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How to Actually Quantify the ROI of Your SEO Campaigns

September 15, 2021

There are two ways that site owners have traditionally quantified the ROI of SEO traffic.

First, the price they would have paid to buy that traffic in Google Ads. Second, the actual revenues generated from those organic clicks. 

Unfortunately, both of these strategies require really high revenues and squeaky clean analytics – something many smaller or newer websites with less resources don’t have. 

And for B2Bs who don’t generate revenue at the time their organic traffic converts, it is even harder to track which keyword rankings, landing pages, or content marketing items drove those users into the conversion funnel and generated the most revenue.

How to measure the ROI of SEO 

So is there a way to actually measure the ROI of SEO

Yes. By pairing comprehensive, daily keyword tracking with stronger conversion tracking and closed-loop analytics, you can get a more accurate picture of the true return on your organic SEO investment. 

ROI of SEO vs. ROI of PPC

Digital marketers have traditionally used CPC as a measurement of what an organic click is really worth. This is because advertisers are actively paying that price to get clicks for those keyword searches in paid media campaigns. 

But with organic SEO, you get those same clicks without paying. For example, the below website is ranking in the number one position for a keyword that generates about 1,155 clicks per month and has a CPC of $25.

This business would have to pay almost $29,000 to get the same amount of clicks in a Google Ads campaign. But because they are ranking organically for this keyword, they are getting those clicks at a much lower cost. If they maintain their top position, they will also get those clicks to perpetuity.

So if you were to factor in CPC costs for every keyword your website ranks for right now, then the economic value of your organic clicks would likely be pretty significant.

With competitive keywords, the CPC metric used in most SEO software is an average bid CPC coming from Google’s tools. But many advertisers, especially those with the first Adwords ad position, often pay even more. That means most brands are underestimating the true economic value of their SEO traffic.

But the reality is very few businesses are willing to devote an unlimited budget to purchase clicks in Google Ads campaigns. So although CPC is the best way to prove lower cost-per-acquisition in SEO, it isn’t actually a measurement of ROI.

Getting clicks is great and helps with brand recognition, but unless those clicks generate real revenue for your business, they shouldn’t be a part of your ROI calculation. 

In order to calculate the true ROI of your SEO campaigns, you have to know what those organic visitors do on your website after they click on your SERP result. Here’s how to do it.

Step 1: Choose a start and end date for your ROI calculation

Unlike PPC campaigns, SEO doesn’t always have a clear start or end date. Also, SEO can take time to see results, particularly for new websites who are just starting out and need to build their domain authority

That means ROI calculations for your SEO efforts should be broken into longer periods of time. three, six, and 12 month calculations are all reasonable for measuring the ROI of SEO. 

In the below charts, you can see the SEO performance of the same web page for a three, six, and eight-month time period. 

If this business were to calculate their ROI for only a three month-period, their return on investment would be little to nothing, as they only earned five organic clicks, none of which may have generated any actual revenue. 

However, as the ranking positions and impressions for the page improved, the clicks eventually started coming. This page’s six-month and eight-month performance metrics show major return on investment for this business’s SEO efforts.

If you’re doing SEO right, it should be an ongoing effort by your marketing team. However, generating a revenue calculation does require a set time period. In general, it’s best to lean toward longer time periods in order to prove a stronger ROI for SEO. 

Step 2: Determine the cost of your SEO efforts

For agencies calculating ROI for customers, this is simple. The cost of your client’s SEO is the amount you charge for your SEO services. For in-house digital marketing teams, you may rely on people across departments to execute your SEO strategy like marketing team members, web developers, or freelance content writers.

Costs you may want to include range from:

  • Team member salaries
  • Freelance writing costs
  • Agency services
  • Link building costs
  • SEO software tools or subscription fees
  • Web design and development costs 

Depending on what your SEO campaign involves (link building, on-page SEO, technical improvements, etc.) certain SEO activities have a much higher price tag. Web design or development changes, as well as link building, can be on the higher end, but also will usually have a significantly higher impact.

