Key takeaways
- SEO ROI measures the financial return on your SEO investment using the formula: (Gain from investment - Cost of investment) / Cost of investment × 100.
- 49% of marketers say organic search delivers the highest returns, and it generates 40% of business revenue, which shows how profitable SEO can be.
- It is best to measure SEO ROI after 6 months, because SEO strategies take time to generate measurable traffic and conversions.
- Tracking costs, conversions and revenue with tools such as Google Analytics 4 (GA4) shows which SEO tactics deliver the highest returns.
- There is no universal "good" SEO ROI: results vary with the level of investment, lead value and sector. Ongoing tracking and optimisation help maximise returns over the long term.
Learn how to calculate the return on investment (ROI) of search engine optimisation (SEO) and you get an instant view of your SEO performance. You can then improve your SEO campaigns, find new tactics and increase your profits.
In this guide we cover:
- What is the ROI of SEO?
- What is the formula for calculating SEO ROI?
- When should I measure SEO ROI?
- Why measure SEO ROI?
- How to calculate SEO ROI
- What is a good SEO ROI?
- SEO ROI FAQs.
What is the ROI of SEO?
SEO ROI varies, and data on average returns is limited. Even so, 49% of marketers say organic search delivers the highest returns compared with other marketing channels. Organic search also generates 40% of business revenue.
These figures show that search engine optimisation can deliver a steady return on investment. How large that return is, however, depends on how much you invest and how you spend it, and whether it is worth investing in can be estimated before you start.
What is the formula for calculating SEO ROI?
SEO ROI is calculated by taking the gain from your SEO investment, subtracting the cost of the SEO investment, and dividing the result by the cost of the SEO investment. Then multiply by 100 to get a percentage.
The formula is:
(Gain from investment - Cost of investment) / Cost of investment × 100
When should I measure SEO ROI?
Whether you work with an SEO agency or run SEO in-house, wait at least six months before measuring the ROI of search engine optimisation, and decide before you start which SEO goals you are measuring.
SEO takes three to six months on average to work, so calculating ROI too early will give you inaccurate results.
Why measure SEO ROI?
Whether you do SEO for your own business or for clients, measuring SEO ROI shows the impact SEO work has on a business. Calculating the ROI of your SEO activity brings benefits such as:
- Better SEO decisions: by calculating SEO ROI you can see which SEO tactics are producing results and keep investing in the strategies that raise ROI.
- Educating senior management about SEO: your managers want to see concrete results, and measuring SEO ROI gives them exactly that. Measuring the ROI of SEO initiatives helps you show decision makers why SEO is a core strategy worth continued investment.
- Measuring SEO success: SEO is an ongoing process. By calculating the ROI of your SEO work regularly, you can measure its success and keep improving your strategy to get the most from your SEO budget.
How to calculate SEO ROI
Now that we have covered what SEO ROI is and why it matters, how do you calculate it?
Follow these three steps to calculate your SEO ROI:
- Calculate your investment
- Track your conversions
- Measure your SEO ROI.
1. Calculate your investment
To calculate SEO ROI, you first need to work out your SEO investment. Once you have that, you can start measuring the revenue it generates.
SEO investment includes:
- Any SEO tools you use (for example, Ahrefs, Semrush)
- Freelancers, SEO agencies or an SEO consultant
- In-house staff
- Payments for content distribution or link building.
Once you have added up these costs, you can calculate your SEO ROI.
2. Calculate your gain
Next, you need to calculate the revenue your SEO work has brought in by tracking your conversions.
Conversion tracking depends on the type of business you run. If you run an e-commerce or product business, you can track conversions through online purchases and transactions and get an exact revenue figure.
Google Analytics 4 (GA4) is a good tool for tracking conversions.
If, on the other hand, you are a lead-based business such as a service provider, you can track conversions by assigning monetary values to conversion goals such as form submissions. Marketing automation software can make this tracking even more accurate.
If you do not have marketing automation software, Google Analytics 4 (GA4) is a good tool for tracking conversions. With GA4, businesses can set up conversion tracking on their sites to track conversions reliably and calculate the gain from their SEO investment.
By tracking conversions, you can find out which strategies bring in the most sales and spot any factors blocking conversions that could be costing you revenue.
3. Calculate your SEO ROI
Once you have calculated the revenue from your SEO activity over a chosen period (most businesses use specific months or quarters), it is time to calculate SEO ROI.
