Do you measure the return on investment of your SEO campaigns? You should because there’s no better way to know if you’re succeeding or where you’re failing. And in grueling economic conditions, money talks loudest.
I’m not saying other metrics are less important. No, in fact, you need a handful of measurements in order to find your return on investment.
Yet, generally, when we measure SEO, it’s in terms of rankings or traffic, not dollars.
Here’s how I measure the returns I get on campaigns.
How to Evaluate Your ROI
There isn’t a report you can pull in Google Analytics that will chart the profitability of your SEO campaign, but there are ways to measure factors that add up to reasonable approximation of return on investment.
First, let’s set our expectations. ROI is the return on an initial investment. With SEO, this is difficult to quantify. Results of SEO efforts aren’t always immediately seen nor is growth always linear. Campaigns are subject to unforeseen and uncontrollable phenomena. Revenues may fluctuate regardless of SEO efforts. Because of these and other factors, calculating the return on SEO requires more than a simple monetary value.
It’s crucial to assess growth in all areas where SEO has an impact. By including rankings, traffic, conversions and revenue into our calculations, we can see a more complete report on the performance of our SEO campaign.
Below are statistical views of an actual case study that shows the year-over-year growth of a real campaign.
Rankings are the simplest indicator of growth, and if you haven’t thoroughly researched the keywords that you hope will rank well, rankings are meaningless.
The right keywords prompt people to click on your listings. Irrelevant terms won’t bring you traffic, much less raise your bottom line.
Naturally, increased rankings on the right terms brings increased traffic. Make sure to look at organic search traffic only, otherwise you’re cheating ;) .
Traffic should rise with rankings or there’s a problem, and probably with your keywords.
In the same manner that rankings are irrelevant without clicks, traffic is irrelevant without conversions. And conversion rates are directly tied to revenue and profits.
Many factors can impact conversion rates, and all too often, those impacts are negative. It could be a coding problem, or sloppy navigation or confusing content. Good rankings and good traffic with low conversion rates means there’s at least one stumbling block in the home stretch.
Then comes the ultimate gauge of success. The number of factors that influence revenue multiply compared to the other metrics. But by knowing where you stand with rankings, traffic and conversions, you can gain a deeper understanding for how effective and efficient your efforts are.
And knowing revenue over time, you can get an idea about tweaks you might make in this chain of activities. Pump up successful steps and fix problem areas.
Ultimately, of course, you can compare revenue to expenditures in order to arrive at the classic return-on-investment measurement.
A healthy marketing campaign will display growth in all of these areas, while the ability to see potential decreases in specific areas will help you to pinpoint problems and re-evaluate strategy if needed. Proving the value of SEO may not be exactly straight forward, but a well-structured campaign with metrics will show quantifiable results.
P.S. Google Analytics might not show you your ROI, but it’s great at other tasks, like creating useful advanced segments.