. It’s important to use the same ROI calculation methods (gross or net revenue) for SEO as you use it for PPC and other operational ROI reporting as well. This helps your comparisons be more accurate across all marketing channels.

You can also estimate your potential SEO ROI during your SEO planning using an estimated revenue amount you hope to gain. The process of calculating your ROI SEO is different in this case. We’ll describe both scenarios below.

Again, here is the SEO ROI formula. SEO ROI = (SEO Revenue – Cost of SEO efforts) / Cost of SEO efforts * 100. But, how do we calculate those SEO metrics?

SEO Revenue
Cost of SEO efforts

Let’s dive into each.

Calculating Your SEO Revenue

The first metric in our SEO ROI formula is SEO revenue. The steps you take to measure your SEO revenue vary depending on your business model and conversion types. As well as whether or not sales occur online or offline.

Business models range widely, but here are the most common ones:

Ecommerce: Ecommerce sites like Macy’s that sell products online.
Advertising: Advertising revenue-based sites, such as Forbes, generate revenue from ads placed on articles, videos, etc.
Services: You might sell digital marketing services, like us, Manta. Lawyers, doctors, etc. all fall into this category. Typically, there’s no online checkout cart for these services.
Offline Sales: Many tangible products are not sold on the web. Such as a home, cars, or even household items from stores like HomeGoods that don’t have ecommerce.
Affiliates: Affiliate sites collect money when their website visitors click links that go to other sites. From there, those visitors buy from the 3rd party site.

In addition, conversion types range from direct revenue from online purchases to capturing an email or setting an appointment. Each type of call-to-action (CTA), or lead or conversion type, ties to a possible future sales conversion with a unique average order value (AOV). Here are a few examples.

Online Lead Forms: Service firms like lawyers and plumbers often have website forms users fill out. Typically in exchange for a call, appointment, more information, or a variety of other things. These forms may be pop-ups after a button click. Or it could be form fields embedded on any page (including the contact us page).
Email Capture: You’ve seen call-to-actions (CTAs) inviting users to sign up for email newsletters, promotions, etc.
Calling Your Company: You can use Google’s Website Call Conversions free product to track phone calls users make from each page of your website.
Scheduling a Sales Meeting: Many business owners use apps like Calendly to allow users to schedule appointments directly from their website and emails.
Joining a Webinar: When users join a webinar it increases the chance they’ll buy your product or service.
Signing Up for a Free Trial: Don’t forget to monetize the value SEO plays in getting users to sign up for a free trial. Often companies assign the value of paid conversion rates to another channel. (Which is a missed opportunity for SEO in cases where SEO generated the lead).
Converting from Free to Paid: When a user converts from free to paid, the proper channel that generated the original lead should get credit for the sale.
Upsells: Upsells and cross-sells are when existing users buy more from you. Marketers should set up attribution tracking to properly assign these sales to the right channels.
Clicking a CTA Button: Each item above is an example of a CTA. Make sure to include all possible actions that lead to sales in your SEO conversion tracking as well as a good click through rate.

It’s important for your business to understand the different types of leads that SEO can generate for your business. When you do this, the more your business can learn to calculate the right amount for SEO revenue.

Calculating Your SEO Operational Costs

Calculating SEO operational costs involves expenses related to SEO optimizations for a website. Some common items to consider include:

- Salaries and Wages of SEO Staff or Consultants: This includes two factors. One being your internal dedicated and external consulting SEO staff. The second being a percentage of other internal staff who contribute to SEO including your marketing manager.
- Cost of SEO Software and Tools: These include tools such as Semrush, Moz, Ahrefs, image optimizers, grammar editors, AI tools like Jasper, APIs, reporting tools like BigQuery, etc.

Cost of Paid Search Ads: (if there are any costs).
Cost of Content Creation and Optimization: You may have in-house writers and should consider their salaries. Or you may use freelancers or crowd content sites.
Cost of Link Building Activities: Again, this could be done by internal or external staff.
Cost of Website Development and Design and Technical SEO (if any): Any time a developer fixes something on the site (such as 5xx errors or adds schema) it costs money for their salaries.
Cost of Hosting and Domain Registration: These costs can be shared with the entire marketing department. SEO only has an allocation of the total expense.
Cost of Analytics and Reporting Tools: Examples are BigQuery, consultants that build reports via APIs, etc.

These are just some examples of the items that may be included in calculating SEO operational costs. The specific items will depend on the nature of the website and the specific SEO strategies employed.

ROI of SEO Goals and Expectations

The best way for businesses to measure their SEO success is by managing and setting reasonable and realistic goals and expectations. What goals do you want to set or achieve through SEO? Do you want your business to increase organic traffic? Rank higher? Or do you want to increase your store’s attendance?

SEO has many layers to it, and having an idea or direction helps improve your SEO.

SEO should be the core of your business’s digital marketing strategy. When your business invests in SEO, ROI won’t be as immediate as most businesses would like it to be. SEO is a process that builds over time to improve your website’s online visibility.

Your investment in SEO will end up bringing in new customers and revenue to help grow your business. SEO even saves your business money rather than investing money into ads that are active for a short amount of time.

When individuals search for something they need, most of the time they end up searching on Google. When they search for something, most individuals don’t search for a specific product or service. They use keywords that can broaden their view to a variety of options. When your business shows up at the top of rankings, search engines, and customers know they can trust your website as credible and trustworthy information. SEO helps Google recognize a website as a valuable answer and moves it higher in the rankings.

Oftentimes, it can take around 6 months for a website to reach the first page of search rankings. When you rank on the first page, your site will see more customers. Customers then move to filling out forms, calling about your services, visiting your business in person, or learning more about what you can offer them.

This traffic all results in more customers and revenue for your business to grow. SEO rankings can be the difference between your business and your competitors. Simply put, good SEO yields results for a business with more leads, customers, and growth.

Key Factors

Besides more traffic and business in the door, there are certain key things to stay on the lookout to make sure you’re getting the results you expect from an SEO campaign.

Analytics

Looking into your Google analytics helps to better understand your audience and how well your website performs. This is one of the best ways to see progress in real time and make sure you’re getting the return on investment you’re looking for.

Keyword Rankings

Keyword rankings are one of the most pivotal things you want to focus on within your SEO strategy. These are the words or phrases individuals type into their search engine to answer their questions. Keywords help to gain visibility and traffic to your website.

Local Map Rankings & Impressions

Local SEO helps your business become discovered within your community. Features such as the maps action of a results page is one of the most popular local SEO features. This feature alone can help your business be discovered by potential customers.

Audiences on Multiple Platforms

Good SEO also helps your website show up in multiple places like business listings and blogs. This helps boost your site’s authority with Google because it means its algorithm deems the website as more reputable, and will rank it higher.

Showing ROI means you’re thinking like a business owner and not a marketer. Business owners want to make sure every dollar they spend makes a difference, and that it’s going to help the business in the long run. The success of SEO can be hard to measure because it’s measured in metrics. But the ROI of SEO means you’ll see more leads, more calls, and more revenue.

If you’re looking to improve your SEO consider the Boostability white label SEO partner program. We help provide SEO services for our partners with just a couple clients to those with several thousand. We can help you add one of these products to your lineup.