How to Quickly Calculate the ROI of SEO

We often get asked how we can quantify ROI from an SEO campaign. And, here’s the thing, a lot of digital agencies who run SEO programmes don’t really want to tell you, for obvious reasons I guess. Putting a monetary value against something which, to the uninitiated customer, is like the dark arts frames any SEO activity in fairly binary terms; does it work or doesn’t it? We take a slightly different view. Our focus is on making a customer more money online be that through their eCommerce store or leads to a service, and if we can’t do that, we’re doing something wrong, so we always want to make sure we do things right.

Back to brass tacks – why bother with SEO?

As we’re immersed in what we do (its fine, we enjoy it), we sometimes lose sight of the fact that some people might not really see the benefit of optimising their website for natural search. There are two very compelling reasons 1) Many organisations suggest that around only 30% of users click on ads and 70% prefer to click on organic or natural listings. This number varies by demographic and campaign vertical. 2) Google ads can be very expensive especially in competitive markets like financial services, so an organic presence will reduce the amount of money you will ultimately need to spend.

So how do I calculate the bang for my SEO buck?

These metrics are quite crude but hopefully are indicative. Firstly let’s look at the paid versus natural search split. If it costs you £2 to acquire a user from PPC, and only 30% of people click on ads the chart below may be eye opening.

measure roi from seo

In the fictional scenario above to acquire the number one term in a paid ad would require a monthly budget of £11,800. The organic listings would generate significantly more traffic and be extremely more cost effective (even at the upper end of an SEO agency or consultants fees).

To put things extremely crudely you could say that the value of SEO activity (that works of course and ranks your site highly in organic listings) is at least 70% more effective than PPC and that is WITHOUT any advertising budget being taken into account.

Why bother with PPC then?

There are many reasons why you should run PPC campaigns. Firstly, if say, financial services are competitive for PPC – they’re going to be competitive for SEO. Good quality, white-hat SEO takes time as ranking a site highly in organic search and is based on a myriad of factors.

Secondly, the 70/30 split is a blended average and in some industries and demographics the numbers could skew the other way in terms of organic or paid traffic being the predominant driver of traffic.

Thirdly, PPC is not just text ads. For eCommerce stores, Google Shopping is becoming a key way to display products in the new digital shop window. Similarly, the Google Display Network can allow you to target customers via display ads; all using the Google AdWords infrastructure and their cookie based targeting.

One size doesn’t fit all

We, as an agency go to market on the fact that each client is different and one approach won’t work for all. As we have talked about at length before a digital strategy never really ends but is a constant process of refinement that is predicated on constant iteration. This is why we wouldn’t recommend any particular type of digital engagement mechanism until we have got to know you and your business first.

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