Google handles at least 8.5 billion searches every day, including many for local businesses and services. You understand the value of search engine optimization to improve visibility and increase traffic in a sea of other websites, but how can you tell if your efforts are working?

You need to calculate the return on investment value. Here's how to measure the ROI of SEO. 

The Importance of SEO ROI

At least 53% of web traffic comes from organic search. That means that SEO is still a crucial part of your marketing strategy. 

Your SEO return on investment will tell you whether the revenue generated by your strategy was higher than the cost (positive ROI), whether you broke even, or if you spent more than you earned. 

Analyzing this number will tell you whether your current strategy works or if you need to make adjustments. You can't determine how close you are to your business goals without measuring the ROI of your SEO. 

It's critical to understand how much you earn on every dollar you spend on SEO so that you can make the most of your investment. 

How to Measure the ROI of SEO

There are a few methods for calculating ROI. Normally, you take your net income and divide it by the cost of the investment. 

ROI = Net Income / Cost of Investment x 100

So, how do you measure the ROI of SEO? You take the profit (value of conversions) and divide it by the costs. 

ROI of SEO = (Value of Conversions - Cost of Investment) / Cost of Investment

If your SEO campaign generated $100,000 and your investment costs were $20,000, you'd plug in these numbers: 

ROI of SEO = (100,000 - 20,000) / 20,000 

The ROI equals four or $4 for every $1 you spend or 400%. 

Getting the numbers for the formula is the tricky part, so we'll cover that next. 

Calculate the Investment Costs

The first step is to figure out how much you're spending on search engine optimization. The costs include freelancers and agencies, monthly fees for SEO tools, website investments, etc. 

If you have in-house staff working on SEO full-time, include those costs. However, if your team only works on SEO part-time while also handling other tasks, you must keep track of their daily or hourly rate with a log or another method. 

Track Conversions

Next, you'll need a tool to track and analyze conversions. 

What you track and the value you assign to those conversions will vary from business to business. Therefore, this step depends on your goals and what you hope to achieve.

Ask yourself, how many of the leads convert to sales?

If you don't have a dollar value attached to a conversion, you'll have to determine worth with an estimated value. For instance, how much is a form submission worth?

Most digital marketing experts use Google Analytics to help them track website conversions. The best way to set up your Google Analytics so you can track conversions from different marketing channels is with Google Tag Manager. You can read more on how Google Tag Manager works below.

Make the Most of Your Investment

Now that you know how to measure the ROI of SEO, you can start analyzing. Find out what a good ROI value is for your company and what changes you need to implement to meet your goals. 

You can start making positive changes right now. At Orange SEO, we help businesses like yours gain more visibility on search engines through link building, local SEO, and more. Contact us today to learn more about our services and how we can help.