2. Basics of Return on Investment (ROI)
ROI =
(Revenue - Cost)
(Cost)
ROI of SEO =
(Organic Revenue - Cost of SEO)
(Cost of SEO)
3. Finding ROI Inputs - COST
Cost of SEO =
● The retainer fee / costs to an agency our vendor
● Cost of doing business in-house (freelancers, staff, etc)
Cost of SEO = $5,000/month or $60,000/yearly
4. Finding ROI Inputs - REVENUE
Organic Revenue =
● Revenue generated from organic search marketing
● Can grab this from Google Analytics (or use lead data to calculate)
Organic Revenue = Sales from Organic Search Channels
5. We need to find PROJECTED ROI...
ROI based on the amount of organic traffic we can
drive, relative to the investment made in our services.
ROI of SEO =
(Projected Δ Organic Revenue - Cost of SEO)
(Cost of SEO)
6. We’ll do this for 2 types of sites...
Ecommerce
Lead Generation
1
2
7.
8. ROI
(Projected Δ Organic Revenue - $60,000)
($60,000)
Projected
Δ Organic
Revenue
=
((Projected Organic Traffic x Conversion Rate)
Projected
Organic
Traffic
=
(Current Organic Traffic x Growth Rate)
(Current Organic Traffic)+
X (Average Order Value)) - Current Organic
Revenue
=
1
19. ROI
(Projected Δ Organic Revenue - Cost of SEO)
(Cost of SEO)
Projected
Δ Organic
Revenue
=
((Projected Organic Traffic x Conversion Rate)
X (Lead Value)) x Avg Sale Value
=
2
20. Projected
Organic
Traffic
=
(Current Organic Traffic x Growth Rate)
(Current Organic Traffic)+
1
Lead
Value
(Average Sale Value x Conversion Rate)=
Current
Organic
Revenue
=
((Current Organic Traffic x Conversion
Rate) x Leads to Customers %) x Avg Sale
Value