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What’s the ROI of SEO, exactly?

(updated 2020)


Website owners are told that SEO is a fundamental requirement, if you want to generate positive return on your efforts. The advice is general, fuzzy, and usually left to the experts. But what if you want to actually measure the return on this supposed requisite investment? What if you need to decide whether to outsource the effort, or to invest in in-house talent development? For these decisions, you may need something a little more concrete, such as an actual understanding of the SEO-ROI connection.

Search Engine Optimization (“SEO”)
SEO encompasses all facets of making a website or a brand visible and readily accessible to the consumer through unpaid search engine tactics. A website’s SEO components may include the following:

Metadata
Strategic Keywords
Internal Links
Reputable External Links
Inbound Links
Anchor Text
Site Map
Content Structure
Load Time

Branding SEO components may include the following:

A Facebook status update that connects the consumer to a product promotion page
A tweet that connects followers to a new blog post
A Linkedin post that connects job seekers to a career site

This communication type appears in search results independent of the originating social network. (1) Moreover, search results are now impacted by the number of shares and the amount of traffic generated by a link or site so, it would be remiss if we did not consider such results as a part of the SEO landscape.  

High level metrics such as ROA are simply not granular enough to gauge the progress of internally derived strategic initiatives. The Right Metrics

Finally, the people portion of SEO is as large or as small as you make it: a professional SEO, or a person who is assigned to implement or perform SEO in the website or branding capacities. Regardless as to whether the responsibilities are outsourced or in-housed it’s easier to gain buy-in from stakeholders, when the monetary value can be assessed.

Return on Investment (“ROI”)
If you are a non-web based business, with only occasional SEO needs, the choice between outsourcing and developing the talent internally, is fairly easy decision. In the long-run, it will cost less to outsource and get occasional maintenance, than to pay a salaried specialist. Also, the implementation cost would be so nominal, you probably would not concern yourself with the nuances of deriving an estimate of  the expected profit generated by the SEO, versus the expected future cost for SEO. But, if you're a web dependent business, the choice to outsource versus develop talent, is not so clear cut. You'll need SEO updates as industry changes, and you'll want to know what to expect, and how to determine the value of the SEO efforts.  Fortunately, ROI is a measure that explicitly captures a project’s value. It's flexible enough to use as an initial indicator of value, and for ongoing analysis. ROI will also provide a basis for comparing the value of several projects, such as the expected benefits of implementation compared to the cost to outsource versus the cost to develop in-house talent. 

SEO-ROI METRICS
There are four key areas to assessing the ROI of SEO, no matter who executes the technical or branding SEO efforts:

Pagerank is the value that search engine algorithms assign to your webpages. Monitor ranking by site, page, or link and see if you hit your target, e.g. top 10 search results.
Traffic patterns can be monitored by referring site as well as geographic location. For branding and promotional efforts, the success of a specific link should be monitored concerning the volume of visits generated, which triggers consideration of link/site popularity. 
Keyword searches should be performed regularly for the top five keywords. Monitor the results and note the changes in position, positive or negative, for each keyword. Furthermore, track the search terms used by visitors. Note which are used most and note the trends for favored keywords that diverge from your organization’s current top five. 
Bounce Rate: Always scrub against the bounce rate data. It will help to determine if a chosen keyword association is detracting from SEO-ROI. It will also help to pinpoint the degree of effectiveness of traffic generated by branding and promotional links.

Monitoring performance is never an easy task. The right configuration always depends on the organization’s structure, goals, tactics, budget, etc. However, the exercise is well worth the headache - establishing value puts the organization on the right track and gets the needed stakeholder buy-in.

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(1) Although this has not traditionally been considered a part of the SEO landscape.
This text was removed, because eight years latter, this is commonly considered for SEO. A long time ago, I was ahead of the curve on this stuff!