SEO ROI Calculator
How Much Should You Spend on Organic Search?
The best place to hide from your customers is the second page of Google. The search engine of all search engines processes an average of 40,000 queries every second, and if the keywords and phrases your customers are looking for don’t show your site as soon as they hit “search,” chances are they won’t find you.
That’s why investing in SEO is so important for businesses of all sizes—it can help you get noticed and increase your visibility online.
But that doesn’t mean that all your SEO activities will pay off. To make sure that you’re making the most of your SEO efforts, you need to calculate their return on investment (ROI) and ensure that they’re helping you make more money, not throwing it away.
Of course, comparing the cost of SEO to the actual ROI you’ll get is really tough, especially if you don’t know much about the subject. That’s why helping you understand your potential ROI from your SEO investment is one of the first steps in our process.
By Nick Dyer, SEO Analyst
Nick started his SEO journey in 2017. Currently, he resides in Austin, TX. When it comes to his SEO experience, he’s worked with million dollar brands and builds his own affiliate websites in his spare time. One of his greatest passions is travel and trying new foods. He’s been to Italy, Spain, Australia, Greece and more
What is SEO?
SEO stands for “search engine optimization.” It’s the practice of making certain changes to your website (or creating content) to make sure that it ranks well on search engine results pages (SERPs). These changes can include anything from optimizing images and meta tags to writing relevant blog posts.
SEO targets unpaid traffic, meaning you don’t have to pay for each click or impression. The goal of SEO is to get as much organic (unpaid) traffic to your website as possible, which then leads to more conversions and increased sales.
How Do Search Engines Work, Exactly?
Google’s algorithms are wicked smart. They understand what kind of content is out there, who’s looking for it, and how relevant it is to the user.
We could drone on and on with technical jargon, but here’s a basic overview:
1. The end user creates a search query.
When you look for a product on Google, what do you type into the search bar? Most likely, a few words that describe what you’re looking for.
For example, if you’re looking for an affordable new laptop, your search might look something like this:
“Laptop under $500.”
Google will then generate however many clickable results it thinks are the most relevant to your search query.
For broad searches (e.g., one keyword search like “SEO ROI”), you’ll get tens of millions of results. If you type something specific, such as long song lyric quotations, it will generate fewer results.
2. Google pulls content from an index.
When Google returns a page of search results, it’s actually sorting through billions of websites and web pages to find the ones that best match what you’re looking for. This is called “indexing.”
Indexing is the process by which the search engine crawls through web pages to find relevant keywords and phrases that match a user’s query. This data is then stored in an index—a collection of information that helps Google quickly locate websites related to what a user has searched for.
So, when Google shows you a specific number of search results, that is the number of indexed pages.
The indexing process starts with search engines knowing what your site is all about and the most relevant places it should appear. That’s why SEO is so important—it helps search engines understand what you’re offering and where it should rank among other sites.
3. The content is sorted by relevance.
Once your site has been indexed, Google will use algorithms to determine which pages are the most relevant for a particular query and rank them accordingly. Hundreds of factors impact this, including page titles, headings, content quality, and the amount of time users spend on the page.
These signals help Google decide which results to show first, second, third, and so on. And the higher a page ranks in search results, the more likely it is that people will click through and visit that site.
If you were to search Google for a “link building agency,” for example, it would show our home page on the second page. All things considered (i.e., our recent name change, the high competition for this keyword), this is a great start!
Google has read our content (like this blog) and determined that it is among the most relevant for the search query.
Why is SEO Important?
Of course, there are thousands of link building agencies. We have lots of competition, and it takes long hours of hard work and dedication from our team of SEO specialists to grow organically.
But because we continuously invest in SEO, our monthly search volume is steadily increasing, right along with the number of inbound leads we get. This is the power of SEO—it’s a long-term investment that pays off with time and effort.
Every company faces the same reality—thousands of others are competing for their own respective market share. And since almost nobody clicks anything past the first page, the higher you rank, the more customers you get.
