Search engine optimization (SEO) is multi-faceted and complex.
Measuring the return on investment (ROI) of an SEO campaign is even more daunting, especially when direct results cannot always easily be tied to specific inputs.
It’s the old John Wanamaker conundrum:
Half the money I spend on advertising is wasted; the trouble is I don’t know which half.
Fortunately in today’s paid marketing, it’s much easier to target waste and bloat by knowing how your PPC ad spend is working (or not).
But not when it comes to organic search.
In SEO, correlation is often inappropriately tied to causation, which may not always be the case.
In this guide we discuss the specifics of measuring the ROI of your SEO campaigns, particularly your off-page SEO in building links and promoting content.
In doing so, we assume your site passes the table stakes metrics required for optimal on-page SEO including quality content, Core Web Vitals, internal linking, proper title/meta/h1, etc.
In the next several sections, we’re going to teach you how to measure both the costs and the value of your link building (and link outreach) campaign, and determine which of your links and offsite content are making the biggest impact. From there, you’ll be able to optimize your link building campaign for a higher return on investment, or ROI—and much more impressive long-term results.
Understand that the true value of your link building campaign is about more than just higher search engine rankings. It can’t be tied to any single variable. Instead, your link building outreach campaign must be considered in a variety of different performance areas:
Some of these impact variables will matter more to you than others. For example, your brand may be especially eager to outrank your top competitors in search engines. However, it’s hard to argue with objective outcomes; if it’s possible to generate more total traffic, as well as traffic more likely to convert, from referrals than organic traffic, it will benefit you to optimize your approach accordingly.
Let’s turn our attention to the main premise of this piece: link building ROI. The high-level view is that ROI is a function of two variables: costs and profits. If you spend $500 on a campaign and you generate $600 in revenue from it, that’s an ROI of $100, or 20 percent, depending on how you want to measure it.
In the realm of link building, costs can be tricky to measure, since you’ll need to factor in both time and money. If you’re working with a link building agency, things get a bit simpler, since you’re only dealing with one cost variable. In the next section, we’ll explain how to accurately project your costs.
And as you can see from the previous section, outcomes can also be difficult to measure; there are many benefits of link building, both direct and indirect, and you’ll need to factor all of them into your final ROI equation. In several sections that follow, we’ll explore how to measure the impact of your links, including how much traffic they’re generating, how they’re improving your search engine rankings, and how they’re influencing user behavior on your site.
For both costs and value, you’ll need to consider both your overall strategy and each individual link; for example, if your strategy is performing well, but a certain type of link seems to be underperforming compared to the others, you can weed out whatever strategy is producing that link in favor of something more in line with what’s generating your results. Some publishers will outperform others, and some pieces of onsite content will be more rewarding as link destinations than others.
We’ll start with the easier side of the equation—measuring your costs. There are going to be some complexities to deal with no matter what, but the big picture should be easy to glean.
If you’re working with a link building agency, and they’re doing the work more or less exclusively, the costs of SEO will be easy to calculate. If you’re paying for each link a la carte, you can simply use that as the basis for your calculations; you’ll know that you paid $500 for this link, or $100 for that one, and that you paid $2,500 for all the links in your backlink profile so far. End of story. If you’re paying a link building agency on retainer, you may need to dig deeper to figure out how much time, effort, or money was spent on the individual links built in your campaign.
There’s another benefit of working with a link building agency: they’ll probably help you calculate the ROI of your strategy. These experts are invested in your success, so they’re interested in knowing which links perform best—so they can replicate those strategies in the future.
If you’re doing the link building yourself, make sure you pay attention to these variables, measuring both “real” costs and time costs:
Track how much time you’re spending in each of these categories, and multiply that by the applicable hourly rate you’re paying or earning. Again, you’ll want to measure this for each link, and come up with a total for your entire campaign.
Now let’s turn our attention to the value your links are bringing your campaign. Remember, this is about more than just search engine rankings (though it’s about search engine rankings as well).
