SEO campaigns can be complicated and take a lot of time to administer. One of the things that many people fail to do when they are managing campaigns is to determine their ROI, or return on investment. While we often know a lot about our sales and conversions, the ROI is usually neglected primarily because most people don’t know how to calculate it.
However, this metric should be one of the foremost you consider as you determine which SEO campaigns are most effective. Any SEO expert that you work with who runs your campaigns should be reporting the ROI to you. An experienced online marketer such as Brad Russell in Australia, knows that you need to know which efforts are bringing the greatest results per marketing dollar.
If you are doing your own SEO campaigns, here is how you can evaluate your ROI with these calculations, or at least have more of an understanding when your SEO manager mentions them.
There are two types of ROI, anticipated ROI and actual ROI. Anticipated ROI is the return you expect to receive on a prospective campaign. Your SEO manager should be discussing this with you when you are considering spend on SEO efforts. The actual ROI is the return you receive once the campaign is complete and is the most important number that should be reported to you.
To compute the anticipated ROI, you need to know the monthly number of visitors, the conversion rate on the e-commerce site, and the cost of each order.
Then you can determine the anticipated revenue from SEO efforts and subtract from that the cost of the SEO campaign. Divide that total by the cost of the SEO campaign and multiple by 100 for a percentage.
Actual ROI is calculated by adding the total e-commerce profits from the SEO campaign with the total goal value through SEO. Then subtract the cost of running the SEO and you have the actual ROI.
You can see it can get a little complicated. This is where it is important to use an SEO expert who can help you get these numbers so you can maximize your advertising dollars. It is important to note that with most SEO campaigns, it takes several months to see a positive ROI. This is a normal part of the SEO process and something companies should understand before they undertake SEO efforts.
Now that you have some understanding of ROI, you will be able to weed out an expert in SEO from someone who is using terms like traffic, rankings, links, and conversions. All of those things mean nothing unless you can equate a dollar return amount to them. Don’t do another SEO campaign without having a strong understanding of these numbers and calculations. It is a great way to weed out an SEO expert who knows what they are doing versus one who is just dipping his toe in the water.
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