<< by on March 22nd, 2011
It can be difficult to track and measure Return on Investment (ROI) through Search Engine Optimization (SEO).
SEO is comprised of three areas of focus
- Technical – Site structure
- On-Site Optimization – Content
- Off-site Promotion – Linking
Focus on SEO ROI measurement history
Since SEO has made its way into marketing calendars, savvy marketers have been trying to show more than just “improved rankings.”Simplest formula for proposed SEO campaigns may look like this:
Predicted ROI = (Anticipated revenue from SEO efforts) – (Proposed cost of SEO project)
If sponsored listings are not labeled, what percentage of searchers click on organic listings versus paid listings? Who doesn’t click at all? With over 4.2 million searches, 54% of people clicked on organic results, 35.2 did not make a click, and only 10.2% clicked a sponsor link.
It doesn’t matter about the position on the page, but more on the relevance of the message. For instance, users respond better to reputable domains (example: .org).
Q. What are users looking for?
Are users looking for price points? Are users looking for a familiar website? Universal and personalized search make the biggest difference in 2011. Keywords determine what type of search users are performing.
- nike running – Focused on news
- nike shox- Focused on buying
- nike shox running- Focused on product forums and reviews
Universal and personalized search (36-42% of clicks) will occur on a #1 ranking in SERPs.
Additional obstacles that must be ignored when predicting ROI
- Total number of keyword phrases
- Number of searches for each keyword phrases
- Ranking for each keyword phrase
- Average CTR for each top ten position
- Traffic for each keyword phrase
- Assigned average value or abitrary value for each visit (conversion %, Assigned order value)
So, how do we predict?
In 2009, Rosetta worked with a retail client to estimate the number of visits to the site that could be expected as a result of SEO implementation. They used a very basic model based on past traffic to the domain, and using average monthly traffic as the baseline to measure against.
- conservative approach (looking for trend match)
- Model was proven accurate but too conservative
Using the past traffic to predict growth
Record data for a complete year, then, take the average amount traffic and look at the actual month over month (to predict seasonality). This data is crucial for finding potential traffic and anticipating future projections.
And then things began to get more complex…
Additional variables to refine into “aggressive” vs. “moderate” SEO
- Total number of links required per keyword phrase – Estimates based on looking at top ranking pages for high priority keywords, and analyzing number of inbound links pointed to them. Remember, a link is a link.
- Prediciting increased or decreased conversion rate – Based on site or platform upgrades, and cost analysis versus competitors, a number of tweaks could be made to this KPI
- Assigning value of opportunity based on cost to drive traffic through paid search – Hard to predict since the goal is not to take over paid search
- Average CTR for each top ten position – Hard to accurately predict different stages of buying cycle
More complex doesn’t mean more accurate results
Adding complexities only makes for more confusing spreadsheets and charts. Start off basic and gain some confidence in your reports.
Look at your competitors
Another way to look at how much traffic YOU could get from SEO is by prediciting how much traffic your competitor gets. Keep in mind, you may need to use multiple sites, since competition can vary from keyword to keyword. This is especially important if your website has multiple products or business lines.
Once you identify non-branded keywords that competitor sites are ranking for, and define a limited set, apply a CTR for each keyword based on visibility.
Once numbers are totaled, one way to display them is by showing opportunity cost of not doing SEO. This will give a clear picture of what it’s worth.
The future of SEO ROI projections
Once numbers start making sense, the next step is to develop ways to update the projections in a real time manner – a self correcting model. It’s important to fix projections as they happen. Don’t stick to exact projections if you have real time data.
Key factors to remember
- Actual implementation rates of SEO recommendations
- Actual number of inbound links gained
- Level of competition, and their SEO sophistication
- Ongoing algorithm updates
- Ability to update projections