SEO

Step-By-Step Plan to Measure ROI

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

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.

rankings 300x81 Step By Step Plan to Measure ROI
A simple rank tracker can help you plot ranking progress over time.

The right keywords prompt people to click on your listings. Irrelevant terms won’t bring you traffic, much less raise your bottom line.

Traffic

Naturally, increased rankings on the right terms brings increased traffic. Make sure to look at organic search traffic only, otherwise you’re cheating ;) .

traffic 300x219 Step By Step Plan to Measure ROI
Search traffic is up 41% year over year in this example.

Traffic should rise with rankings or there’s a problem, and probably with your keywords.

Conversion Rate

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.

conversions 300x183 Step By Step Plan to Measure ROI
Conversion rate increased from an average of 6.83% to 19.87% year over year.

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.

Revenue

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.

revenue 300x95 Step By Step Plan to Measure ROI
Here you can see that revenue increased 61% year over year.

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.

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Kenny Hyder runs Hyder Media, focusing on SEO, social media and ORM. His expe­rience has led him to work with some of the lar­gest brands online, inc­lu­ding seve­ral For­tune 500 com­pa­nies — hel­ping them with their search-mar­ke­ting stra­te­gies.
0dd617fd4c9934e09fd6fd1aafe85b30 64 Step By Step Plan to Measure ROI

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4 thoughts on “Step-By-Step Plan to Measure ROI

  1. Thanks for the great info Kenny! ‘ve found that it’s important to keep your initial goal in mind as you look through all of the variables mentioned above. Things that initially may not have looked good can be positive once they’re placed into context. I’m still a bit new to the world of SEO and your posts have been really helpful. I found some free guides at http://goo.gl/XoeE6 that were pretty useful too.

  2. Good guide. I think need to mention one more point:
    Total organic traffic doesn’t show only you SEO influence, it also include PR and “word of mouth” segments (when users search your company name). Measuring of non-branded traffic is much more better.

  3. I believe ROI depends purely on what your goals are, if your main goal is just to bring in traffic, then let increase in traffic be your benchmark, same goes with sales or conversion.