SEO Returns Calculation

seo roi calculation

The impact of SEO is put into perspective by calculating its return on investment. You may demonstrate to company decision-makers how SEO has created traffic, leads, and sales, for example, to encourage them to continue to invest in this strategy.

What is SEO ROI?

The return on investment of search engine optimization (SEO ROI) is a calculation. Companies can use the ROI SEO formula to determine SEO’s return on investment by looking at search engine rankings, organic website traffic, and goal completions. 

How do you calculate SEO returns on investment (ROI)?

In three easy stages, you’ll learn how to determine SEO’s return on investment:

1. Create a conversion tracking system

Setting up conversion tracking in Google Analytics is the first step in calculating your SEO ROI. This helps you to keep track of all revenue-generating conversions on your website. Whether you make sales directly on your site or not determines the arrangement you use.

eCommerce tracking allows eCommerce businesses to extract data from their online transactions and calculate their actual income. As a result, the data for online returns is exceedingly precise.

Conversion objectives, such as lead form submissions, can be set up by lead-based businesses, such as service providers, and dollar amounts can be assigned to those goals based on customer data.

Here’s how both types of companies can track conversions on their websites:

Ecommerce: How to set up conversion tracking to enable SEO  ROI Calculation

Setting up eCommerce tracking using Google’s guidelines is the best approach to track revenue from an eCommerce company.
You’ll be able to see an eCommerce Overview (Conversions > Ecommerce > Overview) report with all of the information linked to your online sales once you start tracking eCommerce data on your site.
This report is useful for gauging the overall success of your site and keeping track of your progress. Even if you don’t expect to quantify your SEO ROI right now, we recommend setting up eCommerce tracking as soon as possible.
When you decide to dive deeper into Analytics, the sooner you start gathering data, the more you’ll have to work with.

Lead generation: How to set up conversion tracking to track SEO’s ROI

It’s a little more difficult to gather precise data on how much revenue you create if you don’t make sales directly on your site. Assigning currency figures to each of your on-site conversions based on previous sales data yields the most accurate estimate.

Create objectives for each of your on-site conversions by going to Admin > View > Goals in Analytics. These objectives can include things like contact form submissions, free quotation requests, and even phone calls if your site has call monitoring enabled.

Add an expected value for each of these conversions in the Goal Details section.

These numbers won’t be exact, but if you have any analytics data to work with, you can generate a close estimate.

2. Sort your conversions by channel

After a month or so of tracking conversions, you should have enough data to start calculating your SEO ROI.

The best way to achieve this is to go to Conversions > Multi-Channel Funnels > Assisted Conversions and look at the Conversions report.

Select “Conversions” at the top of the report to see all of the conversions that occurred on your site within the period you specified, grouped by the channels that drove them.

All consumers that accessed your site through search engines like Google and Bing are included in the Organic Search channel, which means you can attribute those conversions to your SEO strategy.

3. Calculate your SEO ROI

You may calculate your ROI by comparing how much money your SEO strategy earned during a given period (usually a month or a quarter) to how much you spent on SEO during that time.

The following method is used by most businesses to calculate SEO’s return on investment:

{(Profit gained by Investing – Amount Invested) / Amount Invested}

If your business already has a strategy for calculating the ROI of other marketing channels, you can use the same approach to SEO.

Some businesses, for example, measure ROI based on the net profit from each sale rather than total revenue. If you don’t use the same numbers for your SEO approach, your results will be distorted.

If you don’t have a way of determining your marketing ROI, you can use the {(Profit gained by Investing – Amount Invested) / Amount Invested} calculation from Investopedia. Then multiply the result by 100 to get a percentage return on investment.

2 more Google Analytics reports for calculating SEO’s return on investment

You can use a few different Google Analytics reports to help measure your SEO ROI, depending on your business and configuration.

The following reports are directly related to your ROI, and combining them with your initial estimate can provide you with a comprehensive view of how your approach is functioning.

1. Assisting Interactions Analysis

Most of your customers will come back to your site numerous times before making a purchase, filling up a lead form, or doing something else.

For example, a consumer may find your website through search engine results and spend their first visit reading your product pages before leaving without making a purchase. They could come back to your site later by typing your URL into their browser, visiting it directly, and making a purchase.

You may have a skewed view of where that consumer originated from, depending on the conversion attribution approach you utilise.

If you only look at the most recent interactions, for example, you’d think it was a direct traffic sale. You wouldn’t be entirely incorrect, but this approach ignores the fact that their first visit was from an organic search, implying that the sale would not have occurred without SEO.

Organic Search aided in the conversion in this case. The Assisting Interactions Analysis report (Conversions > Multi-Channel Funnels > Assisted Conversions) displays instances like this, as well as the worth of channels that don’t directly lead to conversions but do play a role in them early on.

This allows you to have a better understanding of the value of each of your channels by examining their participation in conversions, even if they aren’t the last engagement.

2. Top Conversion Paths

The Top Conversion Paths (Conversions > Multi-Channel Funnels > Top Conversion Paths) report evaluates all of the processes that lead to conversion, similar to the Assisting Interactions Analysis report.

Instead of displaying each channel’s contributions, it displays the most typical conversion paths your users follow.

The most typical path users take in this example is to find the site using Organic Search, then return to the site directly and convert.

This report is helpful because it shows you how your customers engage with your site and other channels before completing a purchase or registering as a lead. And the better you know your customers, the more effectively you can plan your future campaigns.

Additional Readings:

Quiz of SEO ROI Calculation

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SEO ROI Calculation

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