In short, no business wants to invest in a strategy that isn’t driving beneficial outcomes. So, the process of calculating a return on investment (ROI) allows businesses to determine whether a search engine optimisation (SEO) strategy is generating more than is being put into it.
Advertising and marketing budgets need to be justified which is why it is common practice for SEO companies to provide comprehensive reports that justify the spend that has been invested by way of increased search engine rankings, increased traffic and increased revenue. Usually it is the latter of these which is the most complex to track as an association needs to be made between a site visitor and a sale or enquiry that leads to a sale.
ROI in Organic SEO vs PPC
ROI is relatively simple to calculate with paid advertising strategies. As tracking parameters are often attached to paid URLs, advertisers can see exactly how many times each advertisement was clicked on from SERPs. Conversion tracking then allows advertisers to understand how many clicks result in a conversion, which can then be used to calculate the return in investment.
Comparatively, organic SEO is markedly different because visibility isn’t purchased, it is earned. This makes it rather more complicated to accurately determine the investment element of ROI. The absence of tracking parameters and the opaque nature of Google’s algorithm makes it very difficult to determine the exact return your SEO investment is driving.
That being said, good organic SEO strategies will create benchmarks and conversion tracking which allows marketers to measure and trace traffic as it comes into the site in order to establish whether a tactic or series of tactics is working.
ROI on Sales vs Leads & Enquiries
For eCommerce businesses, eCommerce tracking technologies can be used to calculate the precise amount that organic search is generating. Analytics data will reveal everything from conversion rates and average order values to time to purchase.
For service oriented businesses, or those with big ticket products, looking to drive leads, goal values are an indispensable tool for calculating ROI. Goal values can be used to determine how many visitors have completed a pre-order request, created an account, requested a service call, and much more.
Unlike eCommerce where you can easily track your revenue, tracking sales related to enquiries is far harder as there’s no shopping basket at the end; average sale value or customer lifetime value, as well as enquiry to customer conversion rate, must be ascertained. This allows the value of a typical enquiry to be worked out and a monetary value assigned in Google Analytics in order to predict ROI.