Here, we delve into why SEO is the best investment that you can make in your business.
We’ll 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.
But first: the AI question.
Does SEO Still Matter in the AI Era?
Should I be focusing on search engines in the midst of the rise in ChatGPT and other large language models?
I get this question daily.
AI tools matter a lot, but there’s a small sliver of the information discovery market today.
ChatGPT is the market leader of the LLMs. Yet, Google received 373 times more searches in 2024 than ChatGPT.
Building upon that, Seer found an 87% overlap between ChatGPT Search citations and Bing’s top 10 search results. They also found a 56% overlap between ChatGPT Search citations and Google’s top 10 search results.
Perhaps your immediate response is: “Yeah, but AI usage is growing rapidly. AI will take over far more of the market in the next five to ten years.”
I agree. AI should be at the front of your mind as you think about customer acquisition in the next five to ten years.
- Search engines are how your customers currently find you. If you don’t focus on SEO, your competitors get those customers while you wait for ChatGPT to send you customers in five years.
- Optimizing for search engines, without accounting for LLMs, will get you 56% of the citations from AI tools. Add in items like LLMs.txt files and clear positioning and you get even closer.
So yes, SEO still matters a lot.
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.
There are a few different ways to calculate SEO ROI. However, let’s start by understanding whether you’re looking to forecast potential SEO ROI or see your actual ROI today.
Forecasting Potential SEO ROI for the ROI of Ranking for One Keyword
Our favorite way to forecast potential SEO ROI is to look at a realistic calculation of the ROI of ranking for a single high-value keyword.
Let’s say that your goal is to rank first on Google for the phrase “luxury apartments Denver.”
Ahrefs shows that this exact keyword gets searched 1,100 times a month.
The top page in a Google results page has a 25.84% click-through rate on average (based on 2025 CTR data). This means that ranking at the top of Google for the keyword “luxury apartments Denver” will drive 284 qualified visitors to your website every month.
If your website converts 1% of visitors to customers, this single keyword could drive 34 new customers to your website every year (a new customer every 11-12 days).
Now, keep in mind that not everyone will type that exact keyword into Google when they’re searching for a high-end apartment. Some might search “denver luxury apartments” or “luxury apartments downtown Denver.” Those variants see an additional 700 searches every month, or 22 customers per year.
How much revenue would 56 additional customers per year bring?
Related: How Blogging Drives Sales [Directly and Indirectly]
Now let’s shift directions and discuss how you can calculate your current SEO ROI.
Determining Your Current SEO ROI by Tracking Direct Sales from SEO
This is going to be the simplest to calculate and least nuanced approach to evaluating your SEO performance.
Calculate how much revenue came from search engines, subtract how much you invested, and divide that number by how much you invested.
Let’s look at a tangible example for an ecommerce business selling pillows:
You log into Google Analytics and see that organic search accounted for $100,000 in revenue last month.
If you spend $10k/month working with an SEO agency, your simple ROI calculation would be 900%.
Let’s look at a tangible example for an insurance business selling disability insurance:
Assume a new customer represents $2,400 in revenue. Your close rate on converting leads into paying customers is 10%.
You log into Google Analytics and see that organic search drove 500 leads to your site last month (an estimated $120,000 in revenue).
Assume you spend $10k/month working with an SEO agency. Your simple ROI calculation would be 1,100%.
- What’s your customer lifetime value? Perhaps the average customer comes back to your site to repurchase from you four times in their life. Your actual SEO ROI should be closer to 4x this calculation.
- What’s your margin? A 900% ROI of SEO is a no-brainer investment if your profit margin is 20%. If your profit margin is 10%, SEO may not help your cash flow today, but it will boost your cash flow in the future.
Determining Current SEO ROI By Tracking Money Saved Via SEO Investments
Imagine nobody found your website via a search engine like Google. Instead, you had to pay for each customer coming to your site from Google Ads.
Your marketing bill would likely be a lot higher each month.
Getting people to your site from SEO saves your business money each month by not requiring you to pay for that customer via Google Ads.
We use Ahrefs’ “Organic Traffic Value” to calculate how much money this saves you each month. For example, Ahrefs estimates that it would cost Intergrowth $5,800/month in Google Ads expenses to replace all of our traffic from search.
If someone else is offering to pay $4.95/click for that keyword, we can assume they will get at least $4.95 in value from the average visitor reaching their site from that keyword.
Determining Current ROI of SEO Through the Indirect Value of SEO
The least tangible factor in calculating SEO ROI is the indirect impact of SEO efforts. Let’s look at a few examples:
Increasing Referrals via SEO
Your SEO team writes an article about how to properly wash your high-end pillow to prevent it from being damaged in the wash.
Your SEO team then collaborates with your email marketing team to ensure that new customers receive an email a week after purchasing, which encourages them to read this blog post.
A customer follows the instructions to properly wash the pillow and recommends the pillow to three friends, in part because of how well it holds up after hundreds of nights of sleep.
SEO didn’t bring you that customer, but it contributed to this customer becoming an advocate and recommending your product to others.
Reducing Customer Support Costs via SEO Campaigns
Your SEO team works with a customer support representative to write a blog article about how to determine the right pillow size based on your sleeping preferences.
Twice a month, your customer support rep receives an email asking how to determine the right pillow size to purchase. Instead of spending 30 minutes typing a response, they send off this blog article, cutting their time per response from 30 minutes to 5 minutes.
What’s the value of saving 50 minutes/month in customer service time?
Probably not too much, but what happens if you scale this approach and start saving 20 hours/month?
So How Do You Calculate the ROI of SEO?
Our preferred approach is to look at several SEO return on investment calculations to come up with a benchmark for your ROI.
1. The Range of Direct SEO Revenue.
This looks at two numbers: the high-end and low-end estimates of how much revenue comes directly from SEO.
- How much revenue does Google Analytics attribute to Organic Search?
- How much money did you spend on SEO resources (full-time employees, contractors, agencies, etc.)?
- Log into Google Search Console’s “Search results” tab. Calculate what percentage of clicks to your site came from branded search terms (ex. Your company name, misspellings of your company name, names of branded products, etc.)
The high-end estimate will be to assume all Organic Search revenue came from SEO. The low-end estimate will be to assume that none of the branded search traffic can be credited to SEO. If 50% of your organic search traffic came from branded terms, cut the Organic Search revenue calculation in half and treat that as your SEO-generated revenue.
The actual number will be somewhere in between these. Your branded searches will grow over time as your business grows. Some of that will come directly from SEO efforts; some will come from other channels like social media.
2. Money Saved Through Current Search Rankings
- What’s the organic traffic value of your entire site, according to Ahrefs’ traffic value calculations?
- How much money did you spend on SEO resources (full-time employees, contractors, agencies, etc.)?
Looking at these three will give you three different calculations of your actual SEO ROI. If you’re seeing a positive ROI according to all three calculations, SEO is a great investment for your business. If you’re not seeing a positive ROI according to any of these calculations, SEO likely isn’t generating a positive return for your business.
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 6.42% click-through rate on average. Pages that rank first on Google organically have a 25.84% click-through rate for non-branded terms (and a 38.35% CTR for branded terms) 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
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.
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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