Step 1: Get your SEO data in place

First, it’s important to identify and use trustworthy, relevant data. For this analysis in particular you want to understand:

• Who are your main competitors and what is their SEO performance situation?
• In what market do you want to grow?
• What is your current SEO performance situation?
• What is your current business performance situation?

Achieving a comprehensive understanding of your website’s SEO performance requires a dual approach that involves both first- and third-party data.

1.1. Extracting first-party data from Google tools

First-party data, derived directly from your website analytics, offers a closer look at user behaviour and engagement.
Extracting information from Google Search Console unveils critical data about search queries, impressions, and click-through rates.
Google Analytics provides granular details about user interactions, side traffic, and conversion metrics.

This combination of first-party insights allows for a more targeted evaluation aligned with your unique circumstances.

1.2. Selecting third-party data tools

Third-party data, obtained from external tools like Ahrefs, Semrush, or MOZ, provides a broader industry perspective.
These tools offer in-depth analyses of keyword rankings, backlink profiles, and competitor strategies.
By leveraging these tools, you gain valuable insights into the broader landscape, enabling a more nuanced evaluation of your SEO performance across different dimensions.

The synergy between these first- and third-party data is essential for a more accurate estimation of the SEO efforts’ value. Acknowledging the inherent risk of data discrepancies across various tools is vital. To mitigate this risk and ensure a more robust and reliable assessment, it’s prudent to:

• Approach the outputs’ interpretation with a conservative mindset.
• Exercise caution in drawing conclusions and making decisions based on the data
• Recognising the potential variations and uncertainties that may arise.

Step 2: Calculate the organic ranking efficiency

For SEO professionals, organic ranking is significantly important. Why?

• When a user initiates a search, search engines curate a list of relevant results
• The goal for any website is to secure a prominent position on this list.

The rationale behind this pursuit is straightforward: higher rankings generally translate to increased web traffic. Therefore, understanding and optimising for ranking efficiency becomes paramount.

Ranking efficiency involves a comprehensive assessment of how well your website ranks across all relevant keywords.

• This analysis delves into the current positioning of your website and evaluates the potential traffic gains associated with higher rankings.
• It’s a strategic examination of not just where you stand currently but also the opportunities for growth by improving your position in search results.

To accomplish this, you can use a combination of the first- and third-party tools mentioned above. Optimising for organic ranking is not just about securing a top position in search results; it’s about strategically capitalising on the traffic opportunities that come from achieving a higher ranking.

Step 3: Keyword gap analysis

To gain a comprehensive understanding of your online presence and identify growth opportunities, we recommend conducting a keyword gap analysis.

A keyword gap analysis is a strategic assessment of the search landscape, specifically focusing on the differences between your website and that of your primary competitors.

• The objective of a keyword gap analysis is to find out which keywords your competitors are successfully ranking for, but you may not be capitalising on.

So, how do you conduct a keyword gap analysis? Two steps:

1. Identify your main competitors in your industry or niche. These are the players you consider as key contenders in the online space.
2. Extract your competitors’ keywords they position themselves on. This involves compiling a comprehensive list of the terms and phrases that contribute to the visibility in search engine results.

This information from a keyword gap analysis can:

• Guide your content creation and optimisation efforts
• Help you strategically position your website to capture a larger share of relevant searches.
• Allow you to capitalise on untapped opportunities, and
• Strengthen your online visibility in a highly competitive digital environment.

Psst! If you need more help understanding keyword research and keyword analysis, read this.

Step 4: Segment relevant keywords and isolate traffic numbers

After conducting a keyword gap analysis, the next step is to segment and analyse the relevant keywords that could potentially boost your website’s visibility and traffic. This process involves understanding the collective impact of keywords for which you are currently not ranking.

The objective of this step is twofold:

• Determining the total number of keywords your website is not currently ranking for
• Quantifying the potential (monthly) traffic associated with these keywords.

