Unpacking the ROI of SEO

April 19, 2017 Dylan Brooks


unpacking the roi of seo title image


If 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 is 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

Let’s start by defining exactly what ROI is. It all starts with a simple math calculation.

ROI =  revenue - cost x 100


At first glance, SEO should yield a high ROI. There are no built-in costs, as you don’t have to pay a media company for a TV ad spot or an internet ad click.

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

Marketing channels with a robust ROI generally boast strong performance across two variables:

  • Cost
  • Time

If you know these values upfront, you can project ROI.

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 and the billboard message has been pulled down, 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 for a certain timeframe. But SEO requires you to earn it. If consumers don’t trust you or believe in your brand, search engines won’t either.

As in the physical world, there is no magic timetable to earning trust online. Many tactics can help 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. This is challenging because search marketing has an extended buying cycle. And that buying cycle often intersects with other channels.

Google describes this cycle well in its Micro-Moments model of search behavior. The model states that 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 that someone entering an I want to know search might not be immediately valuable to your bottom line. But that searcher could visit your site, find the answers to their questions, and later come back and buy a policy. They could also take note of your branding during that initial visit, and then later click on a banner ad and buy a policy.

In both of these scenarios, SEO played a role in getting you that revenue. But if you don’t consider the context, you might not give the search channel proper credit for the transaction. And your ROI will appear lower than it really is.

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 these searchers 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 get to that point, your site 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 for important terms consistently, 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 that 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. Call us at (800) 383-3482 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 an MBA from Southern Methodist University. Dylan has extensive experience with writing, strategy and marketing analytics. In his spare time, Dylan enjoys cooking, participating in 5K races, and spending time around Dallas.

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