How to calculate RoI for SEO?

The Digital Marketing Podcast with Mandar Marathe

I get this question a lot from clients - Tell me one reason why we need to invest in SEO. The easiest way to convince your manager or your client is to project the Return on Investment (RoI) for SEO. How do you go about calculating the RoI for SEO? We use SEMRush (paid version) to estimate RoI for SEO. Here are the steps that we follow: 1. Put in your domain on SEMRush Organic Search and get a list of Keywords for which you are getting traffic. You will get search volumes,CTR, Traffic, CPC for entire set of keywords. Simply do Traffic x CPC for each keyword and sum it up to get the current value of SEO traffic. You could remove brand keywords from the mix to arrive at a true traffic worth. For e.g. Lets say there are 1000 KWs for which you are getting traffic of 5000 per month and the Average CPC is $3, then Traffic x Avg CPC = 5000 x 3 = 15,000. You can also apply a conversion rate to this value. i.e. If you are an ecommerce website with conversion rate at 1%, then you have 50 transactions from organic traffic. If the Avg. Cart Size is $50, then your SEO effort is generating revenue of $50 x 50 = $2500. So each visit to your website is worth $0.5 (50 cents). Now to project the RoI of SEO for traffic growth, you need to identify universe of keywords for which you want to get traffic. This means that the KWs for which your competitors are getting traffic and you aren't. 2. Enter competitors domains in SEMRush. Similarly, Get Keywords, Search Volumes, Traffic, CPC, URLs for which they are getting traffic. Find delta KWs or Pages on competitors website which are giving them traffic. See the content they have for pages that are getting traffic and estimate incremental traffic if we had better content. Apply average CTR% to these delta keywords and find how much additional traffic you would get. Repeat this exercise for 3-4 competitors. For e.g. Lets say you identified 2000 new keywords for which your competitors are ranking and you are not. These 2000 keywords are having 50k search volume. You apply your average CTR of 3% to 50k i.e. ~1666 incremental traffic if you created content that is better than your competitors. This 1.6k traffic is worth $800.