SEO ROI: Why It’s So Hard to Pin Down (And How To Do It)

The top result on Google receives nearly 32% of all clicks, and 75% of users admit to never scrolling past the first page of results. 

These two statistics alone prove the need for search engine optimization, which is why companies spend more than $79 billion on SEO services each year. 

Without a strong presence in the organic search, companies are missing out on tons of potential revenue, leads, and exposure to new audiences. 

Yet, even organic SEO isn’t free, and convincing decision-makers and stakeholders at your company of its value can be a hard sell. In particular, they’ll want to know that SEO will produce a positive return on investment (ROI) for them. 

As such, calculating SEO ROI is a necessary skill to have, especially for agencies, consultants, and marketers wanting to incorporate it into their company. 

Your stakeholders will want to see a hard bottom line – solid proof that the cost of SEO is worth it, which can be tricky. 

Why is that?

It’s due to the nature of organic SEO, as there’s no direct dollar value tied to it. Also, SEO is notorious for taking a long time to start working, with the general consensus being it takes around 6 – 12 months to start seeing a positive ROI. 

If SEO ROI calculations have you scratching your head, you’ve come to the right place. 

Read on to learn the proper way to uncover the true ROI of SEO. 

The Basic Way to Calculate SEO ROI 

In theory, calculating the ROI for SEO is no different than calculating it for any other type of business. You simply need to deduct the cost of SEO from the revenue you gained. 

Here’s what the formula looks like:

• The value of SEO conversions – SEO costs/SEO investment costs 

Seems simple enough, right? So why is there confusion surrounding SEO ROI?

Well, it primarily has to do with calculating the value of the conversions that you can directly attribute to SEO, as that can get tricky. For the most part, it’s pretty straightforward to determine the total cost of your SEO investments. 

What’s more difficult is determining whether a customer converted due to your SEO efforts or another reason. For example, it may be that a prospect spent weeks reading content about your products that they found in the organic search results. 

Yet, when it comes time to make a purchase, they convert after clicking on a social media ad – which will take full credit for the conversion (despite the obvious attribution your SEO content had on the sale). 

This is nothing new, as attributing conversions to marketing channels has always been a confusing and polarizing issue, but more on that in a bit. 

For now, let’s cover some essential KPIs you can use to come up with the true ROI for your SEO campaign. 

Calculating your SEO strategy costs 

While generating organic traffic through search engines is seen as the ‘free’ way to do SEO (as opposed to pay-per-click (PPC campaigns), the old economics adage rings true here; there’s no such thing as a free lunch. 

While it’s true there’s no direct dollar value tied to ranking in the organic search results, organic SEO is by no means free. Even if you do all the work yourself, there’s still the massive time investment it takes to create and release regular content, make technical SEO tweaks, and conduct keyword research. 

All that SEO work adds up, which is why you need to keep track of your expenses. 

Here’s a common breakdown of the costs associated with organic SEO:

In-house employees 

If your employees handle blog writing, content creation, and other marketing efforts, you need to factor their wages into your costs. 

Besides people directly involved in SEO, don’t forget to include any web developers or designers that you use for image creation/web publishing/technical SEO tweaks. 

SEO agency 

If you outsource your SEO services, you need to include the monthly/annual fees you pay your agency. 

Freelancers

Don’t forget to include the wages you pay any freelance writers, developers, or graphic designers for your content marketing efforts. 

SEO tools

Then there are the monthly subscription fees you likely pay to use tools like Ahrefs or SEMrush. 

To be accurate, make sure to include fees from programs that aren’t specifically for SEO but are still used for it, such as HARO or PR software. 

Link building and distribution

There are also costs involved with distributing and promoting the content you release. Not only that, but if you pay for your links, you need to include those costs too. 

Besides uncovering all your costs, you’ll also need to choose a time for the calculation. If your stakeholders ask for a specific period, do your best to accommodate them. Yet, monthly comparisons don’t work well for SEO, so try to avoid them if you can. 

Determine the value of your traffic conversions 

Now we get to the tricky part, determining the conversions you can directly attribute to SEO. 

If you aren’t already, you need to set up conversion tracking in Google Analytics (GA) or a similar program. Also, ensure the tracker is set to ‘organic’ and not ‘paid’ search results. 

This will provide you with a figure for how many conversions Google believes occurred due to your SEO efforts. Carefully go over each conversion to make sure you can attribute it to SEO. 

