In every investment, savvy businesses always look at the potential returns. If you are thinking about hiring an agency to lead your SEO campaign, you need to know if you are getting your money’s worth.
When you are talking about SEO ROI, a $1 return for each $1 investment is not breaking even. You should be getting some gains, such as brand awareness or social signals, for instance.
Another example is how much of an impression you have made on your target audience as a result of your SEO campaign.
These things are more difficult to quantify, and you need to parse more data to determine the returns.
But you always need to measure your ROI from your SEO campaign to find your weaknesses and strengths. In this way, you can recalibrate your campaign to yield better results.
The simple formula to determine your ROI is:
{Returns on Investment - Cost of Investment ÷ Cost of Investment}
Which Metric to Use?
However, the result won’t be wholly accurate since it only gives you a small peek into the big picture.
You need to first determine the metric with which you need to measure your ROI. You can choose from:
- Traffic
- Sales
- Ranking
- Leads
- Average time on page
- Search click-through-rate
Each metric will send you in a different direction, so it is extremely important to get rid of your cognitive bias. This is dangerous because your key performance indicators will end up discordant.
Average SEO ROI
Google has a more conservative computation of the average return on investment for its Ads. The search engine giant claims that the advertiser will earn a 200% yield on its investment. The figure translates to about two dollars for every dollar that you spend.
It means, if you are investing $5,000 in your Google Ads campaign, you will potentially earn from $8,000 to $10,000 in sales.
You can increase the ROI percentage to 800% if you advertise on the Google Search Network.
For e-commerce websites, WebFX says the average SEO ROI is $2.75 for every $1.
Your returns will also hinge upon the type of campaign you are running. For instance, SEO takes time to yield results.
You first need to cultivate the seed and ensure it grows robust and healthy. Hopefully, the benefits will be evergreen when you have solid SEO foundations. In contrast, a PPC campaign will ensure a more instantaneous result, but it will only last as long as the investment amount.
How Much Should You Invest in Your SEO Campaign?
Nowadays, you cannot compete without a viable SEO campaign. But companies still struggle with the question of how much they should spend on it.
The cost will also depend on whether you are doing your SEO campaign in-house or you are hiring an SEO agency. For an SEO agency, the monthly retainer cost will range from $1,500 and $5,000.
You can choose from the following:
- Percentage of your annual marketing budget - typically between 10-12%.
- Retainer package - which is typically a fixed cost and allows you to manage your budget easier.
- Scale budgeting - which means the cost will depend on your business goals.
- Match your competitor - which is more difficult unless you have an insight into their total marketing budget.
Lastly, you must know that SEO takes time. On average, you need a sustained investment for about six months before your efforts bear fruit. So, do not be disappointed if you cannot see the SEO ROI right away.
