Choosing the right investments for your business can be difficult.
In a world where there are so many different types of marketing to choose from, the options can seem overwhelming.
Here, we delve into why SEO is the best investment that you can make in your business.
We’ll give a brief overview of what SEO is, talk about why it matters, and break down the customer growth that you can expect to see from focusing on SEO.
From there, we’ll compare the ROI of SEO to the ROI of PPC to help you understand which investment makes more sense for your business. We’ll wrap up with a timeline of when you can expect to make back the money that you invest in SEO.
Prefer video? Watch our video walkthrough explaining the ROI of SEO:
What Is SEO?
SEO, or search engine optimization, is an approach to marketing that helps your business show up at the top of search engine results pages (SERPs) when potential customers are looking for you online.
Why SEO Matters
A recent study conducted by SparkToro revealed that Google is the single-largest website traffic driver. Google accounts for 63.4% of total referral traffic for the average site (9x more traffic than any other platform).
In other words, if you’re going to invest in one marketing channel, you should invest in SEO.
How Do You Calculate the ROI of SEO?
“Okay, so you’ve sold me on SEO,” you might be thinking, “but how do I calculate the return on investment to justify the costs?”
The cost of growing your organic search traffic will vary significantly, depending on how you decide to do it. You can do it yourself, hire an in-house marketing employee, hire a freelancer, or hire a digital marketing agency. Within that, prices will vary significantly from one agency to the next.
At a high level, use the following SEO ROI formula:
SEO ROI = (value created by SEO – cost of SEO)/cost of SEO.
We’ll get into the cost of SEO in a minute (you can jump to that section if you want), but let’s start with the value of SEO and talk about how it drives sales to see why you should incorporate it in your marketing strategy.
Let’s take a look at the ROI of ranking for one sample keyword.
The ROI of Ranking for One SEO Keyword
Let’s say that your goal is to rank first on Google for the phrase “downtown Denver apartments.”
Ahrefs shows that this exact keyword gets searched 1,800 times a month.
The top page in a Google results page has a 28.55% click-through rate on average (based on 2023 CTR data). This means that ranking at the top of Google for the keyword “downtown Denver apartments” will drive 514 qualified visitors to your website every month.
If your website converts 1% of visitors to customers, this single keyword could drive 62 new customers to your website every year (a new customer every 5-6 days).
Now, keep in mind that not everyone will type that exact keyword into Google when they’re searching for a downtown Denver apartment. Some might search “apartments in downtown Denver” or “Denver downtown apts.” Those variants see an additional 8,000 searches every month.
If you rank first for half of those close variants, you’ll see an average of 137 new customers from search engines every year.
How much revenue would 142 additional customers per year bring?
Related: How Blogging Drives Sales [Directly and Indirectly]
How Does the ROI of SEO Compare to Paid Search ROI?
We talk to many business owners who spend the bulk of their marketing budget on Google Ads and Bing Ads. Naturally, they question why they should shift any of that budget to SEO.
Here’s why:
Paid ads only have a 6.11% click-through rate on average. Pages that rank first on Google organically have a 29.58% click-through rate on average.
That means that setting up Google Ads for this keyword (“downtown Denver apartments”) would drive 110 qualified people to your website every month. As of May 2024, you would pay $2.00/click.
If your website converts 1% of those website visitors into customers, you’d only see about one customer per month.
To add to that, that 1% conversion rate and $2 cost-per-click (CPC) means that each customer is costing you $220.
Google Ads can be a good investment for businesses that can’t yet rank for their target keywords. However, switching to SEO in the long term leads to exponential growth (and much more affordable customer acquisition).
Someone investing in paid search vs. SEO could expect a customer growth trajectory like this:
More on SEO vs. PPC budgeting here.
How Long Does It Take to See ROI from SEO?
One of the most frequent questions that we hear is, “How long will it take to see ROI from SEO and content marketing?”
SEO is a long-term investment in exponential growth. SEO takes 3-6 months to gain traction. Once you start to see traction, growth is exponential.
This ecommerce client is a perfect example of how to think about SEO.
- Months 1-3 drove minimal growth in organic traffic. Our team uses this time to learn about your business, build our growth strategy, and begin our implementation process.
- Months 4-6 drove gradual growth. Here, our team starts seeing initial SEO results from the initiatives that we focus on. Keyword rankings start seeing significant growth. We get closer and closer to ranking in the top 10 positions of search engines (where the majority of user clicks happen).
- Months 7-12 drove exponential growth. Organic traffic climbed over 535% by month 12 and organic sales grew with it.
- As of July 2024, JS Dental’s revenue coming directly from organic search is up 138.3%.
Related: How We Help JS Dental Achieve 500%+ YoY Organic Traffic Growth
Learn about our content marketing and SEO services to see how we get customers to the first page of Google.
Ready to start investing in SEO? Tell us a bit about your business so we can build the right SEO strategy to help you meet your growth goals.
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