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Our Easy Guide to Calculating ROI for SEO

You may think it’s near impossible to demonstrate the profitability of SEO optimisation, but it’s a case of maths. As a digital marketing agency, we understand the importance of showcasing you are making a profit. While allocating the correct resources for SEO optimisation takes time and a sheer amount of effort (we should know), it’s easy to see a return. We’re explaining some of the logic that goes into the thought process of our SEO strategy, and whether it is worthwhile for your business.

Establish your current traffic value

calculating roi with seo

Your first step should always be to analyse your current position and traffic value, with the aim to improve. Every keyword (the search terms people are using in Google) that drives the correct people to your site has a value. This is the start of calculating your marketing ROI. There are a massive number of keyword research tools available. These enable any man and his dog to track this information in exhaustive detail, thus helping to produce an extensive and successful digital marketing strategy. Subsequently, these keyword research tools are incredibly useful for us digital marketers to measure your rankings, and work to increase traffic. To put the return on marketing investment into perspective, we’ve put together a little example:

For the purpose of this article, let’s say you rank for ‘printed t-shirts’, and that accounts for 12,000 searches annually in the UK. Your current ranking position is 10, which brings in 2.5% of searchers. From these numbers, we can use our ROI formula to calculate the number of visitors to your site each month. We multiply 12,000 by 2.5%, giving us a grand total of 300.

With the number of visitors to your site, we can work out the profit you’re making from these visitors. Say your site conversion runs at 2% (pretty standard within the industry), we estimate around six people will buy a t-shirt out of that 300. Should your average profit for the t-shirt be £10, your profit would work out at £60. If you repeat this process for all of the terms you currently rank for, you are left with value in real profit.

What tools are available?

Thankfully, there are various keyword research tools available for SEO optimisation. One of our personal favourites, coming hand in hand with our digital marketing services, is Ahrefs. Not only do we use this tool to monitor traffic value, but too monitor backlinks from your competitors. From there, we can analyse what terms your competitors are ranking for – and their referring domains – and work to push them out.

What are my next steps?

Marketing Plan

Once we have ascertained your traffic value, we take the next steps for ROI with digital marketing. Firstly, we need to analyse any ‘weak spots’ you may have within your site. When it comes to our digital marketing strategy, ‘weak spots’ refer to low ranking terms. These terms boast such a low position, they bring in almost no traffic. Again, you can do this through a variety of tools available online.

There are many reasons as to why your keywords are not ranking well. For example, technical issues, low site authority and DA will all affect your ranking in the SERPs. As will a lack of cornerstone content feeding to core pages. Taking all of these factors into account, we can say, with relative certainty, that we believe improving the site’s overall traffic by 50% is reasonable (in the case of our t-shirt seller). Now if we were able to calculate that at present the current site generated £100,000 profit before operating costs we can accurately predict the potential. Running the calculations backwards, we expect 12 months to generate an additional £50,000 to the overall year’s profit. As with any SEO agency you work with, you should always have these expectations in place before you begin. However, if your traffic is anywhere near that value, SEO optimisation is well worth the efforts. Even more so as brands move further online.

Running the above calculation on marketing ROI should give you an insight into whether an SEO strategy will benefit your overall profits. If you would like to discuss this further, you can take a look at our SEO services in more detail. Alternatively, get in touch with one of our team through the contact form below.

Chris Ogle
Chris Ogle

With over 10 years sales and management experience and 3 years of search marketing background, Chris brings a unique perspective to delivering clients higher search visibility, and ultimately sales leads to deliver revenue. Chris's primary focus is identifying the opportunity from the data and breaking it down for our clients in real world language that anyone can understand. When Chris isn't helping his clients on their digital strategy, you can find him experimenting with the latest digital trends to discover new revenue streams to add additional value.

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