Understanding and Measuring SEO ROI:

SEO ROI (Return on Investment) is a metric that assesses the business value derived from SEO activities in relation to their costs. SEO consultants and managers frequently encounter questions about SEO ROI when planning budgets and resources for digital marketing.
Although calculating ROI may seem straightforward, measuring it accurately in SEO can be challenging due to several unique factors.

To Calculate SEO ROI:

At its core, calculating SEO ROI involves a simple formula:
SEO ROI = (Value of Organic Conversions – Cost of SEO Investment) / Cost of SEO Investment.
Calculate SEO Investments – Total costs related to SEO campaigns, tools, and labor.
Calculate the Value of Organic Traffic Conversions – Estimate the revenue generated through conversions from organic traffic.
Account for Auxiliary Conversions – Factor in additional conversions indirectly supported by SEO.

Key Challenges in Measuring SEO ROI:

SEO ROI measurement involves certain complexities, often due to factors such as multi-channel attribution, brand-building effects, customer retention impacts, and more.
Here are the main challenges:
Flawed Attribution in Multi-Channel Marketing:

Marketing attribution models often fall short in accurately crediting SEO for conversions.
Customer journeys are rarely linear, involving multiple touchpoints across different channels.
Organic search often plays a role across the entire customer journey, from initial awareness to final conversion, but many attribution models don’t fully capture this.
SEO’s Role in Brand-Building:
SEO doesn’t just drive direct conversions; it also enhances brand visibility across search engine results pages (SERPs), contributing to brand awareness.
For instance, a customer may discover a product through a YouTube video or social media, then use a search engine to find the brand and make a purchase.
Organic traffic is credited for the conversion, yet brand-building from other marketing channels may have played a significant role.

Effective SEO strategies enhance brand visibility and credibility across all stages of the funnel, from awareness to retention.
Measuring SEO’s Impact on Retention:
SEO can contribute significantly to customer retention.
For instance, companies like Ahrefs produce educational, product-focused content that helps customers discover new ways to use their tools.
As users explore more functionalities, they engage more deeply, reducing churn rates.
SEO-focused content also helps nurture customers and increase lifetime value, providing long-term benefits that are hard to quantify immediately.
Long Lag Times Between SEO Investment and ROI:
One of the inherent challenges in SEO is the delay between investment and visible returns.
Unlike paid ads, which generate immediate results, SEO initiatives often take months or even years to yield a significant ROI.
To address this, it’s beneficial to measure SEO ROI over more granular timeframes, focusing on individual categories, pages, or even keyword-level performance.
Limited SEO Testing Capabilities:
Unlike some other marketing channels, SEO testing capabilities are limited.
While stopping campaigns temporarily can offer insights into the impact on broader marketing goals, this is not always feasible or practical with SEO, where changes can take months to manifest.
Estimating Future SEO ROI:
Predicting future SEO performance requires analyzing past trends and industry benchmarks.
Factors to consider include:
Past SEO performance of the website and competitors.
Traffic potential of targeted keywords and content.
Estimated conversion rates.
Using tools like Ahrefs, you can gain insights into metrics such as Traffic Potential (TP) for specific keywords.
Ahrefs Rank Tracker, for example, allows to track search visibility and estimate potential organic traffic for top-ranking keywords in target markets.

By understanding these challenges and using a structured approach to calculate and measure SEO ROI, make more informed decisions about SEO investments and their impact on the business.