Are you thinking of starting a new SEO campaign and want a great way to calculate SEO ROI (return on investment)? Then read on.
It is a must to calculate SEO ROI when you are investing in SEO services (search engine optimization) as part of your online marketing budget. You must be able to know 3 metrics in order to know if your SEO budget is being used effectively. What are these 3 metrics?
Unique visitors to your website
Revenue per conversion
Conversion rate of your website
Setting up your SEO ROI tracking
With the help of an Excel worksheet, you can keep track of your 3 main metrics. You will need a column for each of: the unique visitors, current conversion rate and the revenue generated per conversion.
To find the number of organic unique visitors to your website, simply log into your Google Analytics account. This useful tool shows you the traffic from all sources -which you can break down to time period and source. To find the number of organic visitors to your website, click on ‘organic’ in the traffic sources area. Note the number down. Let us say that your website is getting 10,098 visits a month from organic sources-this number 10,098 can be your baseline in the spreadsheet:
To find the number of your current conversion rate, you need to have the conversion goals set up in Google Analytics. You have to define your conversions, such as filling in a purchase form, subscribing to your email, downloading some content etc. The destination of your visitor’s conversion would then be a thank-you page if they subscribed, sent a form or downloaded something. Now you want to assign a monetary value for one conversion. If the worth of a purchase is on average £99, then you can put the revenue per conversion as £99 in your revenue per conversion column of the spreadsheet:
When you have set up your conversion goals in your Google Analytics dashboard, you can find your goal conversion rate. Let us say that the percentage of visitors to your website making a purchase (thereby filling a purchase form) is 3.56%.
Once you have put 0.0356 in the third column of your spreadsheet, you will be able to calculate SEO ROI for your next campaign.
Now you can add 3 extra columns to your spreadsheet:
Your SEO campaign budget
Additional organic visitors (to break even)
Keywords search volume
Using your metrics to calculate SEO ROI
Let us say that your SEO marketing budget is £10,000. Your break even point for this SEO campaign would be £10,000. How many more conversions do you need to break even?
The cost of each conversion is £99. You will need 10000/99 conversions to break even at £10,000. That is 102 conversions (rounded up from 101.0101).
Now you need to find how many additional visitors you need to gain 102 conversions in order to break even. With your current conversion rate of 0.0356:
Let us round that up to 2866-this is the number of visitors you need to break even comfortably.
Now the question is: can you achieve 2866 visitors?
Search volume and estimated traffic for SEO ROI calculation
Looking at data from Advanced Web Ranking tool, we can see that the first 5 organic results on page one gets 67.60% of all click throughs and results from 6 to 10 gets only 3.73% CTR on the first page. Being on the first page of organic search results on Google will get you 71.33 of CTR. Being on page 2 gets you 5.59% CTR.
The data will give you an estimation of the clicks you will get for your keywords on page 1, 2 and 3.
Now you need to find the search volume of your target keywords on Google Adword Keyword Planner:
Lets say that your target keyword is: accounting software
The average monthly search volume is 60,500 and you are optimistic that you can rank on page two. 5.59% CTR of 60,500 search volume is 3382 (rounded up from 3381.95). As long as you reach page two for accounting software, you can estimate about 3382 of additional organic search visitors.
So from spending £10,000 on SEO, will you get 2866 additional visitors from organic search to reach 102 conversions? From your estimations, you should get a positive ROI if you rank on page two for ‘accounting software.’ These are all estimations but it gives you some figures to see how you can achieve a positive SEO ROI.