Unpacking the ROI of SEO

April 19, 2017 Dylan Brooks

ROI illustration graphicIf you're looking to grow your agency's revenue, search engine optimization (SEO) is your friend.

SEO puts your agency website in front of consumers at the moment they search for your services. This makes it an effective lead generation tool. Plus, SEO can be more cost-effective than other marketing channels.

But this all leads to the big question: What return on investment (ROI) can you expect for SEO?

Unfortunately, the answer is not straightforward. Let's take a closer look at why that is.

What Goes Into ROI

Le's start by defining exactly what ROI is. To paraphrase my colleague Heather Galloway:

ROI = revenue - cost x 100


If you look at this calculation on a basic level, SEO should yield a high ROI

While you might hire staff to handle your SEO or outsource it, you won't take on many costs beyond that. So once your revenue surpasses those costs, you'll see positive ROI.

But how long does that take to happen? This is where things get tricky.

The Unknown

If you know these values up front, you can project ROI:

  • Cost
  • Time

For instance, if you buy ad space on a billboard, you know how much it will cost and when consumers will see it. You can factor in how many vehicles pass the billboard each day and how many drivers are likely to respond to it. Then, you can use these estimates to benchmark what the ad's ROI should be. Once the campaign is over, you can see if the ROI met expectations.

This type of analysis won't work with SEO, though.

Why? Because time is a giant unknown in search marketing.

Other channels allow you to buy your audience';s attention at a certain time. But SEO requires you to earn attention over time.

Google follows consumer behavior. If a website can earn consumer trust online, they'll get the rankings, traffic, leads and ROI. If consumers don't trust you or believe in your brand, search engines won't either.

There is no magic timetable to earning trust online. Many tactics can speed up the process. But it's impossible to say what return you should expect in a month, or a year. Each website is different.

The Uncertain

It can also be difficult to determine how much of your agency's revenue is coming from SEO. Search marketing has an extended buying cycle. And, that buying cycle often intersects with other channels.

Google describes this cycle in their Micro-Moments model of search behavior. The model states consumers turn to search engines for four reasons:

  • I want to go
  • I want to do
  • I want to buy
  • I want to know
    • The first three types of searches appear to tie in well with revenue generation. The fourth might not.

      But look closer.

      It's true someone entering an I want to know search might not be immediately valuable to your bottom line. But that searcher could visit your website, like what they see, and later come back and buy a policy. Or, they could take note of your branding during that initial visit, and then later click on a banner ad and buy a policy.

      In both scenarios, SEO played a role in getting you that revenue. But you won't report a great return if you don't give search proper credit for the transaction.

      As you can see, calculating ROI can be as clear as mud.

      The Opportunity

      It's easiest to gauge ROI in a cause-and-effect scenario.

      Paid search provides a great example for this. You pay a certain amount when people click on your ad. If they bring in more revenue than the cost of their clicks, you will see positive ROI. But you will need to continue running campaigns and bidding on keywords to see success. Otherwise, your ads will disappear.

      SEO is different. The goal is still to get consumers to click on your search result and bring you revenue. But you don't have to pay for that click. And you don't have to spend as much effort maintaining your campaign.

      Getting your website to rank for relevant keywords can be difficult. But once you do, your website should maintain those rankings for a long time. It will bring in more and more website traffic, and likely more and more revenue. Plus, it can boost other revenue streams, such as referrals or email marketing.

      This means SEO has a backloaded ROI. It might be slim pickings early on, as your agency works to build relevance online. But once your site starts ranking, you can expect accelerating returns.

      So, What Can I Do?

      There's no doubt it's tough to calculate ROI for SEO. But there's also no doubt SEO can be a powerhouse at driving revenue. So how do you ensure you&'re on the right track?

      • Don't give up too early. It can take several months to see SEO results. But once you do, your ROI can skyrocket. Don't pull the plug if you don't see positive ROI after one year.
      • Measure, measure, measure. SEO can impact revenue from other marketing channels. Make sure you give it the proper credit so you can calculate ROI.
      • Consider your consumers. Earning consumer trust online should be your top SEO priority. Do an exemplary job satisfying their needs and positive ROI will follow.

      Stick to these tips, and you'll soon see how effective SEO can be.

      Need some SEO guidance? ITC offers managed SEO services. Contact us for a free consultation.


About the Author

Dylan Brooks

Dylan Brooks helps ITC clients improve the visibility of their agency websites, working directly with them to improve their search engine rankings. Dylan has a bachelor’s degree in communication from the University of Miami, and he is pursuing a masters in business administration from Southern Methodist University. Dylan has extensive experience with writing, strategy and marketing analytics. In his spare time, Dylan enjoys cooking, watching football, and spending time outdoors in and around Dallas.

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