What is ROI and how does SEO affect this?




What is ROI and how does SEO affect this?

We all know that the purpose of SEO (Search Engine Optimization) is to help websites to improve their positions in Google's page results (SERP's). Therefore, when your website ranks higher on Google, you know that SEO is doing its job. But is this the only indicator for a company's efficiency? Certainly not!

Now that we cleared up what SEO and SERPs mean, let's take a moment to find out what ROI is about. This indicator is all the fuss in the online marketing world, and it stands for Return On Investment, representing the rate at which your investment is recovered. This means that it shows a percentage of a sum that has been invested in promotion, and returned as profit. To make things clearer, ROI is an indicator of an investment that has been made, and whether it was profitable or not, like promoting an online store.

Therefore, we can sum up the following formula that calculates the recovery rate:

ROI = (profit after investing - the investment)*100/investment.

Still, what is the relationship between ROI and SEO, and how can you estimate this indicator for an online business, taking SEO into account? First of all, we mustn't forget that the general use of SEO is attracting more visitors and making a website more popular. However, a growth in traffic doesn't mean more sales, it just means attracting more potential clients! So, when it comes to SEO as interpreted by ROI, things are a little different, because we need to be talking about conversions (sales).

This happens when the visitors (potential customers) that, thanks to the SEO process, have landed on your page, become effective buyers. Therefore, the purpose of SEO as seen from a ROI perspective is to recover your investment, while obtaining a steady profit.

Still, the recovery rate for your investment in an SEO campaign is not so easy to figure, as in the case of offline marketing, meaning you have to count more than conversions and visitors. At best, you can calculate your online ROI using the number of conversions as a result of organic traffic given by SEO. This correlation between the two factors are pretty hard to monitor on your own, that's why there are a lot of tools you can use, that monitor your visitors' behavior on your webpage, such as tracking/analytics tools.

Lastly, the rentability of SEO as seen through ROI would translate by measuring the growth of conversions as related to the number of organic traffic visitors. It's all about a sum of factors because you also have to take into consideration little things, such as improving your website layout.

Here is how you can monitor your ROI using special tools, in order to evaluate your gross investment rate, from an SEO point of view:

1. Check your monthly income, taking into account the cost of your SEO fee. First of all, Google Analytics is your true ally when it comes to measuring ROI after SEO. This tool will allow you to see any returns that come from organic traffic, giving you a sense of how profitable your investment is. However, there is a chance that direct traffic might be influenced by organic traffic, so the data may not 100% reflect the truth. As an example, a visitor may discover your website from his mobile phone, and make a purchase from his PC or laptop, directly accessing the webpage address. In this case, organic traffic hits are transferred to direct traffic.

2. Analyze your growth using keywords that don't contain your brand's name! Such general keywords are much more relevant for new visitors, which are not yet familiarized with your brand. This way you can make sure that the incoming traffic is organic, generated by a general search for certain words or phrases. To monitor this, you can set Google Analytics to send you a periodic e-mail report.

3. Check the quality of your backlinks! Linking your page to the site with a high DA (domain authority), over 40, will raise the presence of your online brand. You can track down the number of backlinks and their relevance, popularity and quality, organic traffic vs. backlinks, using AHREFS, another tool designed to measure ROI after SEO.

4. You can also use Google Analytics to analyze the quality of your organic traffic. As we mentioned earlier, it's not enough to have new visitors if they don't convert to buyers or take other favorable actions. The lack of conversions can be the cause of vague or irrelevant keywords, that don't move your audience. In the same time, Google Analytics shows you the average session time and gives you tips on improving this aspect. All these information are precious when it comes to measuring ROI after using SEO.

5. Set your goals in Google Analytics so that you get conversions and follow your traffic, seeing how users react to your website's content.

6. Use the SEMRush tool to analyze your competitors' SEO strategy regarding first page results. When it comes to ROI, you need to keep an eye on the competition and choose what works best for SEO.

7. Create alerts using Google Alerts for brand monitoring, targeted keywords or monitoring the competition.

The final goal of every marketing company is generating profit. This way, ROI after using SEO needs to have an impact on sales regarding profits, not just for covering your investment. So, your earnings need to go up the same as traffic, this aspect indicating a positive ROI.

Don't forget though: The efficiency of an SEO campaign, with a rentable ROI and taking the top positions in SERP pages will take time, usually around 3 to 6 months. In the case of a competitive niche, it can last as much as 12 months until the results start showing up.