How to determine your ROI on your SEO
The fundamentals for gauging the effectiveness of your Search Engine Optimization
SEO is the standardized way in which web pages fight to gain the top rating in Google and other search engines. Yet, there is little in the way of determining which sector of the SEO strategies yield the best ROI. This has led to misallocation of funds into areas that have no results for a company, business, or individual. As there are typically four categories in which you can focus your SEO (technical, onsite, Link building, and content marketing), it is crucial that the ROIs of these categories be explored prior to committing to spending money within them.
Factors that determine your ROI
Let it be understood that your ROI on your search engine optimization is a prediction of the success of the SEO. It is not a definitive result as the data will vary on every cycle. This being stated, those which treat their websites as living things rather than static pages (regardless of the level of User engagement within the page) will have more appropriate predictions. Typically your SEO will pivot around the rankings and the traffic to a specific site.
How to calculate your ROI
To determine this use the formula:
Traffic = search volume * Click Through Rate
This formula does require a bit of research as you will need to know where to get the CRT of the keyword that you using. For example: If you are in a number 8 position then you are apt to have a CTR% of 3.1% Now, let us say that the keyword gets 10,000 searches in a month. The formula would look as this:
Traffic = 10,000 *.031
The 310 in this formula is the amount of people that actually look at your site. It is not the profit that you get from that site. Also, keep in mind that depending on where you get the information about a particular keyword will have a great deal in determining your ROI (an example would be that one site says finance gets 8000 searches and another gets 10000). It is not an exact science, but you can get a fairly accurate estimation of the return on your search engine optimization fund allocation.
To determine the profitability from the traffic you will need to add this traffic number to the percentage of secured clients and the profit. For example: if out of the 310 you have a close rate of 4.8% with your clients giving you an average of $500 profit per close. This would mean that:
(310*.048)*500 = monthly profits (in this case $7,440)
I would go a step further than most ROI tests on your SEO and divide the total profits by the number of categories in which you spend money on your site’s SEO. If you equally allocate the profits to the 4 sectors then your funds would be $1,860 per section.
How this data can help your SEO allocation to boost your ROI
Obviously, you have to adjust the CTR and the variables as the words and the rankings for the search position change. This is where you will determine the ROI of a particular sector. If you add link building to your SEO strategy that can boost you from the 8th position to the 5th then your CTR% will be greater and the ROI will reflect this. Per our example the change would be from 3.1% to 6.1% resulting in a profit increase of $7,200 from a traffic increase of 300.
Finding problem areas
ROI analysis is intended to find the areas which are strongest and those which need to be strengthened. In most cases, you will find that the backlinking, link building, and keywords will determine a great deal of the ROI. However, do not neglect to do ROI tests on the technical fixes, upgrades, and shared/promotional building of your site. Specifically, canonicals URLs and content needs to be fixed to boost your SEO. Data and documentation that is considered duplicate content will be ignored by search engines. Understandably, if you fix the canonicals the keywords on your page will increase and the position of your site will increase, boosting your CTRs and overall ROI.
Understand that it is a tool
ROI analysis on your SEO is a tool to help you determine what is working and what is not working. If you find areas that are weak then you will need to re-strategize your way of doing SEO. Keep in mind that SEO and your ranking will not change overnight. Most ranking and SEO systems (at least all that I can think of) use a cycle system. This means that although you may have reallocated your funding to boost the positon on SERPs, you may not see the results for weeks or months. Furthermore, if you have great ROI on your SEO now, continue to perform analysis on your strategies, your webpage should be constantly maintained and optimized to keep the highest CTR%.