Of all marketing channels, search engine optimization (SEO) is often the hardest to measure because it l has fewer data points provided than other channels. Other channels like social, paid search, and email often have their own platforms that return detailed data points. For example in paid search ads, you can see conversions associated with each keyword, the cost per conversion by keyword, and more. However, in SEO you often can’t even see complete traffic details at the keyword level, let alone conversion data by keyword.
In this article, we’ll cover how to measure the return on investment (ROI) of SEO, including an SEO ROI Excel calculator template
How to measure the ROI of SEO
To measure the ROI of SEO efforts, you can do this basic calculation:
Organic ROI = Organic Revenue Gains - Cost of SEO Investment / Cost of Investment
To calculate organic revenue gains, take the total organic revenue you saw from the URL(s) before you implemented the optimization and subtract that from the organic revenue you saw after optimization was implemented.
You can also use our SEO ROI calculator spreadsheet to help you with the calculation.
How to calculate organic revenue gain
When learning how to calculate SEO ROI, you need to first calculate SEO revenue or organic revenue that came from SEO efforts in order to plug them into the formula above.
The simplest way to do this is to compile a list of all the URLs you optimized as part of the SEO project and find the difference between revenue/lead value attributed to those landing pages now versus before. It’s best to compare to the same time period last year if possible to eliminate possible seasonal consumer behavior changes.
For example, an e-commerce business may want to determine SEO revenue from the Black Friday season compared to last year (perhaps they launched gift guides, or optimized product category pages). So you would group all of the URLs that were part of the SEO work (such as the gift guide URLs or product category page URLs), calculate the revenue to those URLs this year, and then subtract the revenue from those same URLs last year to determine the gain. Be sure to evaluate strictly the landing page data for those URLs, as the user journey would be “performing the search > clicking your URL > converting.”
Calculating revenue for lead-based businesses
E-commerce businesses have the luxury of seeing exact revenue data in analytics, but for lead-based businesses, it’s not as straightforward. Here is some baseline data you will need if you’re a lead-based business in order to measure the ROI of SEO:
- Percentage of website visitors that submit a lead form (website conversion rate)
- As long as you track form submission/lead submission as an analytics goal, the website conversion rate will be readily available
- Percentage of leads that turn into actual customers
- Lifetime customer value or annual customer value (not only the average amount that a single customer will spend with you but how long will they remain a customer or how many paid engagements will they have with you).
Predicting SEO ROI before planning projects
In addition to learning how to measure SEO ROI after project completion, predicting the return from a potential SEO project or projects can be valuable in prioritizing projects or deciding whether a certain project is worth the budget and/or effort.
It can also help set goals for the SEO project. For example, it can help you set ranking position goals by telling you how well you would have to rank to reasonably expect a certain return.
Our SEO ROI spreadsheet calculator includes a tab for predictive analysis.
The basic premise (and formula that is used in the calculator above) is that you collect all the keywords you’d be optimizing for in the project, add up the total monthly search volume on Google, then multiply the expected click-through rate to arrive at the expected new rank (Advanced Web Ranking provides average click-through rate data here) to get expected traffic if ranking in the new position. Then you multiply the expected traffic by your average conversion rate to get estimated transactions (or lead submissions). Then multiply that by the average order value (or customer value for lead-based businesses).
Tips for determining expected ranking position
Pick a realistic and conservative goal, like increasing two or three positions. For example, ranking No. 1 might not be realistic if you are not yet on the first page . However, ranking No. 1 might be realistic if you are already in position 2 or 3).
Common ranking goals include moving from the second page of search results (position 11 to 20) to page one (position 10 or better) or moving from position 7-10 to the top three (position 3 or better).
How to determine keywords and monthly search volume
You can use a keyword research tool to determine what relevant keywords are being searched on Google and approximately how many times per month. If you don't have access to a keyword research tool or agency to support you in the research, can you also look at Google Search Console data (under Search Performance) to see what keywords are currently being used to find your site. Look at impressions to find keyword opportunities, as those may be keywords that get impressions but don't rank well enough to get clicks. You can use the number of impressions per month as the monthly search volume.
How do you calculate ROI for specific keywords?
To calculate ROI for specific keywords in SEO, you must first analyze revenue and return at a URL level, then extrapolate that to keywords/keyword groups.
With the predictive ROI calculation we covered above, you are predicting ROI for specific keywords already.
To calculate ROI for specific keywords after project completion, you will need to understand the ROI for each URL (which is how our calculator template is structured), and then know which keywords that URL is ranking for. With that information, you can figure out which keywords or group of keywords were contributing to the return seen from that specific URL.
Because analytics and SEO tools (like Google Search Console) don’t give much keyword-specific data, measuring by URL is currently the most accurate way to calculate revenue or return by keyword.
As you can see, although SEO gets fewer performance data points than many other platforms, there are still reliable ways to predict and measure SEO ROI.