One of the best tools for the job is Google Analytics; not only is it incredibly robust and easy to learn, but it’s also free. If you haven’t set up Google Analytics for your site yet, you’ll need to do it. Head to the admin section and click “Create Property.” Follow the steps and you’ll receive a snippet of code you can install on the back end of your site. After that, you can start tracking information about your website’s performance.
So which metrics should you be tracking? Google Analytics has an intimidating number of capabilities, but once you begin to experiment, you should be able to learn them in short order.
Let’s start in the Acquisition tab. On the left side menu, click Acquisition, and you’ll land on an Overview page that will break down how your site is attracting new traffic. There are a few categories that are relevant to your link building strategy:
You’ll want to analyze these sources of traffic in a few different ways. First, pay attention to how these categories compare to each other. There’s a pie chart on the left (by default) that will tell you the percentage of visits from each segment. You can also click each category name to bring up a more detailed breakdown of where this traffic is coming from; for example, in the “referral” section, you’ll be able to see the number of users visiting from each of your referring domains. You’ll also be able to see which landing pages are optimized with user intent. In the “social” section, you’ll see how many visitors each social media platform was responsible for. The “organic” section is more opaque; most of your traffic will be from a keyword that’s “not provided.” If you want more details about your search engine rankings and organic traffic, you’ll need a different tool to do it.
Of course, traffic isn’t everything, as we’ve already established. You’ll also want to take a look at several additional metrics, which should be available in each individual Channel breakdown. You can also view this information from a high level in the Behavior tab on the left-hand side.
However you choose to access them, you’ll want to take a look at the following user behavior metrics:
Together, these metrics should give you good perspective on the performance of your link building campaign—how many people are visiting, how long they’re staying, and whether they’re converting. But we can also dig a bit deeper with the help of “advanced segments.”
Advanced segments are customized groups of people you can establish within Google Analytics, giving you more control over what you’re measuring—and the demographics you’re learning from. In this section, we’ll teach you how to create an audience segment, how to choose an advanced segment, and how to customize your advanced segment data.
Creating an audience segment is easy. Once you’re logged in, head to the Audience section and select the Overview menu. Here, you’ll see a general breakdown of your audience statistics, including the number of website users you’ve seen from a given period, where those users are from, and how many of those users are new or returning.
Click the Add Segment button. Here, you’ll be able to choose a specific segment of incoming users that adhere to the variables of your choice. You’ll have some options available by default, including bounced sessions, converters, direct traffic, “made a purchase,” mobile traffic, multi-session users, new users, non-bounce sessions, non-converters, traffic by a specific channel (i.e., organic, referral, etc.), and single-session users. There are shortcuts to these audience segments in other areas of Google Analytics, but they’re grouped here for your convenience.
You can also create a much more detailed audience segment by clicking “New Segment” in the upper-left corner.
After selecting “New Segment,” you’ll have the opportunity to customize your target audience in any way you choose. These are the primary categories you’ll need to consider:
Once you’ve established the exact parameters you want to analyze, you can click “preview” to view analytics for that specific segment. You can also click “Save” to permanently save this segment; that way, you can easily view and modify it in the future.
So what can advanced segments teach you about your link building ROI? If you have very specific goals in your campaign, like appealing to people interested in purchasing products like yours, this is your chance to laser-focus your strategy; you can study only the demographics most likely to bring value to your organization and tweak your strategy to cater to them.
You can also use advanced segments to help you answer hard questions about the nature of your campaign. For example, let’s say your ROI is lower than you expected, in part because the average user isn’t spending much time on your page per session. Audience segments would let you create a segment of only visitors from referral sources who spent a low amount of time on your pages; by digging into other metrics, you may be able to figure out what’s stopping them from spending more time.
But wait, there’s more. If you’re interested in tracking specific lines of traffic with greater precision, you could make use of an urchin tracking module (UTM) code. A UTM is a unique combination of characters attached to the end of an otherwise functional URL that allows you to track the people who visit that URL. To the end user, the URL will function like normal, but on the backend, you’ll have access to more advanced analytics about the people who visited this specific variation of the URL.
