How To Calculate SEO ROI
Investing in Search Engine Optimization should be a weighed decision like other marketing expenses. Calculating ROI for SEO can be more difficult than other advertising because costs and returns are often not as concrete, but with some ballpark figures, estimating your SEO ROI becomes a doable task.
Before considering an investment in SEO, you should consider the payoff. If there’s not much potential for payoff, there’s no reason to make an investment. Calculating your potential return will also help you determine how much you should be able to invest in SEO dofollow backlinks.
The first question you’ll need to ask is where your revenue stream will be coming from. Are you getting AdWords clicks to generate income? Do you have a product you’re selling online? Are you promoting a service to try to get new clients? Next you’ll need to find out how much traffic you anticipate getting after your site is ranking in the search engines. There are tools that make estimating traffic for a search term easy. Keep in mind that the majority of the clicks from a search go to the top 3 results.
Finally you’ll have to tackle the most complicated part of the return calculation and estimate the number of people who are likely to follow through and become “customers”. For Adword clicks, around 1-5 percent will become customers by clicking on the ad. When selling a product or service, the number of consumers that convert to customers will largely depend on your industry as well as how well your site sells the product.
Pay Per Click advertising is one of the quickest ways to start showing up in search results. It’s a great place to start because the initial investment is low. After investing $100 into your account, you may be able to get a feel for how effective your ad and landing page are.
Unfortunately, PPC is expensive in the long run. It’s really not an investment approach at all. When you want additional advertising, you simply add funds to your account. The click through rate of paid advertisement is significantly lower than organic listings, and there is less trust from the user because anyone can pay for advertisement. A moderate AdWords budget would be around $20 per day. How many clicks that would translate into depends on the keywords you’re targeting. Budgeting for a year, that would be just over $7,000, and the 3 year cost would be $21,000.
SEO Company Investment
Hiring an SEO company to handle your SEO is definitely more of an investment approach to SEO. After the initial SEO is done, any additional work the SEO firm does should help improve existing organic rankings. SEO companies charges for SEO work in different ways. Some of the more popular ways to price SEO are charging by the hour, charging by the project, and charging per month. It’s probably unrealistic to think that you’ll only need an SEO company for the few months that it will take to get you to rank for your search term. Without semi-regular SEO, your website will gradually be outranked by websites that are actively working on their SEO.
Paying an SEO company for optimization services usually gives pretty good results. The results aren’t immediate like Pay Per Click, but the payoff once you start showing up in the rankings is significantly better. Assuming you’ve got a good SEO company, the limiting factor will be your SEO advertising budget. If we assume that you want your website to stay at the top of the search results long-term, you’ll need more than just a one-time SEO charge. To simplify the calculations, we’ll look at the per month SEO billing since it’s set up for long term results. $200 per month for the service is somewhere in the middle of the lower and upper end charges for this service. Per year, this ends up being $2,400, and after 3 years, it’s $7,200.