Are You Measuring Your Actual SEO Return on Investment?

Coming from an SEO background, I have to say that SEO is a world full of myths, hijinks, frustration and occasional glory. The right SEO recipe can turn a $50 start-up investment into a money making machine, and the wrong SEO recipe can strike major blows to a multimillion dollar a year business .

It’s a world where small businesses are under intense scrutiny by Google and where big brands can get away with murder. Even though it’s one of the toughest marketing activities to successfully wrangle (and one of the most difficult to measure), many companies are increasing their SEO budgets year after year.

And With All This Money Being Spent on SEO…

money being spent on SEO

In all my years of SEO consulting, I haven’t come across one single business that actually measures their SEO return on investment (ROI). They’ll measure their keyword rankings, their traffic, and they might even measure their conversions. However, I haven’t seen a report in my life that shows how much money SEO made a business for a given year.

On the surface, the above statement makes these businesses seem neglectful, mismanaged and a little reckless. However, what I think it all comes down to is that these businesses simply know they need search engine traffic. And when the search engine traffic does arrive, they can sense something happening: they notice sales are up, buzz is up, and “things are happening.” Basically, they get the feeling that SEO has helped.

I don’t blame the marketers and/or the marketing departments of these businesses. Marketing is hard. There is a lot of work to do all the time. Whether it’s attending countless meetings, creating lengthy reports, or their boss making them jump on the hottest social media trend, tracking SEO ROI is a big project that most likely gets put on the back burner. Plus, tracking SEO ROI with currently available tools is really, really hard and most likely inaccurate.

One Day I Was Digging Around KISSmetrics and…

It hit me.

I was trying to figure out if all the effort we put toward SEO was paying off. I started my investigation by looking at SEO ROI the wrong way. Sitting there in “auto-pilot” mode, I was looking at all the search engine traffic that had resulted in a conversion based on per session visits. I was thinking of SEO ROI like an ecommerce website owner would:

The visitor comes to the website off a search query and…did they buy or not?

The problem with this way of thinking is that SaaS products have a long sales cycle. Any person who comes to one of our websites for the very first time might not become a lead (or a sale) for months down the road. Therefore, shouldn’t our tracking efforts be able to tag a visitor throughout the lifetime of this sales cycle?

Eureka! That’s Exactly What KISSmetrics Does!

At KISSmetrics we like to say, “We track people not pageviews.” Your traditional analytics packages tend to focus on per session metrics and not the weekly, monthly and yearly interactions individuals have with your website. That’s why KISSmetrics is so powerful: KISSmetrics gives you a holistic view of what your website visitors are doing on your site over a long period of time.

If you really want to track SEO ROI, then you need software that tracks visitors over a long period of time before a conversion is made. If you just look for immediate conversions made by SEO traffic on a per session visit, then you might get falsely disappointed. You may think that SEO is not providing any reasonable return per the number of conversions.

But if you are able to track people who come from search engines for months after the first time they visit your site, you might find something completely different. You may see an enormous return from your SEO efforts.

Remember, people who use search engines – that includes all of us :) – are not always impulsively shopping. Many times, they are doing research or simply surfing the web. The first time they come to your site they might not become a lead or a sale. Regardless, an important marketing touch is made that first time they arrive on your website. It becomes important to understand the relationship from the moment of first impression to the day the visitor becomes your customer.

A Peak at the SEO Metrics You Can See With KISSmetrics

KM Revenue Search Terms

Looking at the KISSmetrics report above, you can see that you are able to track:

  • The total revenue generated from ALL your search terms.
  • The LIFETIME VALUE associated for all your search terms.
  • The churn rate of the keywords you are targeting!

Now, you can really see if your SEO efforts are targeting the right place.

How KISSmetrics Tracks SEO ROI (Illustrated)

We decided to make an infographic to illustrate how all this works (click on it to see a larger view):

step-by-step look roi of seo

Click here to view a PDF version of this infographic.

You Can Learn a Lot About Your Customers This Way

This is a better way to look at your internet customers and your analytics. By shifting your point of view away from instantaneous interactions to a more long term perspective, you will understand more about how your website visitors interact with your website. Ultimately, this is how you devise better conversion and sales strategies.

KISSmetrics is Also Perfect for PPC, Social Media and Blog Marketing

I started this article by focusing on SEO, because this is how the whole thing hit me. But the reality is that anyone spending money on any internet marketing activity should be using software that tracks visitors for long temporal durations. All you need is KISSmetrics and utm tracking on your URLs!

Sign Up for a Free Trial of KISSmetrics

try KISSmetrics for free

KISSmetrics was designed to help you increase your website revenue potential. Try our free trial and we’ll be more than happy to help you reach your revenue, conversion and website goals. Click here to get started.

About The Author: Sean Work is the Director of Marketing at KISSmetrics. To keep up to date on future KISSmetrics articles, please follow him on Twitter.

  1. This looks really interesting. Where do you get the keyword data from? For one site, nearly 50% of terms are (not provided). In fact, (not provided) is my top keyword for that site, 38 of the next 40 keywords are brand terms, and the first provided non-brand term sent a statistically negligible percentage of organic search visits – 0.143%.

    Would I get value out of this methodology? I mean, I could see that organic sent revenue, but I couldn’t give the ROI for a specific keyword, right?

    • Hi Justin,

      Yeah, the (not provided) keyword can definitely get in the way. Google sends the same data on keywords to every analytics tool (including KISSmetrics). So there’s no way for us to see which keywords are within the (not provided) group. You’ll still have the ROI of (not provided), you just won’t know which keywords are a part of that group. For everything else, we give you the ROI of individual search terms.

      With our reports on referrers, you can also compare the traffic from google.com to all of your other traffic sources to get a better sense for how much revenue your search marketing is contributing. If it’s driving the majority of your revenue and most of your keywords are branded, a large portion of your customers are likely coming from word-of-mouth.

      And when your traffic begins to scale to the point where other keywords are showing up, you’ll know whether or not they’re making a difference to your bottom line.

  2. this is an eye opener

  3. Hi Sean! This is really interesting! When I started reading your post, I was quite wondering on how will you pull that off. The infographic totally helped a lot and it makes perfect sense! I’ll definitely sign up for the free trial version and check it out! Thanks! :)

  4. Ahh! This is brilliant but also maddening. I’ve been doing the same sort of visitor flow and conversion tracking in a more ad-hoc way with GA and, like Justin + Lars are discussing, am having my efforts screwed in a pretty huge way by the fact that the majority of my google referrals have “keyword: (not provided)”. For those unaware, Google decided about a year ago that, nominally to protect user privacy, it would not pass along the search term along with the referrer header info for any logged in users. Basically, I’m in the dark when it comes to gathering data about the results of my keyword optimization work. All the same, it does look like there’s a lot of strong value in these SEO additions to KISS so thanks.

  5. I think it is the most important data ! I’m happy because i’m measuring my SEO return on investment with the Conversion Tag of Google Analytics.
    When you have the good tool, it’s very great.

  6. Great Effort . I like this post .
    And now I’m going to start kissmetrics.

    Thanks!

  7. hey Sean !
    great effort. a very informative post. and yeah infographics helped us a lot to grasp the concept.
    thanks.
    Matt

  8. well, I think if you are able to rank your keywords then you will get your ROI one day !

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