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By Amine Rahal, entrepreneur and writer. Amine is the CEO of IronMonk, a digital marketing agency specializing in SEO and CMO at Regal Assets, an IRA company.
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Typically, you can measure return on investment (ROI) by subtracting the profit generated by the investment and subtracting its cost. Sounds simple enough, doesn’t it? Well, in the world of search engine optimization (SEO), it’s a little less easy.
That’s because it can be difficult to pinpoint exactly how much of your sales or leads will be generated from SEO alone. It’s also hard to keep track of the cost of designing and executing your SEO strategy.
Given this difficulty, I’ve outlined my formula for calculating and monitoring the ROI of an SEO campaign. As the owner of two full-service digital marketing agencies, I’ve tracked SEO performance on countless customer campaigns for over a decade. After years of success in this field, I thought I’d share my basic SEO analysis and monitoring strategy.
Where ROI meets SEO for e-commerce
For those who specialize in ecommerce, there are specific ways you can track and manage your SEO performance. Thanks to Google Analytics (yes, even in the free version) you can do this relatively easily. I have outlined the basic steps below.
First open your Google Analytics account and navigate to the “ADMIN” area in the left sidebar. From there navigate to the “VIEW” tab and select “E-Commerce Settings” and finally “Enable Enhanced e-Commerce Reporting”.
Regardless of whether you use Shopify or WooCommerce, the next step is to initialize the tracking on these platforms so that the data can be transmitted to Google Analytics. Here is a detailed guide on how to do that. When the process is complete, you can view a number of important metrics, such as: B .:
• Checkout behavior of customers
• Product performance
• Exchange rates
• Average order values
• Sales figures
• Page creation
For our purposes, the last metric, page structure, is particularly important. This is because you know where your customers are from and begin their journey down your funnel. From there, you’ll learn which pages are performing well – and you can assign values to each webpage to see where the SEO results can be improved – and which pages are already doing the best.
Calculating your SEO ROI
A successful SEO strategy depends on posting lots of high quality, well-researched content. In my estimation, you need at least 250 published articles to get your SEO campaign going, especially if you work in highly competitive niches like personal finance or health and fitness.
Let’s say each short article costs you $ 100 to write and publish on your website. That would be the equivalent of an investment of $ 25,000. Now you need to take that number and divide it by the total return on your SEO investments. Let’s say you gained $ 500,000 in traffic over the course of a year based on your SEO campaign. The calculation would go as follows:
1. ($ 500,000 – $ 25,000) / $ 25,000
2,475,000 / 25,000
3. 19 × 100
4.1,900%
Based on the example above, we see an overall ROI of 1,900% on a $ 25,000 investment – not bad at all, I would say. Compared to pay-per-click (PPC) advertising on social networks, such returns are exceptional, but certainly not uncommon.
Find your investment profit
An important part of the ROI formula has yet to be explained: How you calculate your investment return. As I mentioned earlier, Google Analytics is your friend here.
In the Google Analytics UI, check Enable Enhanced e-Commerce Reporting, then navigate to the Conversions tab in the Analytics window. At this point, you can view your organic traffic data and ultimately your earnings and conversion rates that result from your organic traffic.
Since organic traffic refers to all unpaid web traffic (i.e. traffic that is not generated by PPC advertising), we can conclude that virtually all organic traffic revenue is generated by SEO. So I recommend measuring the total return on your SEO investments using your Revenue: Organic Traffic number, which can then be inserted into the formula above.
SEO: your ticket to organic growth
A recent SparkToro study found that 57.8% of all web traffic comes from Google searches, which far outperforms traffic from Facebook or other social media sites. In other words, there is no better marketing channel than SEO to get your website noticed.
In this article, we discussed the basic steps involved in calculating the ROI of an SEO campaign. Whether you’re a marketing manager looking to showcase the fruits of your labor to your boss, or a sole proprietorship looking to assess whether your SEO strategy is working, this is an excellent way to gather the data you need.
Remember that SEO is a long-term investment. It often takes months, if not years, to realize the full benefits of an SEO campaign. However, knowing how to track your ROI and the progress of your campaign will tell you which parts of your strategy are working as expected and which elements may need revision.