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The ROI That I Can Expect From SEO?

May 21 2014, 1:53pm CDT | by , in News | Advertising News

The ROI That I Can Expect From SEO?
 
 

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The ROI That I Can Expect From SEO?

A question I get asked by clients all the time is “How do I measure the ROI on my SEO campaign?” Most business owners and marketers are happy to invest heavily in SEO when the outcomes can be reliably predicted and measured. The problem is, as you may have already figured out, SEO doesn’t quite work this way.

In late 2012, SEO and Internet marketing consultant Sam McRoberts wrote an excellent article titled Investing in SEO the Warren Buffett Way. I encourage you to check it out, but here’s the gist of it: SEO works very much like the stock market. You choose your stocks (keywords) based on the knowledge you have at hand, and then you wait. You’ll likely experience periods of growth and decline (like ranking fluctuations), but one thing is certain: the stock market and SEO are both long-term endeavors. There’s no quick path to riches in either case.

However, over the long term, you can expect to see growth if you’re patient enough to stay the course through the ups and downs of the market (or rankings and algorithm fluctuations). Buffett said, “Over the long term, the stock market news will be good.” Despite world wars, epidemics and the Great Depression, the long-term growth of stocks in the US grew steadily and significantly over the 20th century.

Image courtesy of Visualizing Economics

This is an uncomfortable prospect for most business owners when it comes to SEO, quite understandably. We’re used to analyzing our strategies and investments in terms of how they’ll pay off in weeks, months, or at most, a year.

The practice of SEO, however, like the stock market, necessitates a forward-thinking mentality; it means not jumping ship when rankings fluctuate, as they’re sure to do from time to time. It means being prepared for dips and even valleys, but committing to holding the course over the long term, regardless, as long as you’re doing the right things.

Sam writes: “If you pick a bad set of stocks, you might lose money. If you sell the stocks too late, you might lose money. If you sell too early, you might lose money or even leave money on the table. You have to pick good stocks and hold them for just the right amount of time, just as you have to pick the right keywords and target them for the right amount of time.”

Notice we’re not comparing SEO to the lottery or slot machines. SEO, like the stock market, necessitates a solid understanding of the market and the industry. A successful SEO strategy will mean investigating and researching appropriate keywords based on potential traffic levels, competitiveness, and the potential for conversions.

And we know that a successful SEO campaign has great value; value which is, in fact, completely unparalleled. We know, for instance, that achieving the #1 spot for a given keyword means getting about 33% of the clicks. This means that if there are 5,000 searches for a keyword each month, you could reasonably expect to receive around 1650 visits to your site if you hold the top position. This is an outcome worth investing in and waiting for.

A Strategy for a Successful Long-Term Investment

Savvy investors develop their own strategy (algorithm) for choosing their stocks. This process likely involves researching and evaluating, among other factors, a company’s:

  • Financial statements
  • Competitive advantages
  • Reputation
  • Investor news
  • Strength of brand recognition
  • Expert opinions and advice
  • Past performance

They will then likely weigh these factors against the amount of risk they’re comfortable with before making a final decision. They’re essentially making a ‘best guess’ based on all the bits of information and knowledge they’ve accumulated.

SEO works in a similar way. Using the tools, strategies and knowledge available to you, you gather information about the best keywords to target. Factors you’ll consider include:

  • Potential traffic levels
  • Competition for keywords
  • Past performance of keywords
  • Searcher intent (i.e. Are they just looking, or are they ready to buy?)
  • Industry trends and predictions
  • Expert opinions and advice

Conclusion

When my clients ask me how they can predictably determine the ROI of their SEO efforts, I wish I could give them a cut and dry answer. The truth is, however, that there is no standard x + y = z when it comes to SEO.

SEO, like picking stocks, means making decisions based on what we know now, what we’ve seen in the past, and what we expect to happen in the future. It means staying the course, through the dips and valleys, and holding out for the long-term rewards we know are coming. Of course, these long-term rewards will only come if your SEO strategy is executed well, by a true professional, who understands the industry and how to build a solid SEO campaign.

I’ll leave you with this thought from Sam’s article, which I think summarizes the ROI of SEO efforts perfectly:

You simply can’t approach SEO with a short-term investment mentality. If you’re looking for a quick hold-and-flip, that isn’t SEO. If you want to know with some measure of statistical certainty what your ROI will be over the next quarter or year, that isn’t SEO. If on the other hand you’re willing to invest for the long-term, if you have a long-term vision and you’re willing to do whatever it takes to reach your end goal…that’s SEO.

For guidance on current SEO trends and strategies, see my recent articles, The Definitive Guide to SEO in 2014 and The Top 7 SEO Trends Dominating 2014.

Image courtesy of Celestine Chua under CC 2.0

 

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