Are you Winning or Losing the SEO Battle? (What’s your Real ROI?)

SEO Jun 11, 2013

Whether you’re doing SEO for your own websites or for clients, eventually you’ll want to know if all those outreach emails, link building, social media signals, penguins, and blog commenting is really all worth it.

Perhaps you’ve even abandoned SEO campaigns prematurely, as you didn’t notice any significant change or increase to your bottom-line. With the mechanics of SEO being daunting for the uninitiated and rabbit-hole-complex for those of us who know “how to do it”, it’s easy to ignore any talk about return on investment (ROI) for a little while.

But, eventually, you will need to evaluate what you’re doing and either declare it a raging success or dismal failure. In order to even do that, you would need to actually set the criteria for a return on investment (ROI).

Deciding On The ROI Criteria

SEO and analytics go hand-in-hand.

You need to know what keywords are performing by tracking bounce-rates and time-on-site.

You need to know your traffic sources, and where visitors are coming from.

If you’re a blogger (or are in charge of one), you are probably looking for more organic search traffic, pageviews, lower bounce rates, time spent on site, and other metrics that indicate that your site is relevant to visitors. This in turn should also include any type of conversion goal you might have (signup for email newsletter, download a PDF, video, audio, and so on).

If you work with SEO, either for your own projects or clients, then you’re interested in justifying out how all the work you do is adding to the bottom-line in terms of either leads or sales — or both.

Can SEO Really Show An ROI?

Measuring and tracking the ROI of a PPC campaign is pretty straightforward.

In short: you know how much your product sells for and how much it costs to have someone click on your PPC ad that sends them to your website. So if you spend $528 on a PPC campaign for your Snuggies, and you sell $2,679 worth of said Snuggies, then that’s a decent — and clear — return. Well, figuring out the return on investment for SEO is a little bit trickier (but will be worth the effort).

One of the reasons is that, often, there’s no straight and clear path from organic search result to immediate purchase (you can increase the likelihood of that by focusing on long-tail keywords, but more on that in a minute). A visitor might find your site through Google, take a look, but leave without completing a purchase (or converting to a lead, or signing up for an email newsletter, and so on).

Several days might pass before they come back, and then they might come from a different traffic source besides organic search. Or they might just remember your URL and type it in. But there are several different paths and metrics that will lead you to the money (or whatever the goal is). And while the ultimate goal and metric are sales, in order for you to determine how SEO is actually helping you get those sales, you need to measure several different data points.

Google Analytics Is Your First Love For SEO Tracking

To start tracking and measuring the return of investment (ROI) of your SEO campaigns, using Google Analytics to keep track of where your visitors are coming from and what they do, is key.

There are quite a few metrics available to you when you do SEO, and often rankings have become the default indicator of a successful SEO campaign. While they’re great (higher rankings usually means more visibility, which in turn you hope will become more traffic), in order to see an actual return of your efforts and money, simply looking at rankings and traffic is not enough to justify the investment.

If the traffic and visitors you get are not converting, then you’re looking at a negative ROI. Here’s the caveat: you might be generating a good amount of high-quality traffic from the right keywords, but the website might not convert very well. Then the problem is conversion, and not poorly done SEO. While this may be true, there are things you can do to cover your bases to justify the SEO investment.

Define Your ROI Goals

The most fundamental but critical component is actually defining what your goals are. Once you have answered that, and know what the mission of your website is, then you will know the key metrics to track.

Are you looking for leads (contact forms)?

Visitor behavior (like pageviews)?

Conversions (sales)?

Using Google Analytics, the two fundamental and basic ways to determine the ROI for traffic sources are Goals Tracking and setting up Advanced Traffic Segments.

Goals Tracking

You will use three types of goal tracking for SEO purposes: standard goal tracking, event tracking, and ecommerce tracking.

You’ll find this under Admin > Profiles > Goals in your Analytics dashboard. Simply add the metric you want, like a URL destination or visitor behavior.

Good for: The most common usage of this is for URL destinations. If you have an email newsletter signup form or contact/lead form, then you should be using a separate “Thank You” page that visitors get sent to. This would be your goal page and URL destination

These are code snippets that you add to links (text, image) and videos. Google as instructions for creating Event tracking codes.

