SEO ROI: How to Measure & Forecast SEO Revenue

Let’s be honest: witnessing tangible outcomes of your labor is indeed satisfying. Wondering if your SEO efforts are translating into real business growth? Start measuring your SEO ROI.

In this guide, I’ll share handy tips on tracking the impact of your SEO hustle. Let's dive in!

What is SEO ROI?

SEO Return on Investment, or simply SEO ROI, is a critical metric in evaluating the profitability of your SEO activities. It is crucial anyway, no matter if you're doing SEO for your site or for a client as an SEO agency.

The primary goal is straightforward: assess whether the gains from doing SEO outweigh the associated costs.

If the costs are higher than the profits, it's a warning sign. In this case, you need to reconsider your SEO strategy and optimize your budget allocation for better results.

An interesting fact: according to the research by Search Engine Journal, nearly half of the respondents (49%) claimed that SEO provided the highest ROI among all digital marketing channels.

Factors influencing SEO ROI

SEO ROI is a complex concept, depending on multiple factors. Let’s discuss the main ones:

Market competition

Market competition sets the stage for your SEO performance. If you're operating in a crowded niche, achieving a positive ROI of SEO becomes a hard nut to crack.

Obviously, fierce competition greatly elevates the costs of maintaining a strong online presence.

So, the whole process feels like a strategic (yet costly) chess match. The more competitors you face, the more intricate moves you have to make to outwit them. And the more money you spend on that battlefield.

Conversion rate

Conversions are the holy grail for any webmaster. They determine the effectiveness of your SEO campaigns and bring profit.

However, conversions are impossible without two accompanying factors – SEO-optimized content and high organic traffic.

When your website provides relevant and engaging content, it becomes a magnet for users searching for information, solutions, or products. Statistically, 70% of users prefer to explore services via content. As a result, the website gains increased visibility and drives an influx of organic traffic.

Users who find your content valuable will likely explore your offerings and eventually convert into customers.

The growing number of paying users increases your opportunities for positive SEO ROI.

A strong backlink profile signals the credibility of your website to search engines.

High-quality backlinks from authoritative sources translate into improved rankings, increased trust, and more organic visitors to your site.

And, as I mentioned earlier, high organic traffic fosters a favorable environment for conversions (and, again, positive SEO ROI).

Mobile optimization

StatCounter claims that more than 50% of users tend to browse the Internet via mobile devices, which makes a mobile-friendly website a strategic imperative.

The scenario looks pretty simple.

Search engines prioritize websites optimized for mobile devices. Users get a smooth and enjoyable experience.

If you satisfy the users’ evolving preferences, you’ll likely see longer engagement, reduced bounce rates, and increased conversion opportunities. Not to mention the likelihood of boosted ROI of SEO.

Local SEO strategies

Local SEO strategies can bring tangible benefits if your business serves specific geographic areas. According to Think with Google, 76% of people visit a physical location within a day of conducting a local search.

Let’s say you tailor content to include location-specific keywords or obtain backlinks from authoritative local websites. If done right, your company will appear prominently in local search results and attract a more qualified audience.

As more locals discover your business online, the possibility of conversions rises. And, guess what? So does your SEO ROI.

Why should you measure SEO ROI?

SEO becomes a shot in the dark if you don’t envisage possible outcomes. Here are the key reasons why measuring SEO ROI is a must:

Performance evaluation

Measuring SEO ROI is a powerful instrument for checking how well things are going.

Through ROI analysis, marketers can pinpoint high-performing SEO tactics. Whether it's tweaking on-page elements or fine-tuning your content strategy, you can rank your activities in terms of relevance and profit.

Such evaluation of strengths and weaknesses fosters continuous improvement. And it’s crucial in a competitive marketing battlefield.

Successful budget allocation

What is the goal of a marketing budget? Ideally, every marketing dollar should be channeled into tactics contributing to a fruitful outcome.

SEO takes one of the biggest shares of the marketing budget pie according to the research by Search Engine Journal.

What does it have to do with SEO ROI?

By figuring out strategies that truly work, you can put your marketing money where it matters most.

This targeted approach ensures that your budget decisions aren't just guesswork. They are based on a precise understanding of where the investment brings the most significant returns.

Demonstration of value to stakeholders

Executives usually seek assurance that every strategy aligns with the bottom line. So when you're out to prove how essential SEO is, numbers become your best buddies.

At this point, SEO ROI becomes a tangible representation of how your work contributes to the company's financial success.

This clear picture of value breeds a sense of accomplishment and motivation, bringing teams even closer to those big, exciting business goals.

Challenges in predicting SEO ROI

Several pitfalls can turn the calculation of SEO ROI into a challenging quest. Let’s discuss them because forewarned is forearmed.

Search engine algorithm updates

Google frequently changes the way it’s indexing and ranking websites. And sometimes, it takes a while to catch up with the latest updates.

Nine significant Google updates occurred in the span of just one year in 2023:

If your SEO strategies are slow to adapt, the lag in implementation can blur the immediate impact on ROI.

Case: Google implements a massive update that causes fluctuations in rankings.

