Most people donâ€™t set fair expectations for a search engine optimization (SEO) effort. I was reminded of this while speaking with a prospect, who asked what kind of a return on investment (ROI) he should expect from his SEO engagement.
â€œIâ€™m expecting exponential growth, something like 20X the traffic that Iâ€™m currently getting,â€ he told me. â€œIf we can get a number 1 ranking for this one keyword, that should be enough to get us there, donâ€™t you think?â€
One Top Ranking Isnâ€™t Enough
Your goal canâ€™t be to rank number 1 on one keyword. Thatâ€™s not a goal.
What happens if you get the top ranking for your keyword and something happens, such as a major algorithm tweak by Google? Youâ€™ve then lost your ranking for that one keyword. What then?
Though everyone has one of those keywords that they salivate over, a solid, long lasting presence in the search engines is one in which your presence is balanced across a number of keywords.
A â€œgoalâ€ should be increasing traffic and â€“ at the end of the day â€“ growing your business (more leads, more sales, and ROI).
SEO vs. Paid Search
Many people find it easy to budget for paid search. They understand the basic premise:
- Spend $1 per click.
- Set a budget of $10,000.
- Get 10,000 clicks for keywords I want to â€œrankâ€ for.
But what if you could potentially get 20,000 clicks by investing that same $10,000 in SEO rather than PPC advertising? Wouldnâ€™t that be an even better deal?
To be fair, the above example is an over-simplification only intended to make a point. This 20,000 might represent a 10 percent increase in â€œgoodâ€ traffic â€“ meaning traffic thatâ€™s relevant, converts into a lead or sale, or at least shows some quality measurements (e.g., time on site).
After telling this to the prospect, he paused. â€œIâ€™ve never really thought about it that way.â€
SEO ROI: No Guarantees?
Donâ€™t get me wrong. I understand that SEO is very different than PPC.
With SEO, there are no guarantees. There is the chance that, for whatever reason, you will never realize a solid ROI from SEO. Some of these reasons might include:
- You hired the wrong people/firm for SEO.
- Your IT team canâ€™t do whatâ€™s necessary to fix things that will lead to better rankings/traffic.
- You canâ€™t / wonâ€™t create content which will lead to rankings/traffic.Â
- Expectations were out of whack with reality.
- Thereâ€™s no search volume for the keywords youâ€™re interested in targeting â€“ no amount of number 1 rankings could ever equal ROI.
SEO can be high risk, high reward. When I say â€œhigh risk,â€ Iâ€™m not talking about the kind of high risk associated with the possibility of being banned/penalized in the search engines for such tactics as hacking, cloaking, spamming, etc.
My point is that, even given that you work within the search engineâ€™s guidelines, there truly are no guarantees because we donâ€™t own the search engines. Search engines are a third party we have zero control over.
A â€œGoodâ€ ROI on SEO
If youâ€™re investing $10,000 per month in an SEO effort (be it in staff costs or with an agency), you need to get a sense as to what a â€œgood ROIâ€ looks like.
Perhaps youâ€™re one of many who have noticed that cost per click in paid search is getting higher and higher for the keywords that youâ€™ve been targeting. Perhaps itâ€™s gotten to a point where itâ€™s challenging to make a case that the money spent is worth it?
Letâ€™s say that you sell a widget for $100, and you net 30 percent from each sale ($30). If your average cost per click is $1 and you convert 10 percent into a sale, thatâ€™s $100 invested in paid search for 100 clicks for a $100 sale in which you netted $30.
Unless you care about the branding value (which I would argue folks should consider, at least a little bit, when theyâ€™re looking at valuation of PPC and SEO), thatâ€™s not a good ROI. In fact, thatâ€™s noÂ ROI. Thatâ€™s a loss.
What would you need your investment to be for this to pay off? Letâ€™s do some math: out of every 100 visitors, we convert 10 percent into a sale in which we make $30. We would need 3,000 visitors to get 300 sales. Those 300 sales would be worth $30,000 (300 X $100/each) and we would net 30 percent of this ($9,000).
Now we have something to work from.
Do we feel that we could put $7,000/month worth of resources (money/time, etc.) into a SEO effort to help to achieve the goal of gaining 3,000 visitors? Or, perhaps the conversion rate is way off and itâ€™s more like 5 percent?
Perhaps we need 6,000 visitors? Are we willing to fund this â€œat a lossâ€ (during the initial months of research, etc.) in order to hopefullyÂ realize the potential ROI for the months thereafter?
Tools to Help Determine the Value of SEO
Once youâ€™ve mapped out how, and/or if, SEO can drive ROI then you can begin to discuss how much value/opportunity there may be and what the risks and rewards might be.
Iâ€™ve mentioned these tools before, but to get a sense of what the potential value of an SEO effort might be, I would recommend SEMRushÂ and SpyFu Recon. There are certainly many other providers which can also help with an opportunity assessment and I welcome readers to comment below and share with others tools that you might use and why you like them.
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