To do this, you’ll need access to Google Analytics’s Campaign URL Builder. It’s pretty easy, even if you don’t have much technical expertise. You’ll simply enter a few pieces of information:
You’ll also have the option to use the Campaign Term and Campaign Content fields to identify keywords associated with your campaign, or differentiate ads.
Once done, you can track all your UTM parameters in Google Analytics using the metrics we’ve listed and described in previous sections.
You can also build custom channel groupings, which are rule-based groupings of your traffic sources. By default, traffic will be grouped in a way that Google feels is most relevant to the greatest number of companies. But you may be interested in changing how these are displayed. Note that this feature is currently in Beta.
To create one, sign into Google Analytics and click Admin, then navigate to the view in which you want to create a custom channel grouping. Once open, under “personal tools and assets,” you can click Custom Channel Grouping, then New Channel Grouping. There, you can name your custom grouping and click “Define a new channel.”
Here, you’ll be able to name the new channel, and choose a display color for it so it’s easier to distinguish. You’ll then be able to create a series of rules for which traffic to allow in this view; you’ll be able to choose from a number of categories, such as “ad content,” “keyword,” and “destination URL,” establish logic parameters with Boolean operators, and include custom text to pull it all together. You can also drag and drop different rules to specify the order in which they should be applied.
When done, click Save. You can edit, copy, share, or delete your custom channel groupings at any time.
Note that this is an advanced feature, and will not be relevant to every link builder or SEO practitioner. These additional custom groupings exist only to make your life easier or give you more detailed data reports; most of the crucial insights are gleanable through the basic features of Google Analytics.
Inbound marketing actually tends to have a higher ROI than outbound advertising methods—even online approaches like native advertising. So why is this the case?
Native advertising relies on an innocuous appearance to disguise itself as advertising, but beneath that surface it’s a genuine, full-fledged ad. Savvy users who click on this type of material will feel tricked, as if they were lured into buying a product, and may not only avoid purchasing the product, but actively distrust the brand in the future. Of course, some people may appreciate the ad and buy the product anyway, but with organic inbound marketing, there’s virtually no risk of turning anybody away.
To the average modern web user, trust is one of the most important factors for making a final purchasing decision. If a user doesn’t trust a brand, he/she isn’t going to buy from it. For the most part, people are naturally distrustful of corporations and naturally distrustful of advertising—they realize that these are mechanisms of profit, driven to make money off of consumers. Organic inbound marketing strategies work against these stereotypes by presenting valuable information (or entertainment) to their users. Over time, this cultivates trust, and users will naturally be more likely to buy. Even consumers who don’t buy immediately will be more likely to speak highly of the brand to others, generating an atmosphere of trust and a higher reputation. Quality content, when consumed, can help in getting down the trust curve more quickly, something Stephen M. R. Covey says is critical for transacting in the modern world:
When it comes to online advertising, increased competition is making it harder to remain profitable. The most popular platforms for online advertising, like Google AdWords, are quickly ratcheting up in cost while offering more competition in the form of other advertisers. The less popular platforms, while cheaper, tend to offer fewer analytics tools, less traffic, and less benefit overall. The cost of native advertising slowly creeps up over time while offering similar returns (though the analytics tools and audience targeting abilities are admittedly getting more powerful). It could be argued that inbound marketing strategies like content marketing are seeing similarly increased rates of competition, but there are more avenues for differentiation available.
The best native advertising platforms are able to offer diverse and sophisticated means of audience targeting. For example, Facebook offers advertisers the ability to target individuals based on their age, gender, geographic location, and even their interests. However, there’s no guarantee that users within those demographics will be interested in your ad (or your product). If you display an ad to an uninterested user, that ad has completely gone to waste. On the other hand, content marketing gives you the opportunity to attract only people interested in a certain industry or a certain range of topics. Even if a reader finds your content interesting without formalizing a sale, there’s a chance that user will return and/or spread the message about your products.
