To calculate the return on investment of an SEO campaign, you must subtract the cost of investment from the profit you generated, and then divide the result by the cost of investment. Finally, multiply by one hundred. The formula would look like this:
(Net profit – Investment cost) / Investment cost x 100
Simple, right? What can be difficult is calculating the profit generated directly from organic positioning, since customers will not always come from search engines. They can come from social networks, PPC, or other avenues in which you are investing. For this, Google Analytics will be your ally.
1.- SEO generates almost 6 times better results than advertisements in search engines.
2.- Content marketing gets 3 times more prospects than search engine advertising .
3.- Of every 100 visitors who enter a website, only 11 come from the most famous social networks, while 66 do so from Google .
4.- To sell, being positioned in search engines is a better option than social networks.
If you prefer, we leave you this same article in video format:
ROI SEO: Why invest in web positioning?
Marcus Sheridan, in his book They Ask You Answer, explains how he got a 3 million USD ROI from an article ( content marketing ) and Google ( SEO ).
What was your strategy?
Hoping to increase her company’s sales, Sheridan posted a text called, “How much does a fiberglass pool cost? ”.
At that time, this was the first piece of content that gave potential clients in the industry a clear idea of the amount of money that was required to invest to build such a pool.
In the end, the article did not establish an exact amount, but it did explain what the general rates were for this type of service , and detailed the factors that affected each budget :
- Cost of the different models.
- Price of landscaping work.
- Value of accessories.
To his surprise, a few days after the article was published, Sheridan observed the following:
a) The text appeared at the top of the first page of Google when people searched for any phrase related to the question “ How much does a fiberglass pool cost? “.
b) Thanks to that article, you started generating tons of leads for your business. But not only that: the conversations with these potential clients were much more productive than before, because now they were already educated on the subject and arrived at that first contact with a clear idea of what they were probably going to spend.
You may be thinking right now:
“How did Marcus Sheridan know that thanks to that article he generated 3 million dollars?”
Well, the answer to that concern is summarized as follows:
Thanks to HubSpot , a software capable of tracking the activity of users who arrive at a website, Marcus was able to determine:
- The exact number of visitors who found your company’s site thanks to the text “ How much does a fiberglass pool cost? ”.
- How many of those thousands of visitors became leads.
- How many of those prospects requested a quote and subsequently became customers of your company.
This type of software not only allows you to know how your new visitors met you, but also helps you know how many pages they read, what actions they took within your website, and much, much more.
Here’s how Sheridan was able to determine the exact earnings the item brought him:
He calculated how many people made a purchase after reading the text and discovered that, in total, thanks to that piece of content, he had accumulated 3 million dollars!
Clearly, fiberglass pools are expensive ( a single buyer represents thousands of dollars), but the example serves to draw a real scenario of the high return on investment that exists in the world of SEO and content marketing.
How to calculate the return on investment of SEO?
To calculate the ROI (return on investment) of an SEO campaign you must know two key figures:
1. What has been the total amount invested in SEO efforts. This can be easy if you have hired an agency with fixed monthly prices like us.
2. The net profit that the SEO has produced, obtained with Google Analytics.
Once these data are obtained, which is the complicated part, a simple formula is applied:
Let’s see this with an example:
Suppose you have paid 9,000 USD for an SEO campaign for three months.
Your website ranked on the first page of Google for various keywords, increasing traffic by 250%.
Through Google Analytics, you were able to verify that this traffic generated by organic positioning (not by PPC, social networks or other of your strategies) generated 15 sales, for a total of 30,000 USD.
Let’s calculate the ROI:
(30,000 – 9,000) / 9,000 x 100 = 233
The ROI for this campaign was 233% .
How to predict how many clients you will get with an SEO campaign?
As we explain in our SEO Forecasting article :
When you do search engine optimization it is irresponsible to say things like:
“We will increase traffic 70%”.
“We will attract 7,000 visitors a month.”
“We will sell 150 products every week.”
However, there are several methods to have an approximation of how much traffic ranking for the terms of your interest will bring you.
You can get them here , in the article cited above.
SEO ROI depends on the objectives of each client
Perhaps the objective of your SEO campaign is not to close a specific amount of sales, but to generate awareness (visibility).
Perhaps you want to increase subscribers to your newsletter or get viewers of the next online event you will sponsor.
Whatever the case, the success of SEO goes far beyond how many sales you get thanks to it.
It is logical that all businesses want to generate profits, but some advantages of SEO cannot be quantified monetarily.
Thanks to long-term organic positioning, some consequences will be that:
- Your online reputation improves.
- Become an authority in your niche.
- Each time it costs you less to close a sale because of the trust you generate in people.
Measuring this is very complicated and, even so, it is part of the SEO ROI.
visits are not sales
Not all people who come to your website are going to end up buying from you.
47% of buyers see between 3 and 5 pieces of content before making contact with a sales representative .
Also, getting the click is half the job :
If your product or service has negative reviews, if the customer service when they contact you is poor or if the sales process is not refined, you cannot blame SEO for not offering a good return on investment.
As I wrote at the beginning of the article, with software like HubSpot or heat maps you can track each new visitor to your website.
This will allow you to study which page they stay on the longest, which one they tend to leave your site on, and other statistics that will tell you what to improve on your website to increase your conversion rate.
SEO ROI: Conclusion
Determining the ROI of an SEO campaign is a complex process.
It is even more difficult to predict how many clients you will get thanks to optimizing your website and producing content.
The customer lifetime value and the cost of acquiring your new customers are two key indicators to measure the success of your campaign.
What is clear, and what the great voices of the industry agree on, is that creating texts that answer the questions of your potential customers and placing those articles on the first page of Google is the most powerful marketing tool these days .
