Understanding the true impact of your Search Engine Optimization (SEO) strategies is essential in the dynamic world of digital marketing, where every investment counts. Thus, we will take you through the crucial steps and key metrics to assist you in effectively assessing the Return on Investment (ROI) of your SEO strategy. Eventually, this will help you to optimize your online presence and drive real business growth. Companies can calculate SEO’s return on investment (ROI) by looking at search engine rankings (SERP), organic traffic, and goal completions, and then using the ROI SEO formula: (Gain from Investment – Cost of Investment) / Cost of Investment.
The Importance of Measuring SEO ROI
On average, businesses rely on organic search to generate a substantial 53% of their website traffic. Due to this, SEO’s critical role has proved to be essential in the digital world. Also, virtually every modern purchase journey involves interaction with organic search results, highlighting the significance of SEO in today’s market.
Understanding the financial impact of SEO on your business is critical. With a clear understanding of the SEO ROI, it becomes easier to determine which strategies are effective and which ones need improvement. Get our customized SEO packages & improve your business ROI.
Tracking various SEO key performance indicators (KPIs) is essential. But, positive ROI is the ultimate barometer of success. Establishing a positive ROI signifies profitability and helps you get support and enthusiasm from key stakeholders. Quantifying the financial gains from SEO determines your strategic decisions. It gives you a chance to showcase the actual benefits to your organization. This makes it an indispensable aspect of your digital marketing strategy.
How Do You Calculate the ROI of SEO?
Savit Interactive’s internal SEO ROI Calculator simplifies our workflow. We assess the potential value of SEO opportunities. But fancy tools are optional. To understand better how we calculate SEO ROI, we will look into essential metrics and formulas, making it easy for you to craft your SEO ROI calculator:
1. Discover Your Average Click-Through Rate (CTR) Based on Position
At Savit, we harness the power of Big Data to improve our strategies. We meticulously calculate the average Click-Through Rate (CTR) for branded and unbranded keywords across different positions by utilizing PowerBI’s data visualization capabilities. This analysis helps us to establish three distinct scenarios: ‘good’ at position 8, ‘better’ at position 5, and ‘best’ at position 2. This information provides us valuable insights into potential rankings.
While achieving consistent first-page rankings is challenging due to ongoing fluctuations. These estimates serve as reliable guidelines, offering a peek into the expected performance for each ranking tier.
2. Retrieve Your Conversion Rates for Every Analytics Goal
You can pinpoint the conversion rates associated with each goal you’re tracking to assess SEO performance by leveraging Google Analytics. These objectives encompass revenue generation, newsletter signups, form submissions, and more. It’s advisable to analyze a robust dataset spanning 3-6 months to ensure statistical significance and accurate insights. This extended timeframe offers a broad view of performance trends. It allows you to make informed decisions and optimizations, which ultimately drives more effective SEO strategies.
3. Determine the Monetary Value of Each Conversion Goal
Setting value to analytics goals holds immense significance. Determining SEO ROI for your site’s marketing efforts becomes a massive challenge without estimated values attributed to the conversions you monitor. Lacking dollar values for your SEO objectives? Look no further; we have given helpful tips below to assist you in determining these crucial numerical benchmarks ahead. Establishing these values lets you quantify the impact of your marketing endeavors and make valuable decisions to enhance and improve your site’s performance effectively.
4. Predict Traffic and Revenue Using Search Volume
With the essential metrics in hand, like Click-Through Rate (CTR), Conversion Rate (CVR), and Goal Value, you’re prepared to understand SEO ROI estimation rooted in search volume potential. The formula is straightforward: ((Total Monthly Search Volume (MSV) * CTR) * CVR) * Goal value = Estimated SEO Revenue per Month. Multiply this monthly figure by 12 for a yearly revenue projection. This formula will provide a complete view of your possible annual SEO-generated revenue. This calculation assists you with valuable insights into the financial effect of your SEO strategy. It also aids in decision-making and goal-setting for your digital strategies.
5. Calculate the Projected SEO Return on Investment (ROI)
ROI is a simple equation: it’s the return on your investment divided by the cost of that investment. To calculate it yourself, you can easily apply the following formula:
(Estimated SEO Revenue per Month – Cost to Implement Strategy) / Cost to Implement Strategy] * 100 = SEO ROI
This simple and easy calculation allows you to know the effectiveness of your SEO strategy by evaluating the revenue generated compared to the expenses incurred. It’s a powerful tool for assessing the financial influence of your SEO efforts and optimizing your digital marketing investments.
Monitoring E-commerce Conversion Value
The first and foremost step to collecting valuable e-commerce conversion data is to integrate e-commerce events into your website using Google Tag Manager.
If you still need to set this up, you can easily follow Google’s instructions for a smooth setup process.
Once you’ve started tracking, you are going to gain access to a complete e-commerce report containing detailed insights into your transactional activities. In Google Analytics, navigate to “Reports,” then go to “Monetization,” and select “Ecommerce purchases.”
To focus on organic traffic, use a filter by clicking “Add filter.” Choose Dimension as “Source Medium” and Dimension values as “Google / organic.” Click “Apply” to refine your data.
While the detailed information is helpful, our main focus is on a singular metric: conversion value. To access this crucial figure, click the “Insights” icon at the top right corner. This tool will immediately display the total revenue for the selected time frame. It allows you to calculate the monetary success of your organic traffic conversions.
Monitoring the Values of Lead Generation Conversions
Tracking conversions becomes very complicated when sales don’t appear directly on your website. Unlike e-commerce transactions, leads or conversions lack a predetermined monetary value unless and until you assign one. A task is readily accomplished within Google Analytics.
Navigate to “Admin” and proceed to “Events.” Create events corresponding to your conversions. It encompasses actions vital to your business, like form submissions, free trial signups, or specific page visits.
Let’s create an event for a form submission. Provide it with a name, and select your “Parameter,” “Operator,” and “Value.” You’ll find your conversion under “Existing events.” Turn on the “Mark as conversion” switch, and it’ll appear in the “Conversions” tab.
However, you must add monetary value to your conversion to finish this process. Go to your event, access the “Parameter configuration” section, click “Add modification,” and insert a currency type (e.g., EUR) and its corresponding value (e.g., “50” for 50 euros).
Click “Save,” and you’re all set. This process allows you to calculate the SEO ROI as each event triggers a monetary value assignment.
Understanding and measuring the SEO ROI in digital marketing is pivotal for sustained success. Savit Interactive, with its expert SEO service, helps you to navigate this unique and challenging digital world. By quantifying the financial impact of your SEO efforts, you can make informed decisions that fuel business growth.
Boost your SEO strategy and unlock its true potential with Savit Interactive “The Best SEO Company in Mumbai, India. Our expert professionals are ready to guide you toward maximizing your ROI. Give us an opportunity to supercharge your online presence. Contact us today for your ultimate SEO success!