Picture this: your site's cruising along, and suddenly, an update hits, knocking your rankings (and conversions) down. Now, you have to quickly figure out what caused the problem and adjust your efforts.

But here's the kicker: it might be about something other than your ongoing SEO efforts.

The dip in rankings could be due to the algorithm shake-ups that are beyond your control. These uncertainties add a layer of complexity when you're trying to estimate the ROI of your SEO efforts.

Rapid shifts in user behavior

Online habits are like fashion trends – they change based on what's cool and new. Such shifts in preferences can cause a mess in important SEO metrics like click-through rates, time on site, conversion rates, and, subsequently, ROI.

Case: Users may check only featured snippets in the SERP.

Take, for instance, the cool addition of featured snippets in the search results. When search engines introduce those concise highlighted answers at the top of the SERP, it changes the game.

Predictably, users will find quick answers directly on the search results page, without browsing a specific website.

The tricky part? If users decide to hang out less on your website, it affects the traditional engagement metrics.

With the impending wave of changes driven by Google's search generative experience, we anticipate further evolution in user behavior. This innovative approach, fueled by AI, can potentially introduce even more ways users interact with search results.

Conversion attribution

Today's customer journeys can have too many steps. Therefore, determining conversions that come exactly from SEO efforts is quite difficult.

Case: Users can convert into customers from multiple marketing channels, not necessarily because of your SEO efforts.

Consider a comprehensive marketing mix, involving various channels such as social media ads, email campaigns, and more.

As customers pass through these touchpoints, each interaction adds a layer of influence to the eventual conversion.

In this marketing funnel, SEO becomes just one element. Trying to isolate its impact on conversions and ROI is not always precise.

Emerging technologies

Calculating the ROI of SEO can be complicated with the rapid evolution of technology. New digital marvels, like voice search and artificial intelligence, reshape how people interact with search engines.

Case: Users now prefer voice search over traditional typed searches.

More users opt for the convenience and ask questions out loud. According to Forbes, a surge in voice search queries can reach 2 billion per month in 2024. And around 50% of people use voice search to find products and services.

This shift requires adapting your SEO strategies to the new reality and experimenting with spoken queries.

Since understanding how well SEO works in this talkative environment takes time, it becomes trickier to calculate the ROI.

Competitive landscape

Changes in market dynamics introduce uncertainties. You never know which move your competitor will take next and how this move will affect your positions.

Case: A competitor leveraged effective keyword optimization and overtook you in the SERP.

Imagine a scenario where you have a top-performing article that regularly brings you conversions. However, a competitor suddenly changes their approach to keyword optimization.

Before you know it, they've taken over prime spots in the search results, and you see a drop in conversions.

And when you try to figure out how well your online efforts are doing (as well as your SEO ROI), it gets uncertain.

Are your moves not working, or is it just that their new strategy is effective?

It's like playing a game where the rules change unexpectedly, and you're left figuring out the best way to keep up.

How to measure SEO ROI?

The formula for SEO ROI is much like calculating ROI for any other investment:

Now, let's break it down step by step:

Step 1: Measure the value of your organic conversions

There may be several scenarios when it comes to measuring your revenue generated through organic search.

Scenario 1: You have direct sales on your website.

In your Google Analytics account, click the Reports icon on the sidebar. Then, in the Engagement dropdown, choose Conversions.

The Conversions dashboard may differ from one business to another, depending on your setup and event names. In our example, we’ll head to the Purchase section.

After clicking on the event, you’ll see all marketing channels that brought you purchases in the Default channel group section.

Since we’re interested in the organic conversions value, find the figure indicated in the Event Value column. The sum of $43,487 will be used in our formula.

Scenario 2: You don’t have direct sales on your website.

If you don’t directly sell products or services on your website, measuring the value of organic traffic can be tricky.

But you can still track the value of actions that contribute to your success. Just set them up in Google Analytics.

For instance, you take file downloads as conversions. In this case, you need to assign a file download as an event in Google Analytics.

To do that, click the Admin gear in the bottom-left corner and head to Events.

Then click the Create event button and create the needed event.

Once done, it will be displayed in the Existing events dashboard. Here you need to toggle the switch to Mark as conversion and voila – now you can find the event in the Conversions tab in Reports.

But we're not done yet. Now you need to assign a value to this conversion. For that, go to Admin > Events and choose the specific event you want to modify. In the Parameter configuration, click Add modification. Then, specify a currency and an estimated value and click Save.

How to calculate the monetary value of an event?

If you have difficulties determining the monetary value of your event, use the formula:

Customer Lifetime Value (LTV) x Lead Conversion Rate

LTV is the total amount you expect a customer to spend with your business during the entire customer relationship.

To calculate LTV, click the Explore icon on the sidebar in Google Analytics and select the User lifetime exploration template. Google Analytics will instantly generate a report with metrics, including LTV: Average.

Lead conversion rate is a metric that measures the percentage of potential leads that actually become customers. To calculate this, you need to divide the number of converted leads by the total number of leads. This quotient is then multiplied by 100 to express the result as a percentage.