Bear in mind that the type of conversions and their values will differ from business to business. 

For e-commerce websites, it’s pretty straightforward as they automatically send sales conversion data to GA. 

Yet, the goal of every business isn’t always a sale. Lead generation businesses, for example, often have a hard time nailing down their traffic conversions, as they aren’t so black and white. For these companies, assigning dollar values to sales-qualified leads can serve as a solution. 

SEO KPIs that convey its value 

Besides traffic conversions, there are some specific KPIs you can measure to prove the value of your SEO campaign. 

Search engine rankings 

Your rankings are arguably the most critical KPI to pay attention to. The higher you rank, the better, and improving your rankings is tangible proof that your optimization efforts are paying off. 

Organic visitors

The number of organic visitors is another way to monitor the effectiveness of your efforts. While more organic visitors don’t always lead to more revenue, they improve brand awareness. 

CTR (click-through-rate)

Your click-through rate refers to how many visitors saw your organic listing and decided to ‘click through’ to your landing page. A high CTR proves that you’re appealing to the right audience. 

Soft conversions

In addition to hard conversions (see above), there are also soft conversions, which usually result in picking up a new lead. 

Examples of soft conversions include newsletter sign-ups, social shares, and downloading content. It’s essential to pay attention to both hard and soft conversions to take in the big picture of your marketing ecosystem as a whole. 

Pages per session

Another SEO KPI is pages per session, which is how many pages a user viewed before exiting your website. 

Multiple pages per session mean you’re engaging with your audience, which is a good thing. 

Organic impressions 

An impression refers to how many times your content showed up in the search engine results. A high number of impressions is excellent for improving brand awareness. 

While these metrics don’t relate to SEO ROI outright, they’re still evidence of its effectiveness, so they’re worth bringing up to stakeholders. 

The value of assisted conversions 

Here’s where it starts to get tricky. It can be challenging to determine which marketing channel scored the traffic conversion. 

Traditionally, conversions were counted by the ‘last non-direct click.’ 

As stated before, it could be that your blog content does the brunt of the heavy lifting, only for a social media ad to take all the credit in the end since it was the closest click to the conversion event. 

Enter assisted conversions, the primary remedy to this frustrating issue. 

This model aims to give each marketing channel its fair amount of credit for each conversion instead of using the ‘last non-direct click method. 

The fact is that visitors will land on your website at all stages of the buyers’ journey, and each piece of content can affect multiple stages of the sales funnel. For example, if a customer is only looking for information at first, your blog content will steal the show. 

With some clever CTAs and product highlights, that can motivate the user to decide to move on to product pages and blogs. 

Then one day, they decide to make a purchase and do so through a retargeting ad, which will receive 100% of the credit for the conversion. Yet, we know that’s not true, as the customer went through an extensive buyer’s journey, all guided by your carefully crafted SEO content. 

So if your blogs aren’t getting any credit for direct conversions, that doesn’t mean they didn’t contribute to the sale. 

That’s why the shift to a data-driven attribution model (DDA) with Google Analytics 4 took place. 

Google Analytics 4 and the data-driven attribution model 

Google’s DDA model uses your existing data for conversion events to attribute a conversion to multiple marketing channels. 

It uses machine learning algorithms to distinguish between conversion paths and non-conversion paths. 

What are those?

A conversion path is a series of touchpoints (ads, clicks, interactions, exposure, and more) that eventually leads to a conversion event. The DDA model will then attribute partial credit to each channel in the path. 

Non-conversion paths are the same, but the touchpoints don’t lead to customer conversion, so the data gets ignored. 

Using conversion paths, the machine algorithm is able to piece together what could have happened that led to the conversion. 

If you’re already using GA4, it uses this data-driven model by default, so the value of your conversions will already have the assists factored into the equation. You can also view an Assisted Conversions Report within Google Analytics by going to Advertising > Attribution > Conversion Paths. 

Here, you can see a detailed breakdown of what Google views as the essential touchpoints for each conversion path. The touchpoints include:

• Organic search
• Referral 
• Email 
• Paid search 
• Organic social 

For each touchpoint, you’ll get to see a graph representing the amount of impact each had on the conversion during each stage of the sales funnel (early, mid, and late). 

For SEO, you only need to pay attention to the organic search for each of the stages to see how impactful it was for each conversion. 

