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Friday, Feb. 9, 2007 at 8:03 am

Calculating the ROI of SEO?

By Howard Kaplan
February 9th, 2007

It was early December when I walked into the lobby of the Chicago Hilton, well past 1 AM, and first heard the buzz. The bar was packed, literally overflowing with loud, raving, belligerent… Search Engine Optimizers. I know the search community is close, and with SES being their Super Bowl, I wasn’t overly surprised. The crisis du jour, Jason Calacanis had called their profession bull@%$#. Imagine the horror.

Ok, ok, all melodrama aside, they were fired up (and rightfully so, I mean, it was a conference for search… engine… strategies… kinda had to wonder who the audience might contain). Since that time, a flame war has ensued that rival Friday nights at an MIT computer lab. This week, things spilled over again with some more choice words from Jason, and the godfather of search Danny Sullivan trying to shred his argument. If this kinda thing gets you excited, go read both posts, make up your own mind and save yourself the trouble of reading the next 1200 posts beating the horse well into submission.

Done? Great, now I have a different question for you: How do you calculate the ROI of your SEO efforts? That’s not a rhetorical question, I really want to know.

I know how Barry Diller calculates it, and for his purposes, SEO is a slam dunk. What about for the retailer with a 10% Conversion Rate? How about the retailer with a 1% CR? What about the B2B enterprise software company–the one whose “sale” is overly complex, requires a large degree of consensus–how do they value acquiring more traffic? Please do share, and we’ll weigh in too (at least on the aspects of return on investment and profitability).

As for the macguffin that is the latest “heavyweight” fight; well, I’m staying out of it (for once ;)

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Comments (5)

  1. Hey Howard,

    A good question, and one that we have tried to address with this tool:
    http://www.thinkseer.com/tools/seo-search-engine-marketing-roi-calculator.php

    It hasn’t caught on as much as we’d like, any tips on making it better / more friendly / understandable for users? There aren’t too many SEO ROI calculators out there and I hope this tool could help, but I think it need a little more polish to be a useful tool for people.

    Any ideas?

    Thanks,
    Wil

  2. In my opinion goal of any SEO campaign should not be limited to only a good positioning of the SERP´s. We need conversion. The work involves on page optimization, positioning, usability, design, and a number of other criteria which aims at the conversion.
    Perhaps the ROI should be measured not only in values but in results.

    Great article!

  3. Wow… this is an old post. Is there nobody would like to share the method to calculate the ROI?
    Sorry, I don’t contribute to the post either, I’m doing a small research and wished I find something.
    Generally I agree with the second comment above.

  4. a site is a business therefore it needs a ROI. even a buck spent is spent and must come from somewhere. even if the ROI concept was popularized by adwords, it does make sense to calculate ROI in seo.

  5. I appreciate your insights and the good information you have shared here. All points are significantly important for me and your article have helped me a great deal.
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