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Measuring SEO Success
It's not about every click, but every profitable click.
Posted Feb 18, 2010
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It's pretty much agreed these days that rankings are no longer the best measure of search engine optimization (SEo) success. They're a helpful metric, but should be the beginning of analytics, not the end of them.

The reality is that high rankings don't always translate to bringing in qualified and targeted traffic to a given website, since too often websites choose to optimize — and therefore rank — for the wrong keywords and keyword phrases, keywords that simply aren't being searched on in the first place, or keywords that don't convert. So the first step in designing your results-oriented SEO campaigns is doing the best possible keyword research, using all of the tools at your disposal. You want your keywords and keyword phrases to be popular to searchers so they can generate some scale, and at the same time focus on your high value products and services.

Why? Only when your webpages are optimized for the right keywords will you see positive ROI from natural search. Your results will be strong if you target keywords that attract website visitors specifically interested in buying your products or services — in other words, keywords that convert.

And that's what brings us to the crux of the matter, the question of SEO and ROI. What does constitute SEO success? It is obviously different for every company, but what most marketers agree on is this: the best indicator is conversions.

Not convinced? Let's go back and look at rankings for a moment. What kind of indicator are they? With personalized search now a reality, what you see on the first three pages of Google may be different from what I see on the first three pages of Google. If I live in New York and you live in San Francisco, they may be even more disparate, as Google may geotarget your IP address — that is, show different results based on your location. On top of that, the reality is that rankings fluctuate-not even from day to day or week to week, but in fact from moment to moment.

The best way to measure SEO ROI is through analytics, not rankings. All major analytics providers enable you to track conversions and monitor traffic rates, identify key traffic sources, differentiate between paid and natural traffic, and see drop-off rates, bounce rates, shopping cart abandonment, signups, transactions, and downloads. Google Analytics in particular allows you to test different landing pages to maximize your conversion rates.

A simple ROI formula would be (revenue from organic listings - cost of SEO campaign)/cost of SEO campaign. While the SEO cost is clear, understanding which conversions came from that SEO cost are not always, and as others in the search space have pointed out, there is a "leaky bucket" effect-not all sales derived from the organic listings will be properly attributed to the SEO campaign. That's not the worst thing that can happen: if anything, the leaky bucket effect will have you underestimating your SEO ROI, rather than overestimating it, so good results can in general be assumed to be, in fact, better than what you're seeing.

In truth, fewer and fewer conversions slip through the cracks of analytics as they are getting more sophisticated and the information they provide is robust, precise — and measurable. And today's analytics package doesn't need to cost thousands and thousands of dollars: Google Analytics is becoming more and more useful, as is the reliable Feedburner and the very helpful Xinu.

The cost model for SEO is different from PPC and other forms of advertising, so the advantage to SEO becomes clear when calculating return on investment. In general, marketers pay a flat fee for a SEO campaign. So for every dollar generated by SEO work (both during and more importantly-and more frequently-after) the campaign, the set-fee cost of the SEO campaign is divided by the total revenue produced. With every successive dollar generated by the campaign, there is no additional cost, so ROI improves. Not surprisingly, an iProspect study found that over three times as many search marketers got better ROI from SEO than from paid search.

The reality is that SEO is not the only customer-acquisition tool whose success is difficult to quantify in dollars and cents. How, for example, do you measure returns from your print media? A full-page newspaper ad may cost thousands of dollars, and once that day is over or that page is turned, it's no longer working for the marketer. SEO, on the other hand, continues to work: Optimization and link-building results don't disappear the day the SEO campaign ends.

As with every other area of marketing campaigns, the target results you set for the SEO program needs to include ROI-and other factors as well, including building brand awareness. You don't want to get every click — just every profitable click; and measuring those clicks is one component of a SEO strategy that works all the time. Having your success metrics in mind and using analytics to stay apprised of how you're doing against those metrics-along with other factors, such as rankings-is the real key to SEO success.

About the Author

Jonathan Lawoyin (jlawoyin@ewaydirect.com) is the search engine optimization manager of eWayDirect.com, an online marketing service provider.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors.
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