Simple Formula For Calculating ROI in Search Marketing, SEO

In the hay days of easy Search Engine Optimization (SEO), and generally whenever you talk to an internet marketing salesman, the general notion you are meant to walk away with is that SEO is good for everyone, and it’s the best silver bullet since e-mail newsletters. Sadly however, it’s just like every other form of marketing. Target marketing to a specific audience and measuring Return on Investment against other marketing methods are just as necessary as with any traditional means. It just so happens, however – that measurement and data collection is a known entity, and provides much more specific and directly measurable data than with most traditional means. The point of this article is to help you identify the three major data points which will help you estimate your ROI on an organic search campaign before you really dig into it.

Supply and demand

Measuring ROI beforehand begins with keyword research on the demand side. Specifically, you have to answer the question,

“How many people are regularly searching for what I have to offer?”

Moreover, addressing what searchers call your products/services can be a crux issue, as it won’t always be what you call them. To you, it might be an “air flow control nozzle,” but the purchasing agent for the retail giant you’re trying to woo might call it “paint sprayer nozzle.” In a nutshell, know the vernacular of your customer base before you begin, or at least be prepared to make educated guesses. Keyword research is its own animal, but erring on the side of conservatism with the differing numbers provided you is usually a good rule of thumb.

If you’re unfamiliar with keyword research tools, the Google Keyword Tool is a good place to start, or if you want better keyword data and analytics, you might consider a software suite such as Web CEO or Market Samurai. Either way, you would be wise not to spend more than $200 on a piece of software. When you have some idea of how many people are searching for your keyword list, your next step is to start gauging competition. The amount of people that will reach your site, and thus engage with your company will have a direct correlation to how highly you rank in organic search engine placement. If there are more competitors for a particular keyword or key phrase, it makes sense that success will be harder to obtain. Finding a modicum of search users without strong competition would be the initial goal of any short term search campaign.

Judging the competition is actually a simple operation at first glance. First, take a look at how many results exist in the Google / Bing / Yahoo indexes for your particular keyword. Put this up against the amount of searchers, and you’ll quickly have a measurable ratio to get a handle on things. Obviously, your ratio of searchers to results is better if it is a higher number.

Take a look at each of the 10 results which currently occupy the front page of your major keyword choices. An excel spreadsheet is a good option at this point, and several keyword research software programs will have competitor tracking modules. Specifically, concern yourself with page authority, overall domain authority, and link profiles of each site. The number of specific domains and overall indexed links pointing to a site has a direct impact on how that site will rank, and how much topical authority it has. For more info here, a subscription to seomoz.org ($79 / month) is a worthwhile investment. Other back link analysis tools exist, but this is a good standard to base from. Put these back link numbers up against your own site, and take stock. Assuming an equal base of content and internal optimization (something of a big assumption), back links will likely make the difference in who ranks and who doesn’t.

Search Engine Results Pages (SERP) Ranking

So you’ve picked a keyword, enacted a campaign, and now you’re ranking somewhere in the first few pages of the engine. Sadly, a good portion of search users (generally 9 out of 10) won’t make it past the first engine, and your third page rankings on some major keywords are only producing minimal traffic / sales increases.

Knowing this little statistic before a SEO campaign can dramatically increase chances of success, solely because you know what is necessary for success. A few studies (one specifically surfacing from the Searchlight Digital Blog) have concluded the percentage of search users who elect specific results, based on their order of appearance on the SERP page:

1 42.3% 2 11.92% 3 8.44% 4 6.03% 5 4.86% 6 3.99% 7 3.37% 8 2.98% 9 2.83% 10 2.97% 11.66% 12.56% 13.52% 14.48% 15.47%

Obviously, first place rankings have a significant increase on potential for search traffic, and listings that occur above the figurative fold of a users screen also have a higher chance of receiving traffic. Even by the time a user gets to the bottom of the first page, click through percentages dwindle exponentially from those of a first page ranking. Simply put, if you know how many searches are done on a specific keyword, multiply that number by the SERP click through rate above that you expect, and compare with your site analytics. If the numbers come close to matching up, great! If not, you might glance twice at your numbers, as well as your site’s meta titles and descriptions, which will sell search users on the idea of clicking through to your site above others.

Conversion

Conversion is a topic of little attention among some SEOs, who are sometimes concerned more with getting people to the figurative front door than inviting them inside for a cup of tea. At this point, one simply needs measure the activity on a web site which most readily leads to a dollar bill. Ask yourself what key performance indicators (KPIs) indicate success with your objectives. If its sales, then track goals using analytics to measure sales directly. If it’s lead generation, set your funnels to measure the stages at which potential customers or donors can enter their information to be contacted by you.