The more precise and targeted your SEO strategy, the easier it will be to calculate your ROI. A strong keyword strategy that aims for keywords with higher conversion potential and qualified traffic will likely increase your overall return on investment. 

Step 3: Identify which conversion actions on your website have economic value

A conversion occurs on your website whenever an organic visitor completes a desired action. 

For brands who generate sales at the time their clicks convert, identifying conversion actions is pretty simple. But for those brands with longer sales cycles (like B2B and B2Cs), it’s essential to identify which website actions are a part of the conversion funnel.

If your website doesn’t process sales, you need to identify actions that bring your sales team qualified leads or move a customer further along toward a final purchase decision. 

Determine the estimated value of each conversion action

If your website processes online transactions, the value of your conversion action will be the actual revenue generated from the sale.

For those brands that generate leads rather than sales, assign a value to conversion actions such as:

  • Submission forms
  • Demo bookings
  • Meeting appointments
  • Free trials
  • Email list/newsletter signups

After you identify which actions are a part of the conversion funnel, you need to assign an appropriate economic value for each. 

An organic visitor who completes a submission form shows a potential customer, but an organic visitor who books a demo or meeting with your sales team is likely much further along in the sales funnel. For that reason, the second action should be assigned a higher value.

For B2Bs: Micro-conversions, live chats, video views, etc. 

It’s also important to consider micro-conversions. Actions like starting a live chat, clicking into high-value pages, watching a demo video, and more can also represent economic value. 

Assigning lesser values to these actions can really help B2Bs narrow in on how organic clicks are leading to revenue generation, even if the final sale comes long after their first click.

For e-commerce sites: Transactions, average order value, repeat orders, etc.

If you have an e-commerce site, calculating the value of your conversion actions is easy. The value will be the actual revenue generated from your sales.

However, there is more information that you will want to know about your organic visitors other than whether they just made a purchase or not. Think about other information that you might want to know so you can set up your conversion tracking properly.

  • How much did they spend? 
  • Which products did they look at?
  • Did they add any suggested items to their cart?
  • Did they abandon their cart at some point during their visit?
  • Was it their first purchase or a repeat purchase?

Although the above information won’t be used in your revenue calculation, it will be invaluable to helping iterating on your UI/UX and your SEO strategy to improve your conversion rates overall.

Step 4: Set up your conversion tracking and analytics

Once you know which conversion actions have economic value, you need to start tracking those actions in Google Analytics.

Google Analytics provides loads of information about how much time users spend on your site, how many pages they view, and more. But the best feature of this free platform is that you can create specific goals and track how many users complete those goals during their visit.

Link your Google Analytics and Google Search Console accounts

In order to calculate the ROI of SEO, you need to know not only what visitors are doing on your website, but which conversion actions came from visitors who arrived at your site through organic search.

By linking your Google Search Console account to your Google Analytics account, you will be able to view in the Google Analytics reporting which goal completions on your landing pages came from organic visitors.

Linking these two platforms makes it easy to see all of this valuable information in one centralized place.

For B2B conversion tracking: Create custom goals

To set up goals, navigate to the admin tab in Google Analytics. You will see the “Goals,” feature located in the right hand column.

On the Goals page, you will be able to add new goals you want to track. Make sure you add a different goal for each conversion action you identified in step three.

When you add a new goal, you will be given the opportunity to assign a value to each goal. Assign each individual goal with the values you also determined in step 3.

Now, the economic value of your conversions will be included in your reporting.

For e-commerce sites: Set up e-commerce conversion tracking

Google Analytics has specific conversion tracking settings designed for e-commerce sites. They include both Standard e-commerce and Enhanced e-commerce.

In addition to tracking sales, these settings allow you to get more detailed information about the transaction process such as:

  • Average order value
  • Time to purchase
  • When visitors started checkout process
  • Abandoned carts

Setting up this detailed conversion tracking does involve adding some HTML tags to your page, so if you are not seasoned in working on the backend of your website, make sure to consult your web developer or a seasoned SEO strategist.

These conversion tracking settings are really powerful for improving your conversion rates and therefore your overall revenue for the long term.

