If your company is spending money on marketing online, you need a method to be able to determine how much that investment in SEO is going to earn.
This fundamental ROI calculation is actually complicated because search engine optimization is not a 1:1 transaction where you’re directly paying for traffic from Google, like SEM/PPC campaigns, but instead investing money or human resources to creating content, links and an ideal website in order to receive traffic from search engines like Google.
That traffic then converts to a paying customer, either through lead generation and sales or direct eCommerce purchases.
Here’s the process we use for our ROI calculator:
- You input your target keyword, up to 5 in total
- We pull the current 10 urls ranking for those terms
- We uncover the top 100 keywords for each url
- We then pull those terms and de-duplicate but keep an “overlap” number so you can see how many sites “co-ranked” for these secondary phrases, helping you understand how Google sees the relationship between phrases.
- We get the search volume for the terms
- We get the cost per click for each query
- We multiply the search volume by an Organic Click Through Rate value to approximate its potential for traffic when ranked in a particular position. (#1 is approx 26%-32% depending on the query type)
- You provide the conversion rate, so we multiply traffic and search volume to get potential conversions.
- You provide the sales close rate, so we multiply conversions by that value to get potential sales
- You provide the revenue per sale so we can show how much revenue that represents, per month for that phrase.
- We create a “likely” ranking table for ALL phrases, giving REALISTIC goals of ranking 1/8,1/4 and 1//2 of these relevant terms either just on the first page, or in the top 3 spots. This gives you a “good, better, best estimate chart” for this keyword universe.
How to interpret the first row of this ⬆️ data: If you ranked for half of the keywords we discovered, that would be the amount of search volume in C24. We can then predict how much traffic you could get from your site ranking in positions 1-3 in E24. Based on your input conversion rate, F24 is how many leads your site would then generate. G24 is how many leads would then buy your product or service. H24 is how much revenue those purchases would represent monthly, and annually.
Do This ROI Calculation by hand
If you prefer to do this calculation the long way, here’s how to get that estimate by hand, step by step. You’ll need a 3rd party SEO tool for the keyword search volumes, and the organic CTR rate from Advanced Web Ranking.