The ROI is different for every industry. Lawyers can make a million-dollar profit from a single click, where many of our e-commerce clients are working on tight margins and have to add up many pennies/dollars to track success.
Here are some ideas to get you thinking about ROI. Based on leaked AOL data from 2006, the number one position on a given Google page gets about 42% of the traffic and the number two position gets about 12%. A number one spot is said to be worth 8.5 times what a number five spot is worth (with 4.92% of the traffic).
A newer Slingshot SEO study revealed the following click-through rates for each position in the search engine results pages:
Number 1: 18.2%
Number 2: 10.05%
Number 3: 7.2%
Number 4: 4.8%
Number 5: 3.1%
While this is not an exact science and expert opinions vary on the specifics because the search engines won’t reveal facts, you can use this type of data to extrapolate what you will get for each keyword in terms of ROI.
Let’s just say you rank number one for “cheap golf clubs” and you get 2,000 visitors per month from that. With a 2% conversion rate, you can close about 40 deals.
If you make $35 gross on average per order, that number one rank is worth $1,400 per month ($16,800 gross profit per year) from that one keyword. If you figure that 50% of your customers will buy more than once, you can add another $35 x 20 or $700 from those customers. Not to mention these new customers are now on your email list and may be encouraged to buy from you year after year. Unlike the paid ads, these ranks may continue to stay reasonably well-placed for a time, even if you stop doing aggressive SEO. So calculating the value of search must be looked at over the long term.
In addition, if you are not factoring in the number of people who call or come to your store versus use an online shopping cart or submit a form, you may be leaving out ROI from offline conversions. And if you are not tracking (in your website analytics) when people come from other sources, if they originally found you from SEO, you are not giving full credit to organic search. When all things are factored in, the marketing world agrees that SEO is a tremendously strong channel and capable of generating millions of dollars in revenue.
If you had to buy the same “cheap golf clubs” keyword in Google, it could cost several dollars or even $10 or more per click. Some terms, like “mesothelioma lawyers,” are as high as $220 per click! Let’s say “cheap golf clubs” was a reasonable $3 per click. If you get 2,000 clicks through organic search, that’s a savings of $6,000 per month ($3 x 2,000 clicks) because you didn’t pay for ads. So make sure to add in the value of costs averted.
Forrester Research says that even by 2016, the foundational spending of online marketing will still be weighted toward SEO and paid search. Social media and other strategies are picking up speed—partly due to the fact that social media now helps your organic ranks, even if mostly indirectly. However, it is a fact that the highest percent of the money spent on online advertising goes to search engine marketing. Interestingly, Google watches to see if around 20% of your traffic comes from referral sources like social media sites and from quality links, so, once again, the interconnectedness is a key element in a successful strategy.
Are you getting the most value from your SEO?