That’s why SEO is so important—it increases your visibility and helps you reach potential customers who are actively searching for what you have to offer.
And with our proprietary SEO ROI calculator, we can show clients approximately how much money they can make from investing in SEO monthly.
What Goes Into SEO, Exactly?
SEO is an abstract and iterative process, made up of many different elements that work together in unison.
At its core, an SEO strategy is made up of five basic elements:
- Keyword Research: Identifying the keywords and phrases that best represent your business.
- On-Page Optimization: Making sure each page of your website contains the content, meta tags, and other elements necessary to rank in search engines.
- Off-Page SEO: Building relationships with other websites to gain backlinks, increase your domain authority, and drive more organic search traffic.
- Technical SEO: Ensuring that your website is properly coded and optimized to ensure search engine bots can crawl and index it.
- Content Marketing: Creating content that will engage your target audience and help you rank in search engines.
Usually, an SEO campaign will start with keyword research, technical SEO, and on-page optimization, followed by link building services and content marketing.
Why Calculating ROI is Important in SEO
Have you ever heard the phrase, “you can’t manage what you don’t measure?” It applies to SEO too. Before you start paying for SEO campaigns, you need to know exactly how much money you’re investing and when you can expect to see returns on that investment.
There are several benefits to keeping tabs on your SEO ROI.
1. Track your progress and identify areas of improvement
SEO comprises numerous activities, and each has its time and place.
Tracking your SEO ROI helps you identify which activities are producing the best results so that you can adjust your strategy accordingly. It also helps you understand when to invest in different strategies to maximize your financial return.
2. You can spot trends in search volume, website traffic, and conversions over time.
By looking at your website’s Google Analytics data, you can spot trends in search volume and web traffic over time. This helps us measure how effective our SEO campaigns have been and which tactics are driving your conversion rate.
When you look at your SEO ROI, you will have a better idea of how much revenue is coming in as a direct result of your campaigns. This helps you identify which blogs, keywords, and SEO activities are driving the most revenue for your business.
3. You can measure the impact of new SEO improvements.
We love Google Analytics—it gives us a comprehensive overview of our website traffic, including organic search queries and referrals. By leveraging this data, we can easily identify which pages are performing the best, where potential customers are coming from, and what content is resonating with them.
But knowing your website metrics isn’t enough. You need to monitor how much new revenue is coming in from your uptick in organic traffic and leads if you want to understand the impact your SEO campaigns have on your bottom line.
4. You can prioritize tasks based on the expected return they will bring to your business.
When you know how much money your SEO campaigns are making and which activities are producing the best results, you can prioritize tasks based on their expected return.
If you’re building links to one page on your website and it’s not producing the results you expected, but another page jumps in search rankings and converts tons of leads when you link to it, you might decide to focus more of your efforts on that page. Calculating SEO ROI is the only way to do this.
5. You can budget for other marketing activities more effectively.
When you measure your SEO performance metrics against your overall digital marketing strategy, you’ll have a clearer vision of how much you should invest in each type of marketing activity.
Without any knowledge of whether or not SEO is giving you a positive ROI, you won’t know whether to double down on your SEO efforts, rework your strategy, or invest in other marketing channels like paid search, content marketing, or email.
Why is it Hard to Calculate SEO ROI?
SEO costs aren’t always transparent. Because it’s so abstract, SEO can be hard to quantify. How do you measure success when your efforts don’t guarantee immediate returns?
Plus, if you’re doing SEO in-house, it may be difficult to know how much time is being spent on each task and to track progress.
Several things make SEO ROI calculation difficult:
- SEO doesn’t yield immediate results. Since it requires a seemingly large upfront investment of either time, money, or both, many businesses feel like they’re throwing their budget at something that won’t generate anything in return.
- SEO goals aren’t always realistic. Without proper research and planning, it’s hard to set realistic goals for SEO. For example, leads and sales depend on search demand. If you’re in an industry with low search demand and low customer lifetime value, SEO probably won’t be worth the investment.
