SEARCH ENGINE OPTIMIZATION
RETURN ON INVESTMENT
Return on Investment (ROI) is what every client wants from a
search marketing agency. It’s an easy thing to calculate if you’re doing
Pay-Per-Click (PPC) advertising. If your revenue is higher than your spend, PPC
management fees and cost of goods, then your client is getting a return on
their investment. Although it’s simple to figure out ROI for PPC, the same
cannot be said for search engine optimization (SEO).
Search marketing agencies that provide SEO services have
traditionally reported ROI in a variety of ways. The most common approach to
SEO ROI has been search engine ranking. If a company can get a client to
perform well in organic SERPs, often times focusing on a handful of short-tail
keywords, then they’ve done their job. Unfortunately, that’s not exactly SEO
ROI. Instead, it’s a trophy that may not be worth anything at all.
The fallacy of short-tail search terms is the assumption
that it provides a return on investment. For example, if a company is spending
$5,000/mo to an SEO agency to build up and maintain short-tail keyword phrases,
that agency may report those SERPs as SEO ROI. Agencies have been training
their clients to believe that highly ranked short-tail SERPs is ROI, when that
couldn’t be further from the truth.
More often than not, clients already have some short-tail
keyword phrases that perform very well in SERPs. They covet their short-tail
SERPs and believe that by simply being number one or number three, their
website will somehow magically profit from it. However, looking deeper into
their analytics can sometimes reveal a much different story. Short-tail SERPs
can suffer from being too broad. For example, a site may perform well for “blue
widget” but it doesn’t necessarily mean that people who want to buy the widget
will search with that short-tail term. Instead, qualified and targeted traffic
may search for “best price on blue widget” more often than simply typing “blue
widget” in their search query. If that’s the case, and if the website doesn’t
perform well on those targeted long-tail keywords, the short-tail SERP becomes
useless.
The same concept applies to referral traffic. A successful
link building campaign may get a lot of high quality inbound links to the
client’s site and may improve their short-tail SERPs. However, if those
referrals aren’t driving targeted traffic and if they’re only propping up poor
performing short-tail keywords, then is there really any ROI to report? The
answer is probably not.
The Anatomy of True
SEO ROI
True SEO ROI involves driving targeted traffic from SERPs,
regardless of how long or short the keyword tail is. It also includes targeted
referral traffic. Targeted traffic means traffic that accomplishes the purpose
and goals of the website. That could be any of the following:
Subscriptions
Repeat Traffic
Community
Involvement
Registrations
Newsletter Signups
Purchases
What’s tricky about reporting SEO ROI is that you have to
connect the links that have been built with referral traffic from websites and
search engines, and then connect that data with conversion results. Although
Google Analytics can help connect the dots, it’s still difficult to sync,
analyze and report on that data. This is something that Raven has spent a great
deal of time on — creating a relationship between Link Manager data, Analytics
and our conversion tracking code. The result is what we call true SEO ROI.
True SEO ROI can show you the effectiveness of any SEO
campaign. For example, if a campaign is focused on building links in forums
that link to widgets on the client’s online store, then an SEO ROI report would
show the success of that campaign. That report might include a list of inbound
links that resulted in purchases, including details from related organic search
engine traffic (matching or similar keywords used in the anchor text or within
the context of the pages the links were built on) that resulted in purchases.
Each SEO ROI report
should focus on and report the following key elements:
Conversions
related to the campaign
Overall increase
in conversions over time
Conversions
related to search engine traffic
Overall increase
in search engine traffic
Overall increase
in unique users and traffic
Notice we’re not comparing SEO to the lottery or slot
machines. SEO, like the stock market, necessitates a solid understanding of the
market and the industry. A successful SEO strategy will mean investigating and
researching appropriate keywords based on potential traffic levels, competitiveness,
and the potential for conversions.
And we know that a successful SEO campaign has great value;
value which is, in fact, completely unparalleled. We know, for instance, that
achieving the #1 spot for a given keyword means getting about 33% of the clicks.
This means that if there are 5,000 searches for a keyword each month, you could
reasonably expect to receive around 1650 visits to your site if you hold the
top position. This is an outcome worth investing in and waiting for.
A Strategy for a
Successful Long-Term Investment
Savvy investors develop their own strategy (algorithm) for
choosing their stocks. This process likely involves researching and evaluating,
among other factors, a company’s:
Financial
statements
Competitive
advantages
Reputation
Investor news
Strength of brand
recognition
Expert opinions
and advice
Past performance
They will then likely weigh these factors against the amount
of risk they’re comfortable with before making a final decision. They’re
essentially making a ‘best guess’ based on all the bits of information and
knowledge they’ve accumulated.
SEO works in a similar way. Using the tools, strategies and
knowledge available to you, you gather information
about the best keywords to target. Factors you’ll consider include:
Potential traffic
levels
Competition for
keywords
Past performance
of keywords
Searcher intent
(i.e. Are they just looking, or are they ready to buy?)
Industry trends
and predictions
Expert opinions
and advice
You Can Learn a Lot
About Your Customers This Way
This is a better way to look at your internet customers and
your analytics. By shifting your point of view away from instantaneous
interactions to a more long term perspective, you will understand more about
how your website visitors interact with your website. Ultimately, this is how
you devise better conversion and sales strategies.
In all my years of SEO consulting, I haven’t come across one
single business that actually measures their SEO return on investment (ROI).
They’ll measure their keyword rankings, their traffic, and they might even
measure their conversions. However, I haven’t seen a report in my life that
shows how much money SEO made a business for a given year.
On the surface, the above statement makes these businesses
seem neglectful, mismanaged and a little reckless. However, what I think it all
comes down to is that these businesses simply know they need search engine
traffic. And when the search engine traffic does arrive, they can sense something
happening: they notice sales are up, buzz is up, and “things are happening.”
Basically, they get the feeling that SEO has helped.
I don’t blame the marketers and/or the marketing departments
of these businesses. Marketing is hard. There is a lot of work to do all the
time. Whether it’s attending countless meetings, creating lengthy reports, or
their boss making them jump on the hottest social media trend, tracking SEO ROI
is a big project that most likely gets put on the back burner. Plus, tracking SEO
ROI with currently available tools is really, really hard and most likely
inaccurate.
When my clients ask me how they can predictably determine
the ROI of their SEO efforts, I wish I could give them a cut and dry answer.
The truth is, however, that there is no standard x + y = z when it comes to
SEO.
SEO, like picking stocks, means making decisions based on
what we know now, what we’ve seen in the past, and what we expect to happen in
the future. It means staying the course, through the dips and valleys, and
holding out for the long-term rewards we know are coming. Of course, these
long-term rewards will only come if your SEO strategy is executed well, by a
true professional, who understands the industry and how to build a solid SEO
campaign.
You simply can’t
approach SEO with a short-term investment mentality. If you’re looking for a
quick hold-and-flip, that isn’t SEO. If you want to know with some measure of
statistical certainty what your ROI will be over the next quarter or year, that
isn’t SEO. If on the other hand you’re willing to invest for the long-term, if
you have a long-term vision and you’re willing to do whatever it takes to reach
your end goal…that’s SEO.
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