For instance, a customer’s average LTV is $3,000 and your close rate is 18%. This means that the monetary value of your event should be $540.

Certainly, these calculations involve making some assumptions. But this method helps to at least roughly determine the value of organic traffic, given that your website heavily relies on downloads as the primary conversion source.

Step 2: Estimate the cost of your SEO investment

Determine the cost of your total investment in SEO in a chosen period. This may include various elements such as:

  • salaries of in-house employees
  • fees of freelancers/agencies (if any)
  • costs of SEO tools and software
  • costs of content creation (copywriting, design, and more)
  • expenses related to link-building activities
  • costs of analytics and reporting tools

Your SEO investment costs may fluctuate monthly, and that's perfectly normal. Just make sure to account for any changes when evaluating your SEO ROI.

Let’s assume that in a given month, your SEO costs are $9,543.

Step 3: Do the math

We have to put the figures in our formula:

SEO ROI = (43,487 - 9,543) / 9,543 = 3,55

This indicates that you achieved a return of $3,55 for every $1 invested in your SEO efforts.

Now, you might be wondering if your SEO ROI is good enough.

Well, there’s no one-size-fits-all answer. The optimal value for SEO ROI is subjective and varies based on factors such as the nature of your business, the niche, the level of competition, etc.

A good SEO ROI means that the revenue generated from your SEO efforts surpasses the costs associated with those efforts.

As such, if your ROI is positive, your current SEO strategy is contributing to the growth of your business. Congrats and keep up the good work.

Alternative ways to predict SEO revenue

In case you need a rough estimate of your potential SEO ROI, you may consider alternative perspectives:

Approach 1: Analyse your past performance

This step requires Rank Tracker. You can download it now for free.
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By recognizing historical patterns, you gain insights into what worked and what didn't. With traffic trends at hand, it’s easier to predict the impact and potential revenue of future strategies.

To swiftly assess your historical rankings, navigate to Rank Tracker and jump into the Domain Analysis dashboard.

Download Rank Tracker

Here, explore your website’s ranking history, including the dynamic data on your organic traffic, its monetary value, position distribution, and keyword count. You can check the reports for 1, 3, and 6-month periods.

For instance, you can correlate spikes in monthly organic traffic and its value with specific periods of SEO activity.

Understanding which strategies contributed to positive changes will help you predict the traffic potential and ROI of similar initiatives.

Approach 2: Explore competitor benchmarks

This step requires Rank Tracker. You can download it now for free.
Download Rank Tracker

Conduct a competitor research of your niche and discover the following:

  • your top competitors
  • their organic traffic trends
  • unique keywords that boost their rankings

Your goal here is to find the correlation between competitor’s organic traffic dynamics and their unique keyword strategy. By collecting all the pieces of this puzzle, you’ll be able to predict how using similar approaches and keywords might positively impact your ROI.

And again, Rank Tracker will help you gather all that data.

To quickly find your business rivals, open the Domain Analysis dashboard and scroll down to Domain Competitors. The tool will analyze your domain against your main competitors and display the data in a handy table:

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Here you’ll see the key insights into competitors’ keyword profiles, including the intersection with your keywords, and their organic traffic.

For a deeper dive, click the Find more button below.

Rank Tracker will take you to Domain Competitors in the Competitor Research module and provide the full list of 100 competitors.

Download Rank Tracker

Tip: To have a full picture of competitors’ historical performance (including the organic traffic value), you can analyze 3-5 strongest domains separately using the Domain Analysis dashboard (as described above in a previous section).

Right in the table, click on the magnifier icon to jump into the Keyword Gap module and view competitors’ unique keywords.

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By doing so, you can explore content areas where competitors excel and add those keywords to your SEO strategy.

All in all, monitoring changes in competitor organic traffic trends over time is a nice practice. It allows you to proactively adapt your strategy and forecast potential impacts on your SEO ROI.

Approach 3: Calculate saved money

This step requires Rank Tracker. You can download it now for free.
Download Rank Tracker

SEO ROI isn't solely tied to earnings; it includes savings, too.

With this approach, you may consider what it would have cost you to generate the same traffic through other means.

Imagine that you decide to use some of your organic keywords in paid ads. To check how much money you’d spend on PPC activities, open Rank Tracker and go to Tracked Keywords in the Rank Tracking section.

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The two columns of our interest are Cost Per Click and Estimated PPC cost/month. Based on this data, you can calculate the budget that you would need for ad bidding.

Consider this unspent budget as a sign of a thoughtful strategy. It maximizes benefits and minimizes costs, contributing positively to your overall SEO ROI.

Final thoughts

Figuring out your SEO ROI is a powerful tool to secure your SEO strategy. In fact, when you have steady dynamics, it’s much easier to scale your SEO activities, invest in new talent, and experiment with more tools.

But remember, it's not just about revenue. Even if your SEO ROI is just a “work in progress”, the money saved is also a win.

Do you have any cool lifehacks for predicting your SEO ROI? Don’t hesitate to share your thoughts in our Facebook community.

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