How do you measure the success of your SEO campaigns? You can use many different metrics to determine whether your Search Engine Optimization or SEO is effective. Some of those metrics include monitoring traffic, referral sources, and conversions, to name a few.
But, to determine your campaign’s true value, there is one metric that takes precedence over the others: Return on Investment, or ROI.
What does SEO measure?
SEO measures a website’s rank on Google and other search engines. It is very important for companies to appear high on Google results, as 75% of people will never scroll farther than the first page of Google results.
SEO targets unpaid traffic, known as organic traffic, instead of paid traffic.
What is local SEO?
Local SEO focuses on implementing different strategies and tactics to boost your business’ rankings in local search results. Local searches may involve a keyword, for example, “hairdresser in Malibu,” or the search engine might deduce a location from the searcher’s device. What is SEO ROI?
SEO ROI is a calculation to measure the ROI (return on investment) of SEO.
How do you calculate ROI for SEO?
To calculate your SEO’s ROI, you can look at search engine rankings, organic website traffic, and goal completions. There is also a formula to calculate ROI for SEO, which is:
(Gain from Investment – Cost of Investment) / Cost of Investment.
When calculating your overall ROI for SEO, you must combine all costs that you have spent on SEO, including:
- In-house SEO resources: Break down the cost of any in-house employees, copywriters, web developers, etc., who dedicate their time to SEO.
- Agency resources: If you work with an SEO agency, this is much easier since most agencies use retainers with a fixed monthly fee. Take any agency fees associated with SEO into your calculations.
- Investment into tools: Don’t forget about the tools you use to help with SEO, including software and other SEO helpers.
Combine these costs, and you will get a figure to put into the “investment” part of your ROI calculation. Take into consideration that these costs may fluctuate monthly, which is normal. Just make sure you account for the changes when you evaluate the metric each month.
The process for measuring SEO’s value is slightly different depending on how you make money from your website. The two main options are from on-site purchases, also known as e-commerce, and off-site purchases, known as lead generation.
Why is measuring SEO ROI important?
Statistics show that, on average, businesses drive 53% of their traffic through organic searches. This is why you must understand what actual financial value the channel drives to your business.
If you don’t figure out precisely how much money is returned for every dollar you invest in your strategy, you will never be able to decide or understand which channels in your marketing strategy are performing best and which should be scaled up.
Calculating SEO ROI for e-commerce
Calculating your SEO ROI for e-commerce is fairly simple since the purchases take place on your website. All you have to do is set up e-commerce tracking, which you can set up easily with Google Analytics.
Google Analytics will provide you with a number of e-commerce reports, including:
- Overview: Summary of revenue, e-commerce conversion rate, transactions, average order value, among other metrics.
- Product Performance: Revenue, purchases, quantity, average price, and average QTY by SKU and category.
- Sales Performance: Revenue by date.
- Transactions: Revenue, tax, shipping, and quantity by transaction ID.
- Time to Purchase: Days to transaction and sessions to transaction.
You can then segment the above metrics by channel, including organic traffic. This will allow you to see how much of your revenue stems from your SEO efforts.
What is KPI in SEO?
KPI stands for Key Performance Indicator.
SEO KPIs are what we use to measure the performance of organic search results on a website. KPI can help determine what pages prefer the best, which keywords convert the most, and what
areas of the website still need to be optimized for search. When marketers create specific KPIs, it’s a lot easier to determine targets and goals and measure performance as they relate to those set values.
How to calculate organic traffic
To calculate organic traffic to your website, you must:
- Find all the keywords that your target ranks in the top 100 organic search results.
- Estimate how much traffic the target gets from each keyword, based on its ranking position and the estimated CTR.
- Add up the numbers.
Tracking your rank on Google to measure your SEO ROI
Once your local SEO strategy is in place, it’s time for an experiment. Go to Google and type in the keywords you are trying to rank with. If you notice a sudden rank bump, you are doing SEO right. A sudden drop means you are doing something wrong, and it’s time to reevaluate the strategy.
How to Calculate the ROI of Your SEO Campaigns With Google Analytics
- Set up conversion tracking: Conversion tracking will give you access to information regarding your conversion rate, the total number of website transactions, average order value, and total revenue.
- Analyze your conversion tracking: When you run your conversions report through Google Analytics, you will get data on all of your website traffic, including how many conversions came from paid search, organic search, social media, emails, and so on. There is a tab that shows the number of conversions and the value of those conversions. The value essentially shows you how much revenue has been generated from each search channel. You will want to compare these values to the amount of money your business has spent on SEO during that same amount of time, and you will get an understanding of your ROI.
- Calculate your ROI percentage: (Gain from Investment – Cost of Investment) / Cost of Investment. Then, multiply the resulting number by 100 to get your ROI as a percentage.
How To Improve Local SEO ROI & Demonstrate Value To Clients
Create a Google My Business account
Google my Business (GMB) is an essential SEO tool. GMB helps local customers find and interact with your business, as well as seeing all of your company’s pertinent information: address, business hours, and reviews, in one convenient spot. To make the most of our local SEO efforts, you must make sure your GMB profile is complete, up-to-date, and accurate. When you
do this, potential customers can learn as much as possible about your services without even needing to leave Google. A complete GMB profile is a surefire way to improve your SEO ranking.
Gather customer reviews
The more positive reviews you gather, the more likely new customers will feel confident in choosing your business. 95% of customers read reviews before making a purchase, and, 72% of customers won’t take any buying actions until they’ve read reviews. So, if you skip the reviews, you are potentially missing out on a ton of business. You can incentivize customers to leave reviews by offering discounts or drawing entries for each customer that leaves a review. When your business appears to be a sought-after, five-star establishment, people will want to try you out without you having to spend money to attract them, increasing your SEO ROI.
Optimizing your web content for local SEO
To rank higher on search results, you must abide by the best practices as developed by Google and other search engines, including:
- Create local landing pages for every city you are trying to target
- Embed a Google map on local landing pages
- Ensure your business’ phone number and address are accurate, visible, and easy-to-find on your website.
- Use an engaging and actionable meta description.
- Optimize heading tags and add one H1 tag for every page that uses your primary keyword. Add H2 and H3 headings as needed.
Focus on hyper-local link building
- Contact local bloggers that are in a similar industry as you and offer to write a guest post for their website.
- Develop relationships with local media outlets and submit press releases when something newsworthy occurs at your company, for example, awards, recognitions, donations, and large hires/acquisitions.
- Join your city’s Chamber of Commerce and BBB chapter and get listed on their websites.
- Create local content on a website that ranks for keywords.
ROI answers perhaps the most important question on business owners’ minds: am I getting more (or enough) out of this than what I have invested in it? Marketing experts know how important it is to justify budgets with concrete results that show a positive return on investments. That’s why knowing how to boost local SEO, make the most of your investment, and calculate your ROI is key to demonstrating the value that your firm brings to clients.