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Measuring the ROI of SEO

Lilian

Lilian

3 minute read

Search Engine Optimisation (SEO) is a cornerstone in the area of marketing. People often refer to SEO as being important for your website. For example, you will have better visibility, more clicks, and an increase in visitors. This is in line with the goals of many websites: the generation of more leads. How can you analyse your SEO, and how can you monetise the stream of visitors coming to your website?

Data collection

The first important step is the collection of reliable data. Using this data, you can determine the Return of Investment (ROI) of your SEO strategy. A common way of data collection is the use of Google Analytics. This is a tool that can be embedded on your website and collects data on visitors and their behaviour. You can leverage the following data that flows from Google Analytics in your SEO campaign research:

  • The number of visitors
  • The conversion ratio
  • The number of financial transactions conducted
  • The average value of a transaction
  • The revenue generated

When collecting the data, make sure to retrieve it over a longer period of time. For example, three to six months are sufficient to provide you with a good indication. This will help you get a good overview of your SEO campaign.

Webshop or website

Do you have a webshop and do you want to know the revenue generated from organic traffic to your website? Having e-commerce tracking enabled on your website can help you to gather these insights. By using such tracking, you can easily measure the conversion and revenues for different visitor types. When configured correctly, you can see these insights within your Google Analytics dashboard. Within Google Analytics, you can filter on 'organic traffic' to see the proportion of revenue generated from organic search results.

If you do not have a webshop, the matter becomes a bit more complex. If there are no financial transactions taking place, we need to look at other measures. For example, you can measure the conversion rate of a newsletter subscription or a request for quotation. Within Google Analytics, you can adjust the conversion from a monetary value to a goal. For example, a goal could be that 5 per cent of the visitors that provide their e-mail addresses on your site will eventually become customers. These clients create an average of 20 euros in value, meaning you can account for one euro of value (5 per cent of 20 euros) to the goal in Google Analytics. Similar to webshops, you can now filter on 'organic traffic' to analyse how much revenue is generated based on this assumption.

Analysing

With the calculations in mind, it is time to start analysing. Adjustments in SEO efforts take time before showing effects, this holds for both traffic growth as well as conversions. You should take an average of 100 days (approximately three months). Once you exceed this period, you can start analysing the data that is available to you in Google Analytics. An important element, as stated previously, is the amount of revenue generated from organic traffic. By analysing the Google Analytics report, you can see if you are living up to your goals. You can determine if the assumption of 5 percent of visitors holds true, and adjust your assumption accordingly. You can also analyse how channels compare to each other before and after you started your SEO campaign. This gives you an indication of the ROI of your initiative.

Berekenen

With this view of the ROI in mind, it is time to validate if it holds. However, measuring the ROI of content marketing is difficult, as campaigns take months before leads are generated. To calculate the ROI of your SEO campaign, you can work with the following formula:

ROI = (LTV / CPA) – 1

The concept of ROI has been introduced before. Now let's look at the LTV and CPC. LFT refers to the lifetime value of a customer, meaning the revenue a client has generated over a period of time. CPA refers to the Cost per Acquisition, which indicates the average cost for a prospect to convert to a customer. For this value, it is important to indicate the average percentage of leads with the average CPA value. The average revenue per customer over a certain period? Using the formula above you can easily analyse, calculate and measure the ROI of your SEO campaign.