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SEO is one of the marketing channels. We can talk about the effectiveness of promotion only if the channel pays off, i.e. investments made in it are returned with profit.
Return on investment, ROI (ROMI, when talking about the return on investment of a marketing channel), is closely related to such a concept as KPI (Key Performance Indicators) - a key performance indicator.
It would seem that if these two concepts are so closely related, then ROI (ROMI) should be set as a KPI. Unfortunately, this cannot be done.
To do this, consider the formula for return on marketing investment.
The formula shows that return on marketing investment (ROMI) depends on the average business revenue from the channel, the number of sales the channel makes per month, and the budget allocated to it.
Obviously, an SEO company cannot influence the average business income from a channel.
Optimizers have long noticed the dependence of ROI on a number of intermediate indicators and suggested that businesses use them to evaluate the quality of their work.
Conventionally, they can be divided into two groups: economic and non-economic.
The difference is that economic indicators can be directly linked to ROMI, while non-economic indicators can only be indirectly linked.
Non-economic:
Economic:
In this article we will look at all types of KPIs. Let us dwell in detail on those that are relevant at the moment.
To choose a KPI, you need to remember the stages of the search marketing funnel and then choose the metric that will have the greatest impact on your business.
Stages of the funnel: a certain number of page impressions in the search will be clicked by a certain number of target visitors, of which a certain percentage of people will want to purchase a product (service) and will leave contact information for this purpose, some of them will pay for the purchase.
This indicator allows you to estimate what percentage of potential clients sees the site in the search results for the promoted semantic core.
Allows you to decide how much visibility can be increased for the current semantic core and assess the need to expand it.
Obviously, the more the target audience sees the site, the more transitions will be made to it.
Before the advent of personalized search results, reaching the TOP 10 was the main indicator of the effectiveness of an SEO company.
Nevertheless, in specialized services we can see with what frequency and for what key queries the site appears in the TOP-10.
Website traffic depends on how many keywords and with what frequency appear in the TOP-10: the higher the position, the more transitions to the resource.
Commercial resources continue to be used as the main KPI.
In other words, you can call the number of targeted transitions to the site.
One of the main goals of marketing is to increase targeted traffic and minimize non-targeted visitors.
The more target buyers come to the site, the higher the likelihood that some of them will complete a conversion action.
The fewer non-target visitors, the lower the bounce rate.
These behavioral factors influence the site's ranking in search results. The more often a site gets into the TOP 10 for a key query, the more targeted visitors it receives.
Target traffic is chosen as a KPI for both informational and commercial sites.
It is important for marketers involved in promoting information sites to know in advance that the site will definitely receive a certain amount of traffic. Since the cost of advertising directly depends on the volume of targeted traffic.
Marketers of commercial websites in some cases believe that it is more profitable to cooperate with an SEO company if the KPI specifies the volume of targeted traffic rather than the number of leads.
It is calculated as the ratio of the budget to the total number of site visitors.
A website visitor is the initial link in the sales funnel. Next, a certain number of site visitors will move to the next stage of the funnel, complete a conversion action and become leads.
Leads are users who left contact information in order to make a purchase. The following are counted as conversion actions:
Obtaining a lead for a certain cost allows you to predict the return on marketing investment. This is why most marketers choose leads as their performance metric.
How are leads counted?
Calculation formula:
Knowing the CPL and business margins, we can evaluate the effectiveness of SEO promotion in financial terms.
If CPL is multiplied by the conversion rate (CR), we find out the cost of attracting the end client.
If the cost of attracting a customer who paid for the order does not exceed the budget for attracting him, then we can talk about the success of the marketing channel.
The cost of attracting one client is not equal to the cost of a confirmed lead. Not all incoming applications turn into customers.
Knowing how SEO marketing goals are achieved helps the client's company representatives and SEO specialists speak the same language. Marketers and small business owners understand that each stage of the sales funnel can be influenced, and they are all equally important to profitability and return on marketing investment.
As a KPI, you need to choose an indicator whose impact on the return on marketing investment is clear to you.
You can write to the SEO studio "SEO COMPUTER" with any question at email info@seo.computer
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