How can I calculate ROI for SEO?

March 22, 2018

30-second read:

There are no guarantees in SEO-ROI forecasting, but there is a solid methodology that uses current visits, conversion rate and order value to establish the dollar value of your current traffic. It plots this against the estimated cost of recommended SEO fixes to reveal how much more traffic you need to achieve positive SEO-ROI in your campaign.


The full version:

It’s a well-known problem: establishing the return on investment (ROI) for search engine optimisation (SEO) is tricky – especially for sites that do not offer e-commerce.

We’re prepared to go out on a limb to say that any SEO provider who makes blanket upfront guarantees that they can deliver a certain increase in your site traffic for a certain dollar figure is being deceptive (or doesn’t know what they’re talking about). In fact, the SEO industry has been fighting against these sorts of claims by shonky providers for over a decade.

Even for sites that do offer e-commerce, any decent SEO-ROI projection first requires that your SEO provider has full access to the site’s data and that the site is already properly optimised for conversionsWhy? Well at Mash, we typically look at three factors to calculate a projected ROI for a certain SEO budget:

  1. Current average organic visits over a set period
  2. Current e-commerce conversion rate
  3. Average order value.

We’ll see why these three factors matter through the rest of this article.

ROI of 19.7% from a $10,000 SEO campaign – an example

Let’s work through how we do it. First, let’s make up a client called Fashion Boots Online (FBO). Let’s make it a mid-sized e-commerce footwear retailer whose site traffic is not seasonal, let’s also say it has the following three factors:

  1. Average of 10,000 visits over 3 months from organic searches
  2. E-commerce conversion rate of 0.68%
  3. Average order value of $176.

What we do next is conduct SEO research on FBO’s behalf. Let’s say, our research finds that FBO needs $10,000 worth of SEO work. Therefore, our SEO-ROI break-even point is $10,000 – our SEO campaign must generate sales for FBO that are above that figure. How does this translate for FBO?

57 sales to break even

At $176 average sale value, 57 is the number of additional orders required to pass $10,000. (Okay, so $176 X 57 actually works out to $10,032, but you can see where we’re coming from). Now, we have to think about 57 sales in terms of site visits…

8,383 organic search visits to reach 57 sales

How did we get that figure? Well, 57 sales divided by the conversion rate of 0.68% yields 8382.35. To spell it out: The SEO campaign must capture 8,383 visits from search engines during the contract period to deliver the minimum of 57 sales needed to reach positive ROI. It’s a nice, solid, simple KPI. There is a but though…

SEO rarely starts from the best-case scenario

Let’s say FBO’s site has a fairly common technical issue: the product pages lack basic optimisation. In addressing this issue, we expect to see a natural increase in traffic volume. This can be estimated through a calculation that takes in current ranking positions, CTR and search volumes. We don’t need to go into that number crunching right now, but one of the core tenets is that a ranking of #1 on Google will achieve a CTR of 30%.

So, if we estimate the SEO plan (worth $10,000) will increase FBO’s organic search traffic by 100% (which is not unrealistic, given our track record of SEO improvements), that’s an extra 10,000 visitors over the campaign period.

So 8,383 is what we need to get to break even and 10,000 is what we project we will get. If the conversion rate remains the same at 0.68%, then 10,000 visits should achieve…

68 sales projected

If the average sale value remains the same (there’s no apparent reason why it would change) these 68 sales represent…

$11,968 revenue projected

Calculated against FBO’s $10,000 investment in SEO that works out to…

+19.7% ROI (rounded)

And that’s a pretty good investment in anyone’s books.

Capturing the results of good SEO

This example also shows the importance of a site optimised for conversions. To adapt an old cliche, SEO leads a horse to water (your site) but can’t make it drink (convert). Optimising conversion rate is a practice of making it as easy and compelling as possible for your site’s visitors to do what you want them to do. That could be clicking the “buy” button, picking up the phone to call you direct or even something else. It’s a discipline all to itself and the topic for another article though…

So, beyond SEO, a site might also need conversion optimisation to best capture the new traffic the SEO investment brings in. And that’s where the actual dollar return in the ROI comes from. Until then all your SEO is really doing is bringing more people to your door and maximising your potential. It is still up to your sales process to do something with all the new leads.


Top SEO-ROI tips

  • SEO takes time to have an effect, the ROI isn’t instant.

  • SEO makes improvements that help your results, this is not the same as “buying the result”.

  • You can have great SEO but bad conversions, and thus ROI, because your website isn’t well built.


Through many years of a changing internet landscape and states of the economy Mash Media constantly deliver what I believe is as good as you can get! We receive responsive personalised service that I have not experienced with any other provider, large or small. Forget the rest, you won’t be disappointed, Mash media delivers hands down the best return on investment in the online marketing world. Whilst there is never a guarantee that things remain the same (especially when technology is involved), you can be assured that the team at Mash Media will be one of the first to adapt and take advantage of on your behalf. This has been my experience to date and I have no reason to expect this to change.
John Travelli - Ceramo.
I have the honour ​of​ writ​ing​ a testimonial for Mash Media and in particular its owner Sharney Ryan. I have been with them for now over 5 years​! And wouldnt consider going anywhere else again.​ The​y are a great team who have a​ genuine interest in helping my practice succeed with Marketing, Adwords and Website​ & SEO has been superb.Prior to them advising me i had spent significant sums with large organizations, only to find that much of the budget was spent on their overheads and profit before being applied to my business.This company ​truly ​delivers.
Dr Ron Binetter - AIES.
I have been dealing with Sharney for many years and followed her from her last posting in a Corporation as Sharney displays skills and knowledge in this minefield of an industry. I am very pleased to be part of Mash Media’s growth from a one-man band to where they are today with employees and offices all over. We are treated well and never pushed to increase our spend like the big guys do. Sharney and her team make our digital life clearer and easier.
Richard Wilson - Richard's Tyre Power.
If there is a better Digital Agency going around than Mash Media, then I haven't found them. And I have been looking for a long time!! We had an urgent need to get a site up and Sharney and Ben turned it around in 72 hours. Took a brief, clarified the brief, made the brief better than I thought possible. A great overall experience and just goes to show, botique is better!
Vincent Kelly - Viridor.
Sharney and Michael made sure they understand our business and Mash Media have an excellent campaign manager in Michael. His attention to detail and his hands-on approach to optimising our adwords campaign is what brought us back to Mash Media. We tried another campaign manager during the economic downturn, but came back to Mash Media when it became clear they could convert more enquiries, in spite of the economy.
Andrew Langdon - Sentinel Self Storage.
4 years and counting with the awesome Mash Media Team. They have been doing a great job of looking after our Adwords. More recently they have created a couple of different tailored websites that proved to save our adword cost by over 40%.......these websites paid for themselves in 6mths over the old clunkers. Superb results. Lovin’ their work.
Alex Brown - The URECO group of companies.