    • Good for: This type of tracking will help you measure and understand visitor behavior on your site. You can track calls-to-action, downloads, clicks for videos, audio, or other types of content.

  • E-commerce Tracking

    • You can find this under Admin > Profiles > Profile Settings > E-commerce Settings in Google Analytics. Make sure you select the E-Commerce Site button. Google has further instructions here.

    • Good for: You can look at transaction failures or success all the way down to a keyword level (what keywords are linked to the most sales — or lack thereof). This will help you understand your organic traffic and help you narrow down on what is working.

 

Advanced Traffic Segments

These segments are filters that allows you to separate traffic and distinguish what sources are sending visitors to your website.

This is crucial for accurately tracking the ROI of your SEO campaigns — if you don’t know where traffic is coming from, you don’t know what sources are working and which are profitable. You will find the “Advanced Segments” section under the “Standard Reporting” dashboard in your Google Analytics account. Google has a few segments already created but you can make your own by clicking on “+New Custom Segment”. What your website goals are, and your business model, will determine which segments are most important and relevant. As a basic setup, you will want to create an organic traffic advanced segment, which will show you true organic search traffic (without those searching using your brand or name).

And as you keep track of organic search traffic, you’ll start to see the power of long-tail keywords and how they fit in with your SEO campaigns.

 

How Long-Tail Keywords Can Help Increase Your SEO Campaign ROI

Searchers who use long-tail keywords show more intent and with the right terms, they will also display commercial intent. You will often find that searchers who use long-tail keywords are further into the buying cycle, and more ready to buy now, or soon. More general “head” terms are most likely used by those who are doing research and are at the beginning of the cycle, and are not ready to buy just yet. People will usually start off their search with general search terms when doing their research and looking up information. As they continue to learn more about what they want, their searches get more specific (long-tail). This is why ranking for long-tail keywords can be more profitable and easier to rank for (depends on your competitors and industry). This is important to know as you’re figuring out the ROI of your SEO campaigns — and it should give you an idea of what you can do, right now, to actually boost the return of your investment (hint: making sure you know what relevant long-tail keywords and terms you can capitalize on).

Here are 4 reasons why long-tail search terms can help increase ROI:

  1. Matching Consumer Interest

    1. Specific and more detailed keywords will tell you what the potential visitor is looking for. General terms like “hats” would display a low level of interest, whereas “beaver hats for men” is more targeted and tells you more about the level of interest, and “mens beaver hats sale” would probably indicate a high level of commercial interest.

  2. Indicates Funnel Location

    1. Often, the length of the keyword can determine where the searcher is within a sales funnel. If someone is in the awareness stage, they are most likely to be using short search phrases and they’re probably looking to gather information. When someone is using long-tail keywords, it is a strong indicator that they’re already familiar with the brands and products available, and they’re close to making a purchase. By ranking for the relevant long-tail keywords, you are more likely to connect with those who are ready to buy.

  3. Less Competition For Long-Tail Keywords

    1. You will most likely find it easier to rank for long-tails that are 3-5 words deep, than those general 1-2 word phrases. Also, Google sees new keywords and search phrases come up every day, that they’ve never seen before, so keeping on-top of the long-tails in your categories and related search terms can help you rank quicker for keywords that show a clearer intent from the searcher.

  4. Capture More Traffic

    1. When you put together your keyword list for what you want to rank for, the greater amount of search volume for your categories could come from those long-tails. They might each individually only have a few hundred searches (or more, or less!) but the money and effort invested to rank for a long list of them can still be lower than if you were to compete with everyone else for the more general terms — and you would capture higher quality traffic and a high amount of searches.

 

How To Actually Calculate The ROI

As you can see, there are far more components to tracking and measuring the ROI of your SEO campaigns. SEO will need to be tightly integrated with analytics and tracking traffic beyond just the initial visit to your website. There are several formulas floating around for how to, mathematically speaking, calculate the ROI. The most straightforward one is this:

So, if an SEO campaign costs $5,000 to implement and run, but brings in $12,341 in revenue, than a quick calculation will give you about a 147% ROI ($12,641 – $5,000 / $5,000).

The crucial point is, though, to tie your SEO activities as closely as possible with visitor behavior and actions on your website. Tracking the right metrics and using long-tail keywords will form the foundation for a successful positive ROI for any SEO campaign.

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