Put your SEO investment cost and your revenue into this formula:
(Gain from investment - Cost of investment) / Cost of investment
Once you have the result, multiply it by 100 to get a percentage.
Here is the formula in action.
Say a business invests £5,000 (cost of investment) in SEO and makes £50,000 (gain from investment) as a result. The formula would look like this:
(50,000 - 5,000) / 5,000
That gives 9.
Multiply it by 100 and the business's return on investment is 900%.
What is a good SEO ROI?
By now you have probably asked yourself: "Is there such a thing as a good SEO ROI?" The SEO ROI formula gives us a percentage, but what does that number actually mean, and is there a specific ROI businesses should aim for?
The answer depends on your business. Monthly SEO budgets vary widely from one company to the next, and the value of a lead differs from business to business.
In short, there is no SEO ROI that counts as good for everyone.
It all depends on how much a business invests in SEO and how much it gets back. So when you calculate SEO ROI, set an achievable benchmark percentage for your business, then raise it as you collect more data and earn more.
SEO ROI FAQs
Answers to the most common questions about SEO and ROI:
What is SEO ROI?
SEO ROI is the estimated value of search engine optimisation (SEO). It helps businesses plan ahead, set marketing budgets, shape strategy and more.
SEO ROI is calculated with this formula:
(Gain from investment - Cost of investment) / Cost of investment.
How often should you measure SEO ROI?
Businesses usually measure SEO ROI monthly, quarterly and annually.
SEO takes time to produce tangible results, so calculating its ROI can be tricky early on, when there may be little data to work with. Over time, as the SEO strategy matures and the business grows, the cost of investment, the gain and the ROI become clearer.
What are the challenges in measuring SEO ROI?
Calculating and understanding SEO ROI is not easy. These are some common obstacles businesses run into:
- SEO takes time: the results of SEO work are not immediate. SEO typically takes three to six months to produce results, so set expectations within your organisation with that timeframe in mind.
- Gap between investment and return: SEO is not a one-off activity, so analysing overall ROI can be difficult at first. While you wait for SEO to kick in, track other key performance indicators (KPIs) and metrics such as page rankings and organic traffic.
- Disconnected tech stack: when your tools work in silos, such as website analytics software and a customer relationship management (CRM) system, it becomes hard to track the ROI of search engine optimisation (SEO).
How long does it take to break even with SEO?
A tough question. The time it takes for SEO to break even (the point where revenue covers the costs incurred) depends on several factors, including:
| Factor | Impact | Details |
| Running costs (software, services, staff) | High | With higher running costs you will often wait longer for SEO to break even, although a higher average order value can offset this. |
| SEO health | High | A website with better SEO health (a strong backlink profile, organic visibility and so on) will often see SEO results faster than a site with poor SEO health. |
| Sector | Medium | Your sector can also affect the SEO break-even period, although we have found that operational factors such as average order value and running costs have more influence. |
| Average order value | High | A higher order value, compared with a lower one, means a shorter time to value. |
How can I fix a low ROI from SEO?
If the ROI from SEO is not what you want, consider the following:
- Run a cost analysis: businesses with a lower average order value need more sales to cover SEO costs. For example, if your average sale is £15 but your monthly spend is £1,500, you need 100 sales just to break even. Look at where you can trim existing SEO costs so your spend fits your business model better.
- Review your SEO activity: analyse the problems and opportunities on your site, and look at how you have spent your time over the last few months. Have you focused on achievable goals, or on projects that take longer to complete?
- Get professional help: consider bringing in professional support (especially if you are new to SEO) or reassessing existing partnerships. For example, if your SEO agency has not been a good fit, a lack of ROI may be another sign it is time to find a new partner.
Are there other ways to measure SEO success?
Calculating ROI is not the only way to measure the success of SEO work.
Businesses can also analyse how their SEO strategy is performing through SEO analytics.
SEO analytics is the process of collecting and analysing raw SEO data to better understand SEO performance. It involves tracking data such as:
- Page rankings
- Bounce rate
- Average session duration
- Exit pages
- Organic search traffic
There are plenty of SEO analytics tools that can help you measure your SEO performance. By analysing these SEO KPIs and metrics (and others), businesses can spot opportunities to optimise their campaigns and keep investing in the channels that deliver a positive ROI.
Increase your SEO ROI with Visilay
Looking for the right partner to help with your SEO campaign?
Visilay is an SEO agency whose optimisation specialists have years of experience handling every aspect of SEO.
Want to know more? Contact us online to find out how our SEO services can help you get more conversions and revenue from your strategy.