Native advertising has one line to revenue; a user sees the ad, clicks the ad, and buys the product. Inbound marketing offers several possible channels for consumption. A user might know the brand name from their favorite blog, they might be a loyal reader, they might have seen one of your offers on social media, or they might have just found your site through a basic search. There’s a much wider funnel here, and as long as you have some means of conversion, you’re bound to get a decent return from multiple angles.
The greatest and clearest advantage organic inbound marketing has over native advertising is its ability to offer compounding returns. Your first few months of producing content, optimizing your site, and posting on social media may not return more than a few hundred visitors, but the more you invest in your strategy, the greater your returns will accelerate. You’ll accumulate more loyal readers, gradually grow your domain authority, attract more followers on social media, and before you know it, every new post you make will offer 10 times the value of one of your original posts. Native advertising always has a flat line of return, meaning over the course of several months, organic inbound marketing will always win out.
Even though content marketing does tend to have a higher ROI than native advertising, that doesn’t mean you should ignore native advertising altogether. It can still be profitable and beneficial for your brand (though it will aid some brands more than others). Be sure to consider the balance of your marketing strategies carefully, and always measure your own ROI—general trends don’t apply to every business, and you may find that what works for your business doesn’t exactly match the national average.
Throughout this guide, we’ve helped you calculate costs, measure your inbound traffic, and even set up custom tracking scripts to better understand your traffic. So how are you supposed to pull it all together for a comprehensive view of your past efforts?
For most brands, the best place to start is a high-level audit. How much do you spend on link building in a single month, or over the course of a year, and what kind of results are you seeing from those efforts?
For a given month, let’s say your total link building costs are X, added up from all the time you’ve spent and everything you’ve paid to your link building agency of choice. Via Google Analytics, you can calculate the number of conversions you’ve gotten as a direct or indirect result of your link building efforts; for example, conversions from organic traffic and certain types of referral traffic will apply here. If you know the average value of a conversion, you can multiply that by your number of conversions for a quick estimate of the total value produced by your link building strategy for a given month—let’s call that Y.
Is X greater than Y? Your campaign is currently producing a negative ROI. Is Y greater than X? Good. You’re headed in the right direction. Of course, the true results are a bit more nuanced than this; we’re skipping over a lot of secondary and tertiary metrics worth knowing. Also, link building is a long-term strategy; most brands see a negative ROI the first few months they develop their strategy, only to see that ROI grow exponentially in the months to come.
This is also only a starting point; it’s also a good idea to look at your ROI on a per-link or per-source basis. How much traffic and how many conversions are you getting for each link, and what did you pay for those links? Also keep in mind the impact each link has on your domain authority, which will influence your organic traffic and resulting conversions. Inevitably, you’ll find some links yielding a much higher ROI than others; what is it about these links that makes them more profitable? Is it the target demographics of the publisher? Is it the user behavior of the traffic once it gets to your site? Are you simply getting higher referral traffic with this publisher than you are with any other publisher?
ROI calculations shouldn’t be a one-time audit; you need to be monitoring your return on a regular basis, seeing how it changes with each tweak to your strategy.
If you’ve followed our guide this far, you’ve gained access to dozens of data points that can help you calculate the true cost and true value of your campaign. But what if you aren’t satisfied with those values? What if you’re eager to maximize your link building ROI?
There are a few strategies that can help you improve:
If you’re interested in improving your link building ROI, or if you’re just starting out with SEO (perhaps via our white label SEO service) and you want your link building strategy to be on point, one of the best steps you can take is working with a professional SEO service link building agency.
As a premier SEO company, we have relationships with some of the most valuable publishers in the world, writers to produce top-tier content, and account specialists to make sure we’re doing everything possible to benefit your business in the long run.
Contact us today to learn more about our link building services, managed SEO services or for a free analysis of your current link building strategy!