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ROI of SEO: How Much is Position One Worth?

Good SEO is critical for any commercial website and the business which owns it. All site owners can understand the benefit of improving a site’s SERP ranking. As well as the knock-on effect of boosting its traffic. Getting more traffic to a site is obviously something to shoot for. Those site owner’s, then, can appreciate the worth of SEO.

That worth, however, has traditionally proved tough to quantify. On this very blog, we’ve talked at length about the cost of SEO. SEO services are provided according to different types of payment structure. There’s always an ultimate figure, though, to put on how much a business spends on the services.

What there often hasn’t been is a monetary figure to explain the value delivered by improving a site’s SEO. That’s where this guide to the ROI of SEO comes in. We’re going to talk you through a way that you can assess the ROI you might expect from improvements made to your SEO.

 

Estimating ROI

The below graph plots estimated revenue against SERP ranking. From position ten up to position one.

 

 

It’s a visual representation of the added value that moving up the rankings can deliver to your business. We’re going to show you how you can generate your own version of the graph. This guide is designed to be as accessible as possible. We’re going to move step-by-step and keep things nice and simple.

Creating your ROI of SEO graph starts with a simple Google Sheet. To find the sheet, all you need to do is to head to bit.ly/return-on-seo. When you do, you’ll see something like this:

 

 

The version of the sheet you see first isn’t able to be edited. In order to do what you need to the sheet to create your graph, you have to first make you own copy of it. Simply click ‘File’ and then ‘Make a copy’ as shown below:

 

 

Once you’ve made your copy, you’ll then be able to edit the figures in the fields highlighted yellow. These fields are for the details of your site which will be used to generate your SEO ROI graph. They include things like search impressions, SEO position and conversion rate.

 

 

You have two choices when it comes to using the sheet. You can either use it at an individual keyword level or apply it across a broader series of phrases. Your choice will determine the figures you enter into the fields. Your graph will be more informative if you create it based on a broader group of phrases.

Doing so does make it more difficult to know the exact figures to enter into each field. For example, you’ll need to enter an estimate of the number of monthly search impressions on Google across the phrases. You’ll also have to take an average of the current SEO position for the phrases. In the below example, the estimate and average respectively were taken as 100,000 and position 10.

 

 

The next field on the sheet is to provide a frame of reference for how much organic traffic is worth. You need to enter an estimate of how much you’d pay to bid on the relevant keyword or phrases through paid search. It’s the same idea if yours is a publishing site, but you’d enter a value for CPM rather than CPC.

 

 

The next two fields on the sheet are for providing details of conversion rates. The first is for your site’s ‘land-to-lead’ conversion rate. That’s the percentage of visitors to your site that will convert into business leads. For a lead-gen website, 10% is often a fair estimate. For an e-commerce website, something like 2% is likely to be more accurate.

‘Lead-to-sale’ conversion rate is the next field to fill in. If you have an e-commerce site, you simply need to enter 100%. Your ‘lead’ generated is a sale in itself. For other sites, you’ll want to enter the rate at which initial leads convert into actual sales. In our example, we’ve assumed a lead-gen site with a 10% land-to-lead rate and a 50% lead-to-sale rate.

 

 

The next quartet of fields all relate to how much a new customer may be worth to your company. You need to enter your business’s average sale value and the profit margin you make on each sale. Then, you have to enter how many sales you might expect to make from a single customer in a calendar year.

For lead gen sites, that last figure will often be one. In the case of e-commerce sites, it depends on how often customers return to your site for repeat orders. Finally, enter an estimate of how long you might expect a customer to keep providing your firm with business.

 

 

The last thing to do with the table on the google sheet is to choose your website type. That final field features a dropdown menu from which you can choose the relevant option. In our example we’ve chosen ‘Lead gen’ as the example figures we’ve entered are for that type of site.

 

 

The ‘Calculation’ Tab

The figures you enter in the table propagate through to the other tabs on the google sheet. The third of these is the ‘Calculation’ tab, where you can see a whole host of further information. It includes metrics worked out from the figures you’ve entered. As well as other details required to estimate the value of each ranking position.

 

 

Some of the detail shown on the ‘Calculation’ tab is based on optional fields on the ‘Questions’ tab. You can view these fields by clicking the ‘+’ icon toward the bottom of the sheet:

 

 

Filling out those fields gives the calculation some additional inputs. They’re not critical to the successful creation of the ROI graph, however. You don’t need to fill them in but can do so if you wish to adjust the ROI forecast.

 

The ‘Output’ Tab

The ‘Output’ tab is where you’ll see the fruits of your labour. Click it and you’ll see a beautiful graph based on the information you’ve input into the google sheet.

 

 

The graph displays an estimated profit by ranking position. That will be for the keyword or group of phrases you chose to focus on. Our example figures show that position ten would net a profit of £142,800. Position one, in comparison, would result in profits of £1,715,700. That puts a – very significant – monetary value on moving up the SERP rankings.

 

 

What the table above the graph also shows is the % increase in profit with each jump in position. That’s a great piece of information to have. It shows you how valuable, in terms of your overall profits, a relatively minor improvement in SEO can be.

 

 

That’s all there is to it. Follow the simple steps detailed above and you too can estimate the ROI you might enjoy from improving your site’s SEO.

If you have any questions about this guide, feel free to leave a comment below. Or, to find out more about improving your site’s SEO, you can get in touch with Accelerate’s SEO experts.

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