What is a good frame of reference for SEO from a ROI standpoint?

By
Services for Real Estate Pros with Marketing Advisor & Squeeze Mortgage NMLS# 377413

From a search engine perspective, there are two main ways to drive traffic to your website.  First is paid traffic via search engine marketing (e.g., Google Ads). When setup properly, you can easily track the effectiveness of Google Ads campaigns.

A second way to drive website traffic is through search engine optimization (SEO)  which will generate organic (non-paid) traffic. 

MEASURING SEARCH ENGINE OPTIMIZATION
When companies allocate marketing budget to SEO, one of the concerns I often hear is how long does it take to see results and how do you measure the campaign effectiveness?

Although the answer to those questions is going to vary based on a variety of factors such as industry, geography, level of competition, current website health and authority score and more, there is still a good methodology to serve as a proxy.

You can use the estimated cost of Google pay per click traffic as a proxy for your ROI calculation for the SEO campaign.

In other words, if you purchased the incremental traffic that the SEO has generated organically,  what would that cost be (incremental value) compared to the cost of your SEO campaign?

EXAMPLE
Assume in your industry and geography that it costs an average of $10 per click to drive each new website visitor through Google ads. 

Let's also assume that your website currently averages 1000 visitors per month and you start an SEO campaign and pay $500 per month. 

Then after 6 months of a search engine optimization campaign your website traffic grows to 2000 visitors per month. 

That means you spent $3000 over six months for SEO and generated 1000 new visitors per month.

What would that have cost you if you had purchased that taffic from Google Ads? We know that at $10 per click, x 1000 website visitors, the value of that traffic is $10,000. 

RETURN ON INVESTMENT
So your return on investment (ROI) on the SEO campaign at this point is 233%. 

Although this is not the "end all be all" answer to the question, it provides a useful measuring stick. We still don't consider conversion in this analysis. For example, if paid traffic converts at double the rate of organic traffic your ROI analysis will change.

For more details about how to measure search engine optimization, click here to request an SEO audit from me.

Posted by

Randy Mitchelson, APR
randymitchelson@gmail.com

Comments (2)

Tamir Ness
Ness Property Management Group - Brickell, FL
Love It, Breath It, Live It!

Randy's SEO knowledge has saved me a lot of money. 

Oct 20, 2021 10:49 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Randy Mitchelson,APR this is good information to share.  Thank you for sharing it with us.

Oct 20, 2021 12:00 PM
Randy Mitchelson,APR

We love sharing our know-how !

Oct 21, 2021 08:01 AM