Before making a decision on investing in a new marketing channel, every business owner always wants an answer to a simple question: what’s the effect it is going to make on their ROI?
The main problem with SEO as a marketing channel is that it can be extremely hard to measure, which may lift some eyebrows with skeptical marketing owners. This is especially true because there seems to be so many myths about SEO (“SEO is dead” comes to mind), plus it can take quite some time for SEO results to kick in, while the costs of it are immediate.
This is why it is important to be in a position to predict the potential ROI that you’d get out of your SEO investment, which this guide will try to explain in detail.
Decide on Your Attribution Model
The attribution model is basically a system that you’ll use to credit one marketing channel or another for users coming to your website, or converting to a customer. Having an attribution model is important for figuring out exactly which channel is adding the most value. There is no single attribution model that works best for all businesses, but you’ll have to decide on one model that works best for your business.
- Single Source: First Touch – With this model you’ll give all of the credit to the first channel that brought you a customer, regardless if they came in touch with other channels afterwards.
- Single Source: Last Touch – Opposite to the first touch, this model will always credit the last channel your customer used. This model will be constantly updating for customers that keep coming back to your website.
- Multi Source: Fractional Attribution Models – You can go with linear attribution model which will equally credit all of the channels that influenced a customer, or with a time decay model which will credit the last channel the most and every older channel less and less.
Determine the Search Volume of Your Keywords
To make any money out of SEO, you have to get more organic traffic first. This is usually done through keyword research, by checking certain keywords you’re interested in for monthly search volume. You can use the Google AdWords tool to search for these keywords in their Keyword Planner. Next, check the Average Monthly Search Volume for every keyword you’ve entered and you’ll get an estimated size of the online search market you’re interested in. For best results, you should always focus on your best selling products / services and the keywords that are related to them.
What’s Your Current Ranking for Certain Keywords?
Clearly, reaching the top of your SERPs will mean significantly more traffic coming your way, so to know exactly where your traffic is coming from it is important to know just where you stand with your current ranking. If you’re on the top of the SERP with one keyword that is not very contested, but fifth with a keyword that is highly contested, you’ll get an idea which one brings you more traffic.
There seems to be many tools you can use to check your Google rankings, and whichever you choose you’ll get the results that you need to copy into a spreadsheet that you’ll later use for calculating your ROI.
Calculate the Traffic You’re Aiming For
You can use Chitika’s study to determine the average CTR (Click Through Rate) for the positions you’re aiming for on the first page. You’ll need it to get an idea about your potential monthly web traffic from search engines, which you’ll get by multiplying the results you got from estimated search volume with the CTR of the position you’re currently at, or a position that you’re aiming for.
So if there seems to be 5000 monthly searches and you’re aiming for #3 on the page, which has about 11% CTR, you can estimate that about 550 visitors will come to your website if you reach that rank.
Estimate Your SEO Revenue
At this point, all you need to do is to multiply your estimated traffic with your conversion rate, close rate, and average sale rate and get an idea about your monthly revenue.
Do not forget to deduct the costs of the SEO services you’re paying for, which will of course differ depending on if you’re hiring the best Search engine optimization company, or a cheaper one, but do keep in mind that the previous results are also dependent on the SEO company you’re hiring. From here, it is quite easy to calculate just how much money you’ll get per month for each keyword you’re ranking for.
SEO is one of the most effective marketing processes today, but it is also a long-term investment, one that may not seem like it is paying off for a while. If you’re looking for instant results you can always go with the PPC campaign instead, which will also make tracking your ROI much easier. However, it is important to note that SEO is much cheaper in the long run, and will get you the results you want if you just stay focused.