Seo advertising

How to Calculate SEO ROI Using Google Analytics

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You’ve probably heard the saying, “You have to spend money to make money.” Well, the same goes for search engine optimization (SEO). To see a real return on that investment, you need to track results, but that can be tricky, especially if you don’t know what metrics to track. The good news is that Google Analytics can help make sense of website traffic and conversions, so you can see exactly how much value your SEO efforts are adding.

Simply put, SEO ROI is the return you get for money invested in SEO – the actual monetary benefits it gets, and the best tool to determine that is Google Analytics. Using it, you can get comprehensive information about a website’s traffic: how visitors react to it, where they come from, and what could be the best keyword strategy to increase their numbers.

What SEO ROI reveals

• Effectiveness of the strategy: It is established using several parameters, such as website traffic, visitor retention rate and visitor bounce rate.

• Revenue: If your SEO strategies are not generating revenue, no amount of website traffic will make a difference. Therefore, you need SEO ROI to know how investing in SEO adds to profits.

• Need to refine marketing: When you are aware of the returns from different marketing channels, you can change your strategy to focus on the most profitable ones.

• Conversion Rate: Suppose your SEO strategies drive incredible traffic, but only a small proportion of visitors turn into customers, increasing your revenue? Would you be willing to pursue a large marketing budget investment in SEO in such a scenario without modifications? Of course not.

• Conversion time: You may find that people who read your blogs turn into customers in about a month. They may not have converted immediately, but they did eventually. In such a situation, any savvy business owner would want to focus more on SEO.

Related: How to improve your conversion rates with the help of SEO

The SEO ROI calculation process has three steps.

1. Conversion Tracking

In simple terms, this means keeping track of all conversion actions – those performed by website visitors that are deemed profitable for your business. This can be the simple act of purchasing a product from your online store or something more indirect, such as signing up for a survey. With conversion tracking, you can stay on top of how website visitor activities are earning you revenue. This is usually easy for e-commerce sites since all purchases and transactions are logged. However, even if you are a service company, you can still track actions by assigning a monetary value to specific activities.

How to track conversions by website type:

• E-Commerce: Every time a customer purchases an item and increases your revenue, the transaction is recorded. If yours are not registered, you can consult Google guidelines to start doing it. Once transactions are recorded regularly, simply click on Conversions > eCommerce > Overview to view all sales and conversion action data in one place.

• Service-based websites: Tracking conversion actions for service-based websites is a bit tricky, but doable. Since actual monetary transactions and purchases do not take place on these sites, you cannot simply keep track of them. Instead, you should assign monetary values ​​to actions that can benefit your business. For example, you can assign a value of $70 to the act of signing up for a newsletter. To set these values, click Admin > View > Goals in Analytics and create “goals” that store these assigned monetary values.

Once these goals are set, you can easily calculate conversion rates using a variety of methods:

(a) If you are tracking the act of filling out a form, determine what proportion of signups become customers. For example, if you have 1,000 people filling out a form on your website and 50 of them turn into leads, the conversion rate would be 5%.

(b) If you want to track the average value of a sale, find out the average amount spent by each prospect that turns into a customer. For example, if you had five sales worth $200, $500, $160, $400, and $170, your average sales value would be $286.

(c) If you want to determine the value of each lead, divide the total revenue from converted leads by the number of leads you got from that goal. For example, if you have 500 people who signed up for a newsletter, 20 of whom made a purchase of $500 each, the value of each lead would be [(20 x 500)]/500 = $20.

By using these set goals to determine conversion rate, average sales value, average lead value, and other important metrics, you can convert website visitor actions into quantifiable terms.

Related: 6 Lead Generation Tactics That Can Boost Startups

2. Sort and Analyze Conversion Tracking

Once you’ve tracked conversions for at least a month, the next step is to analyze them, and the best way to do that is to compare them to expected results. Every business that tracks their conversions has certain expectations that align with business goals. When you analyze your conversions, you want to know why your actual conversion rates are meeting, exceeding, or falling short of expectations. What triggers a certain conversion action, how to trigger it for the maximum number of visitors, and other related questions can be answered by analyzing conversions.

The easiest way to analyze conversions is to sort them by their channel of origin. This allows you to focus solely on analyzing conversions obtained organically from SEO efforts. To sort your conversions by channel, click Conversions > Multi-Channel Funnels > Assisted Conversions > Conversions. All conversions marked by the organic search tag will be the result of SEO strategies.

3. Calculate your SEO ROI

Once you’ve collected, sorted, and analyzed conversion-related data, calculating SEO ROI should be a breeze. To calculate yours, the formula usually followed is:

(Investment gain – Investment cost)/Investment cost.

If you don’t know how to apply it, here’s a quick example: Assuming you invested $1,500 in preparing and implementing your SEO strategy and ended up earning $5,000 through investments in SEO, your SEO ROI would be calculated in decimal form as follows:

$(5000-1500)/$1500 = $3500/$1500 = 2.34

If you want to calculate in terms of percentage, multiply the decimal value by 100:

2.34 × 100 = 234%

Related: Become an SEO expert and make your business stand out online

Start calculating to optimize SEO campaigns today

Calculating your SEO ROI using Google Analytics is one of the most efficient and effective techniques available to business owners today. With this data, you’ll be able to determine what type of content resonates most with a target audience, what keywords should be used in future campaigns, and whether certain landing pages need improvement, among other vital tasks.