How to Measure the Profitability of Your SEO Campaign

How to Measure the Profitability of Your SEO Campaign
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One of the great things about online marketing is its accountability: We can measure a marketing campaigns performance to a high degree but for most business owners, the data provided by services such as Google Analytics can be incredibly difficult to decipher.


The Bottom Line


I think it’s fair to say most business owners simply want to understand the profitability of a given campaign first and foremost, be that from a paid or an organic search campaign, the end result should be profitability of course.


The problem is, especially early on in a campaign (particularly where SEO is concerned) returns are likely to be minimal whilst momentum is built. SEO is a long term marketing strategy which potentially gives fantastic ROI in the long term, but in the short term, ROI is more often than not, very low to non existent.


So whilst online marketing channels such as organic search are highly measurable, this has to be balanced with realistic expectations and sufficient time to actually make an informed judgement of whether or not the campaign has “legs”.


Sales are down, it’s not working!


One thing business owners should consider, is that whilst ‘overall’ sales could well be ‘down’ you need to accurately drill down into which channels precisely are down and which are not.


In this simple example, imagine the clients overall sales are down by 5%. Often, clients would make the assumption sales from their latest marketing campaign (e.g. SEO) are to blame:


  • Offline Sales down 35%
  • Organic Sales (SEO) up 20%
  • Paid Search Sales (PPC) up 10%


By drilling down, we can actually see sales from SEO and PPC are up and it’s the offline sales channel which is driving down the overall sales figures.


We can see this information very easily in Google Analytics by heading to the Acquisition Overview menu. (Or using the various segmentation options within Google Analytics)


If the client called time on his SEO or PPC campaign at this point it would be a huge shame given the upwards trend of sales originating from these channels.


ALWAYS, deep dive into your data to get a thorough understanding of which channels drive sales.


Comparing Time Frames


Seasonality is a huge factor when it comes to online sales. Everything from major events to the weather can have a noticeable affect on Internet sales, so often, comparing sales data month to month can be misleading.


Always try and look at sales performance in an ‘Apples to Apples’ scenario. First, check month to month but also look at the same month a year ago and observe the differences. If you still can’t see a trend, open out your reporting period and cover 3 months or even 6 months. The last thing you want to do is react from an anomaly.


You’ll always have good and bad months, but they don’t always represent a change in general trend so make sure you take a step back and compare data over longer periods to fully understand your sales situation.


In the following example, this particular client is running an SEO campaign and is relatively early on, about 6 months in. You could be forgiven for looking at this data and thinking that returns are non existent…




But, if we compare the same data year to year (to avoid seasonality etc) rather than month to month we can see that conversions are significantly up year on year.




Again, if the client reacted to the first graph and changed their approach to SEO (or stopped it completely) then they’d be making a huge mistake.


The problem is, this happens often. I’ve had plenty of new clients come to us complaining their previous agency didn’t deliver results when in actual fact the agency was guilty of not reporting results clearly.



Forecasting returns from SEO based on past performance



I’ll wind up this blog by showing an example. Now forecasting is incredibly difficult and many factors can come into play such as search volume for example. But, in this example you can get an idea of the sales growth from SEO for this particular client:





The first 6 months, given it’s a relatively new website, it’s hard to really see any significant progress. It appears as though sales have “plateaued” but in the absence of the previous years data it’s not clear if this is a seasonal slow down or not (Although we can get an idea from Google Trends but for the sake of simplicity we won’t at this point).


The point is, some clients at the 6 month mark might start questioning the effectiveness of the campaign but the point is, 6 months just isn’t ‘long term’.


Fast forward for the next 6 months and progress is much clearer  – thanks to increased visibility and additional search volume up to Christmas.


Following Christmas and Jan you can clearly see a drop, this is entirely due to search volume decreased (and can be confirmed with Google Trends data).  However, this January is significantly better than the preceding January so by following the general trend it’s possible to forecast performance going forward (assuming all things remain equal).


Whilst, it’s highly unlikely the next 12 months will follow the exact same trend it should be broadly similar but it does paint an indicative picture of long term SEO progress.