How to Quantify the ROI of SEO?

  

How to Quantify the ROI of SEO?

Increasing over the past few weeks, as I made Search Engine Optimization presentation to prospective clients about optimizing their websites, most were impressed with our experience, our professionalism, and our esteemed client list. Most noticeably, they were keen to understand the kind of work that goes into optimizing and promoting a site to the top of search engine result pages.

The proposed quotation amounts weren’t high, specially knowing the amount of dollars these bigger clients spend in print advertising, media and marketing. In fact, I would say the required total spend was a minuscule amount of their overall advertising dollars.

Yet, at the end of the presentation, the marketing manager would often look at me and say - "Well, I understand what you have done in the past, and we would like the same for our site too, but I will have to present this to my senior management, and one of the things they are going to ask is - What is the ROI? What is the "real" benefit? How do I quantify the benefit in dollars and cents?

According to Tom Hopkins, the sales guru, if this happens, it means that I have failed to educate and communicate the value of the proposal to the client. This question won’t pop-up if the client sees enough value in the proposal. I thought about it for some time after it happened the third time in as many months… is it that I am unable to communicate the value, or is it that these decision makers just want to be double sure, to save their backside about spending on something that is difficult to measure.

But the Marketing folks are not completely at fault. After all, most prospects may see your top ranked site and visit you, but the fact that they made initial contact after seeing the Sponsored Ad or the High Organic listing is not captured and quantified. So this leaves the marketing managers to fend for themselves on how to quantify the benefits of spending on getting a high rank in search engines.

Admitted these managers are very new to spending online, on sponsored advertisements or on organic results, banner ads, link building or going to Facebook or social networking.

And the more I think, the more I wonder how they measure returns from their print media - a full page newspaper ad may cost $7,000 to $12,000, and it only lasts a day at the maximum. And if your prospect fails to see it today, you’ve got to spend the money again tomorrow.

According to Ogilvy, the advertising guru, "Half of advertising dollars go to waste. The problem is in identifying which half! "

On the contrary, on the Internet, if you build your rank in organic listing, chances are that if you fail in getting the attention of your prospect today, your listing will still be there the second day your prospect is browsing the web. After all, organic SEO and link building efforts don’t disappear the day you stop paying your SEO consultant.

You still retain that position for a long while, and even if the rank declines after some time, all the links and page rank you’ve built during the SEO work still stays, and will continue to bring you prospects and visitors to your site for years to come.

After all, most of the work done stays in position, online forever, and altohugh it takes continuous effort to maintain or better your ranking in organic results, you are never worse off in the long run for having spent the time, effort and money in building a brand and a rank for your website.

Only education and online experience will help these marketers in understanding this. Specially after they do some SEO, Link Building or PPC themselves to get their hands wet.

These days, I try not to pitch for clients who are completely ignorant about SEO. For it takes a lot of time to build their trust and knowledge on the part of the marketing folks to appreciate the long term benefits of SEO. If they are completely unaware, they won’t be able to appreciate the work required to to optimize a website, will struggle to quantify the ROI, just haggle over the price, and falter in getting the required buy-in from the decision makers.

Instead, I spend more time with clients who are well aware of SEO, its benefits, and know that they can’t do without SEO. These people have seen how their small time competitors are showing all over the first pages of Google and Yahoo, and they themselves (the big time companies, SME or MNCs) are nowhere to be found in the online world.

Rather than we approach them, they approach us. So instead of haggling over the ROI or the pricing all the time, we spend constructive time on doing keyword research, identifying linking strategies and working to improving the Pay-per-click ads. It is a lot easier to consult if the customer sees a need, comes to us for filling the gap and works together to build value for the business.

A Bit of Salt For Companies New to SEO
If you are looking at SEO as a magic pill, don’t. SEO alone can not save your organization. You need to have a good backend process to capture and process the online leads generated by your SEO efforts. If you have not mastered your back end processes, then you may be able to generate a high number of clicks, views or impressions, but most people will bounce off the landing pages immediately.

Now you can’t blame the SEO company for not getting the traffic or the high rank because you are not able to convert that customer click into a sale at your website. ROI is a combination of a lot of factors - online, offline, processes, people, partnerships and good sales and service practices. Fail in anyone and there is no ROI to measure.

After all, Search engine optimization, Pay-per-click advertisement, Link exchanges or Banner ads only accomplish in getting you a lead or a prospect to your website. If you fail in converting that prospect into a sale, or fail in capturing the fact that this came as an online lead, you are not measuring the ROI of SEO.

Ask yourself this question - Do I have the capability to capture and measure this or not? If you have this capability, then you can measure the ROI of SEO or PPC by looking at the number of leads, amount of traffic, sales conversions coming from online or off line world.

Best of Luck in your online pursuits…

Cheers,
Vinai

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Comments

Hi Vinai,

Great great post! As a Social Media and SEO consultant, I agree with what you say about going to companies that understand and realize SEO benefits. This is huge as compare to education companies who know nothing about SEO.

And I like how you phrase ” …Search engine optimization… only accomplish in getting you a lead or a prospect to your website…fail in converting that prospect into a sale, or fail in capturing the fact that this came as an online lead, you are not measuring the ROI of SEO. ”

This is very truth.

Keep up the good work.

Regards
Jeff

Great post! You need to let the clients understand how seo will help their website rank in search engines.

Two ways I would look at seeing whether my SEO is reaping any rewards are to monitor two aspects; traffic and page rank.

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