For B2Bs: Link Google Analytics with your CRM platform

To get even more accurate ROI calculations, B2Bs need to close the loop between their Google Analytics account and their CRM. Knowing which organic leads eventually became customers helps you get an even more exact calculation. 

Here’s a simple explanation of how to set up closed-loop analytics:

  • Add a script to your website that extracts the user’s Client ID when they submit a lead generation form (you can use Google Tag Manager for this)
  • Customize the form to automatically send that Client ID to your CRM 
  • Use CRM integrations or plugins to export your custom events (like when leads become customers) back to Google Analytics. 

The basic idea is that your Google Analytics data is funneled into your CRM so your sales and marketing team knows which leads originated from organic search. For example, here is reporting in HubSpot that separates leads by their original source.

Even if your leads arrived at your website via search months before they signed a final contract, closed-loop analytics allows you to understand how much revenue was eventually generated from that organic lead.

Get more detailed keyword tracking

If you connect your GA account with GSC, you can also see which specific queries are driving your organic clicks.

Although you don’t need this information for an accurate ROI calculation, understanding the specific keywords that drive the most organic clicks and the highest quality leads is essential to iterating on your SEO strategy and improving your overall ROI.

If you don’t currently use an accurate SEO rank tracking software like Google Search Console, it’s unlikely you have a complete picture of your SEO performance. Google Search Console is the only source of truth for your website’s keyword rankings, so make sure you have an account or you are using a software platform that incorporates Google’s SEO dataset, like GSC Insights below.

Most popular SEO software use bots to scrape the SERPs for keyword rankings data. However, they only scrape a limited number of keywords and not at the same rate. That means the keyword data is usually backdated or incomplete.

To truly iterate on SEO for improved revenue generation, you need to have as granular a picture as possible of which keywords bring the most organic clicks and qualified traffic.

Step 5: Do your ROI calculations for SEO

Now comes the fun part. By plugging in your total conversion and revenue values determined in step four for the selected time period, you can calculate a much more accurate picture of the ROI of your SEO investment. 

Basic ROI calculation = (Gain from Investment – Cost of Investment) / Cost of Investment. This will result in a percentage format)

Let’s take the following example: Your company invests in a three-month link building campaign to improve rankings for a specific landing page. If that page generates $5,000 dollars worth of organic conversion actions or revenue, your ROI calculation would look like this: (5000 - 1647) / 1647 = 2.03 (203% ROI).

For lead-based businesses, this will still be an estimated ROI. But if your conversion tracking is properly set up, it will be the most accurate estimation possible. 

Why understanding your SEO ROI is so valuable

Getting an accurate ROI calculation for your SEO efforts is extremely important for your business, regardless of your industry. 

Not only can it help you forecast potential revenue increases for specific SEO campaigns or activities, proving a strong ROI can help you get more buy-in from key executives or stakeholders. 

SEO can feel abstract to those who don’t know much about it. But just like every other digital marketing platform, it is about understanding data on a granular level and responding appropriately.

Once you start tracking your ROI of SEO, you will likely see the return is much higher than other digital marketing platforms. Getting your brand or marketing team to direct more efforts and budget to elevating SEO performance across your highest converting landing pages can mean significantly more revenue for your company for the long term.

Artboard 1 copy 18@2x Shoot for the big bucks

Using SEO software for your campaigns and tracking will help you bring tangible numbers back to decision-makers concerned about revenue numbers.

Artboard 1 copy 18@2x Shoot for the big bucks

Using SEO software for your campaigns and tracking will help you bring tangible numbers back to decision-makers concerned about revenue numbers.

How to Actually Quantify the ROI of Your SEO Campaigns Want to accurately calculate the ROI of SEO campaigns? Learn more about how to use analytics tools to understand the true economic value of your SEO investment.
Manick Bhan Manick Bhan is the Founder and CTO of LinkGraph, an award-winning SEO and digital marketing agency. Through his agency work, thought leadership, and speaking engagements, he helps brands of all sizes grow their digital presence.

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