The way clients view SEO has evolved and grown-up a lot over recent years. SEO measurement now needs to ensure that the key performance indicators (KPIs) from campaigns are based around return on investment (ROI) and revenue. While previous SEO metrics such as rankings and traffic are still a good indicator of SEO success, they aren’t a clear measurement of performance at a business level.
Typical Business Goals vs. SEO Goals
|Business Metrics||SEO Metrics|
|Revenue||Organic Search Traffic|
|Net Profit||Year-on-Year Search Traffic|
|Volume of Sales||Non-Branded Search|
|Average Order Value||Target Keyword Rankings|
The table above highlights what I’ve found to be a common issue with reviewing SEO performance; the metrics aren’t in-line! If key decision makers are looking at business metrics to manage their search marketing budget - we need to understand the value of SEO based on the same goals.
SEO metrics are great indicators to show if a campaign is on track, but it’s not what a marketing director or CMO really needs to analyze performance or justify budgets and their decision to hire you!
Decision Makers Understand the ROI of Paid Search
The paid search model has been understood by decision makers for years. Despite the percentage of organic clicks being much higher than paid, the ROI of PPC is much easier to measure – making it less of a risk and easier to justify and scale budgets.
Having an agency background, I’ve found that client-side SEO is now commonly run by either a search-savvy marketing manager, or in many cases a dedicated search team. Of course, each of these clients will need to justify costs and pitch for SEO campaign budgets from their own board. This means you have to show that if your client increased spend by an extra $10,000 per month on SEO – what can they expect to see in return?
Using the PPC model it’s easy to predict, you can review past performance –average cost-per-click (CPC), cost per conversion and overall ROI. But if you analyze what you spend on SEO costs in a similar way, there’s no reason why you can’t find your SEO CPC, CPA and ROI calculations. It’s just harder to predict the uplift in organic traffic generated via SEO activity and to put a long-term value on this - whereas in PPC, when the budget dries up, so does your traffic.
If you assess budgets in a consistent way to the PPC model, you may find that it costs you $1.00 per click on PPC and your equivalent SEO CPC is $0.50. So then you know you should invest more in SEO!
Alternatively, if SEO is more expensive than PPC – put your budget where it works better for you in paid search instead. But at least it’s a balanced analysis.
One of the major problems with SEO budgets is that no one knows how much they should be spending, whereas in PPC we track ROI so closely that we can scale campaigns to the point that you’re squeezing as much profit/revenue out of a campaign as possible. With SEO we’re not quite there yet.
7 Step Process to Measuring SEO Like PPC
In order to ensure that you're measuring SEO as closely as possible – I would recommend clearly defining your clients business goals. And then looking to measure these using a similar method to the paid search model, as follows:
1. Analyze Organic Traffic Valuation as a Potential PPC Media Spend Cost
This is based on multiplying actual organic search traffic with paid search cost-per-click values (ideally at keyword level) in order to calculate the media spend value of traffic if it were to be paid for (at CPC prices).
2. Calculate the Revenue Value of SEO
This then takes things a step further for e-commerce sites, by applying conversion rate and average order value figures to calculate the value of that traffic in terms of predicted revenue generated.
3. Competitor Gap Analysis
Figure out where you stack up against your competitors. Perform keyword research analysis for a set of key terms, using tools such as Hitwise, SearchMetrics or SEM Rush to find out which keywords competitors are getting traffic from.
4. Potential Market Share
Start to analyze the market more closely. Using tools such as Linkdex you can compare current rankings, predicted traffic levels (calculated with average CTRs) and the total value of clicks (at PPC media spend prices).
From this, you can accurately estimate how much traffic your competitors are getting, the media spend value, and predicted revenue. That gives you a clear picture of the market and the share that you own versus your competitors – giving you a great way to highlight the potential revenue you can generate from search.
5. Make it Actionable
Using tools such as the Webmaster Tools report in Google Analytics, you can now view organic search in a similar way to PPC. This will show you not only the volume of clicks generated, but also impressions, average position and CTRs too.
You can get a clear idea about the potential traffic that is available and how you can make actionable improvements towards hitting targets. Plus it’s one of the best ways around the “(not provided)” SSL search issue that we have available at the moment.
6. Categorise SEO Keywords Into Ad Group Buckets
Break keywords down into categories to make this more manageable (in a similar way to how adgroups work in AdWords). This means that you now know what your targets are, which key areas you need to improve, and where the most potential value of traffic is available.
This leads into creating a project plan to help you achieve these goals, analyzing the top ranking sites for these terms and asking do they have:
- Better/more content
- Stronger/higher volume of links
- Better on-site SEO
Once you have this information, you can put together a prioritized action plan to measure performance and help you close that gap between competitors.
7. The SEO Forecast
Once you’ve analyzed the market in full and have an action plan to take your SEO strategy to the next level, you can then look to forecast potential improvements. One way to do this is by providing these three levels of predictions to try to set expectations on the targeted success of a campaign:
This should be based on your assessments of the SEO improvements available and market potential to increase results.
The End Result
When you look at things this way, it’s easier to justify budgets and there’s more scope for scaling spend if your SEO campaign is working well. Likewise, by making performance more transparent in this way, it also highlights poor performance quickly too – so it will put the pressure on – so just make sure you get great results!
The Original Search Marketing Event is Back!
SES Denver (Oct 16) offers an intense day of learning all the critical aspects of search engine optimization (SEO) and paid search advertising (PPC). The mission of SES remains the same as it did from the start - to help you master being found on search engines. Register today!