Difficulties of Measuring SEO ROI 

Despite the advancements of the DDA model, calculating SEO ROI still has many gray areas and challenges facing it. 

Here are some of the top challenges you’ll face when attempting to put a concrete number on your return from SEO investments. 

SEO ROI takes a long time to materialize 

Time periods are a tricky issue for SEO ROI due to the nature of the work itself. In today’s age, search engine algorithms have become incredibly complex and sophisticated. 

As a result, tweaks to websites and new content takes a while to materialize in search engine results. New content has to be crawled and indexed, and there’s no shortage of fierce competition out there trying to rank for the same keywords you want. 

In other words, SEO is a long-term marketing strategy, which is why the standard ROI calculation method of comparing investments to monthly gains falls flat on its face with it. 

Since it can take six months or more to start seeing a return, calculating ROI monthly isn’t possible for the first few months. 

The lengthy timeline is a significant factor why SEO can be a hard sell for some, as no one wants to hear that something will take six months to start paying off. Yet, the benefits of SEO are significant once they begin, and they tend to compound with time. 

It has limited testing capabilities 

Running experiments on the effectiveness of SEO is a bit limited in that you can’t test it like you can other channels. 

For instance, if you want to test how effective your PPC ads are, you can simply turn them off for a while and compare your revenue. 

If you stop it for a few months and there’s little to no change to your bottom line, it’s clear that your PPC campaigns aren’t working, and you don’t need to waste money on them anymore. 

You just can’t do that with organic SEO, as removing your website from search engines is not something you can do in today’s age. Not only that, but you’d have to noindex your site for at least six months to see if there’s a change. 

That’s not to say that you can’t run experiments on the effectiveness of SEO, just that they’re more limited than other channels. 

Attribution is flawed by nature 

Even with Google’s DDA model, marketing channel attribution is still inherently flawed, and it’s not just for SEO, either. 

Some go as far as saying that attribution is pointless, as touchpoints are often far more complex than analytical software makes them look. As stated before, one piece of content can have relevance for every stage of the sales funnel for different users. 

As such, it’s near impossible to pinpoint which channel caused the conversion. 

The DDA model is a much-needed advancement in this area, but it’s still far from perfect. For example, there are data from sessions that you’ll never see because the tracking code wasn’t fired. That could be due to an ad blocker, or the user might have bounced before the tracking code got a chance to go off. 

No way to measure retention or the effect of brand-building 

Lastly, SEO metrics can’t measure retention or instances where users were looking for a brand they already knew about. 

On the retention side, SEO content can increase customer lifetime value if they become regular readers. 

Let’s say you regularly blog about digital marketing strategies, and you’ve built up a regular reader base. Therefore, a majority of your blog visits are from your existing customers/readers. While this is a significant benefit of SEO content, it’s impossible to measure. 

Brand awareness is another unmeasurable factor. For instance, if a user already knows about a brand or learned about it elsewhere, SEO shouldn’t get the credit, but it will because they searched for it online. 

The Most Valuable Metric for SEO ROI 

Beyond using the ROI formula to get a concrete number, there’s another metric that’s a more accurate predictor of the success of your SEO campaign – search visibility. 

Using a rank tracker, you’ll get to see the search visibility of your website on a graph. If the line starts moving up a few months after starting your SEO efforts, you’ll have clear evidence that they’re paying off. 

Search visibility is similar to the share of voice, which is a metric marketers use to gauge their market share. 

In addition to sharing your ROI, showing decision-makers and stakeholders your search visibility will also show how effective your efforts have been. 

Closing Thoughts: SEO ROI 

By now, you should better understand how to calculate SEO ROI, as well as the challenges involved with it. 

Due to the nature of search engine optimization, it’s hard to encompass all the impact it has on your bottom line. Technical SEO tweaks, user experience enhancements, and helpful user content all have effects that are hard to quantify yet are definitely real. 

By calculating your traffic conversion values and subtracting your investment costs, you can uncover your SEO ROI. Yet, it’s also a good idea to pair that number with specific KPIs, such as search visibility. That will give your clients and stakeholders a more accurate snapshot of the bigger picture. 

Do you need expert help formulating a winning SEO strategy for your company?

Then don’t wait to check out our excellent managed SEO services at HOTH X. Our seasoned experts will handle every aspect of SEO for you, including calculating your ROI, so don’t wait to book a call today.