To ensure accuracy and avoid redundancies in your dataset, we recommend you approach this analysis with a strategic downsizing approach by reducing the total sums by up to 75% to account for any overlap or duplications in the data.

Example: if the analysis reveals that there are 1,500 keywords for which your website is not ranking, and these keywords collectively drive 35,000 clicks per month, applying the 75% downsizing principle would suggest an estimated growth potential of monthly clicks to your website. In this scenario, the calculation would be (35,000*0.25), resulting in an estimated 8,750 additional clicks per month.

Understanding your estimated growth potential is important because:

• It allows you to make informed decisions about resource allocation and content prioritisation & optimisation strategy.
• It provides a tangible metric for the potential impact of targeting and ranking for specific keywords that are currently outside of your reach.

By isolating relevant keywords and quantifying their potential traffic, you gain valuable insights into the areas where your SEO efforts can yield the most significant returns. This data-driven approach enables you to prioritise your content optimisation strategy, focusing on keywords that align with your business goals and have the highest potential for driving meaningful impact of your online presence.

Step 5: Calculate the ROI

As we move into the final phase of assessing your SEO strategy, calculating the Return on Investment (ROI) brings clarity to the overall impact of your efforts.

Let’s break down this process into 3 key sub-steps:

• Calculating the SEO value,
• Calculating the SEO cost, and
• Putting it all together to calculate the SEO ROI.

5.1. Calculate the SEO value

Now that you’ve identified potential growth through keyword optimisation, it’s time to quantify the impact. This first sub-step involves estimating the SEO value.

This figure reflects the potential returns from your SEO endeavours by considering the estimated traffic, your average organic conversion rate, and the average order value.

Estimated SEO value = Estimated traffic × Avg organic conversion rate × Avg organic order value

This calculation provides a tangible representation of the value generated through increased organic traffic, conversions, and the overall value of orders.

5.2. Calculate the SEO Cost

Determining the cost of your SEO strategy involves examining the various expenses associated with optimising your online presence. This includes costs related to web development, content creation, digital PR efforts, and, in certain cases, the cost of goods sold (COGS) for e-commerce.

Here’s a brief list that we use in our work with clients to understand the actual cost of SEO:

• Cost of resources (developers, content creators, etc.)
• Cost of service (such as COGS for e-commerce)
• Software fees

By aggregating these expenses, you gain a clear understanding of the financial investment required to execute your SEO initiatives.

Once you have the cost in place of all expenses that would go into SEO, you can then calculate the SEO ROI.

5.3.Calculate the SEO ROI

With both the SEO value and cost in consideration, the final sub-step is calculating the Return on Investment (ROI). This involves subtracting the estimated SEO cost from the estimated SEO value:

Estimated SEO value − Estimated SEO cost = SEO ROI

This straightforward calculation provides a numerical measure of the effectiveness of your SEO strategy.

• A positive ROI indicates that your SEO efforts are yielding value beyond the associated costs
• A negative ROI prompts a reassessment of your strategy.

In a nutshell

Understanding and measuring the ROI of your SEO efforts doesn’t have to be a daunting task. By following our 5-step method, you can gain valuable insights to prioritise projects that drive positive SEO ROI.

1. Start by ensuring your data is trustworthy and relevant, utilising both first- and third-party tools,
2. Calculate ranking efficiency to gauge your current position in search results and estimate potential traffic,
3. Conduct a keyword gap analysis to understand your search share compared to competitors,
4. Segment relevant keywords and isolate traffic numbers to estimate growth potential conservatively,
5. Finally, calculate the SEO value by multiplying potential traffic with your conversion rate and order value, and compare it against the cost of your SEO efforts.

Understanding the value from your SEO efforts is pivotal for making informed decisions, guiding future SEO investments, and demonstrating the tangible impact of your efforts on the overall success of your online presence. This holistic approach ensures that your SEO strategy not only enhances visibility but also contributes positively to your bottom line.