- It can be difficult to attribute revenue to SEO efforts. Conversion attribution isn’t as straightforward as you think. Sometimes a customer will make multiple touchpoints throughout their journey before buying. If they click on an ad, find you on YouTube and then land on one of your blog posts through Google, you can’t accurately attribute 100% of the sale to SEO.
- SEO doesn’t fix other business problems. Driving organic visitors to your website won’t fix a bad product, a lackluster service, or a landing page that won’t convert. If you want to increase metrics like average lifetime value of a customer and conversion rates, you need to evaluate whether or not those problems are symptoms of a larger issue.
We use an SEO ROI calculator to navigate these common issues. An SEO ROI calculator helps us show what’s possible for our clients, understand where the money is going, and calculate ROI so they can understand their investment in SEO.
How we Calculate ROI at Linkflow
Our SEO ROI formula is based on inputs and outputs. The inputs are your business metrics and data points, such as the cost of your SEO campaign, conversion rate, and the percentage of people who click on a website based on its rankings.
We track the following inputs:
- Conversions: We use your lead conversion rate, sales team close rate, and yearly customer value to evaluate your business’s current performance.
- Costs and Link Velocity: Our cost per link, cost per word, monthly retainer cost, and links per month inputs show you the total cost of working with us
- CTR Curve: The CTR curve is the percentage of clicks that each position on page one will receive. This tells us the percentage of total value you will receive from each position.
Then, we multiply the organic search volume of your target keywords by the respective number on the CTR curve, giving us your estimated number of clicks for your respective position.
We multiply your expected number of clicks by your sales team close rate to determine the number of sales you can expect from your leads, assuming your site is conversion-optimized.
Based on your average annual customer value, we can determine the total annual revenue per lead.
Finally, our SEO ROI calculator compares SEO costs with the CPC dollar value, and the ROI estimate is the resulting percentage of increased revenue from SEO.
Key Assumptions When Calculating SEO ROI
When calculating SEO ROI, we have to make assumptions in our model:
- Search volumes are accurate.
- Click-through rates are valid.
- Conversion rates are correct.
- You can rank for the given keywords.
Accurately predicting ROI and traffic is incredibly difficult and as you can imagine not all of those assumptions will be 100% accurate. For example, it’s well known that volume metrics from keyword research tools can be grossly inaccurate.
The calculator is meant to show what’s possible with SEO so the numbers it provides should be taken with a grain of salt.
Frequently Asked Questions
SEO remains profitable, as long as it’s done correctly. The key is to have high quality content that people are actually searching for, optimizing your pages for the right keywords, and using white hat link building tactics to improve your online presence. Using our SEO ROI calculator, you’ll be able to decide if investing in SEO is worth it for your business.
According to the annual HubSpot Marketing Trends Report, SEO is the third most effective marketing channel. Compared to PPC, SEO is much more profitable because it’s a long-term investment, meaning that it will continue to work for you over time. SEO also has a compounding effect—the more search engines like your site, the more you’ll dominate the rankings and the greater your return on investment will be.
Our SEO ROI calculator compares the cost of ranking for your marquee keywords vs the cost of running ads. When you know your customer lifetime value and conversion rates, it can roughly demonstrate the value of SEO to your business.
To make your SEO ROI calculations more accurate, monitor the following metrics:
- Organic Traffic: How has your organic traffic changed over time?
- Conversion Rate: How many of your website visitors turn into customers?
- Organic Conversion Rate: How many of your organic visitors turn into customers?
- Keyword Rankings: Which keywords are you ranking for, and are they improving?
- Backlinks: How many backlinks are you earning, and are they of high quality?
- Average Order Value (AOV): When your customers buy, are they buying more or less of your product?
- Customer Lifetime Value (CLV): How much is each customer worth to your business in the long-term?
- Newsletter Signups: If you have a newsletter, does your web page get people interested in subscribing?