Online marketing should be relatively easy for any business to justify investment in, but this often isn’t the case. The reality is that whilst many organisations now understand the value of the internet and are investing in it there is still usually a fight on for investment in SEO in particular.
This is usually down to one or more of the following reasons:
- The budget owners don’t understand SEO “organic search is free right”.
- Nobody in the business has been able to clearly articulate a monetary benefit to investing in SEO.
- The company believe SEO improvements should just come naturally through good site creation.
- The company are seeing great returns from investment in PPC, so are unwilling to reduce budget in this activity to support SEO enhancements which aren’t proven to work and additional budget isn’t available specifically for SEO.
In truth whether it be PPC or SEO, investment should be very easy to justify internally if you go about it in the right way. Some budget owners or senior brass might want to understand the technical mumbo jumbo, but most just care about how much money their investment will pay back.
So keep that in mind when arguing your case internally, you need to clearly articulate that if they give you £x you will give them £y. Make yourself accountable to this number, and you’ll probably find SEO investment a lot easier to gather.
How do you go about getting a number then?
First stop should be your web analytics to find out which keywords are driving your business at this moment in time. It doesn’t matter if they are based on organic referrals or paid.
Initially identify say 20 target keywords either through your analytics or through the Google keyword tool.
Then use the Google keyword tool to assess the volume of traffic available on these terms. Use the global number for the total, or local to get specific levels for your country. It’s also worth changing your match type to exact.
This data isn’t perfect, but it gives you a rough idea of search traffic by target keyword.
Ok so now you have a list of target keywords and a rough idea of the volume of potential traffic available on each of these terms.
What Next? Input Conversion Rate & Average Order Value
You could go a number of routes here depending on the data you have available to you.
If you have web analytics data against some or all of these keywords either from organic or paid referrals then find out your average conversion rate and order value for each of these terms and add that data to your spreadsheet.
If you don’t have that information or you aren’t sure how to get at it then you could make a rough estimate of the conversion rate, make it low (1% range).
Then find out your organisations online average order value. If this isn’t related specifically to search engine referrals you may want to reduce this by a percentage as referrals from search engines are more likely to be new customers, and as a result their average spends may be lower than your regular customers purchasing through other channels.
So now you have a spreadsheet with keywords, search volume, conversion rates, and average order value.
What Next? Input Current Organic Rankings by Keyword
The next step is to collect your current organic rank for each of these target keywords. Add this to your spreadsheet.
What Next? Download Conductor SEO Opportunity Sheet
Similar to the last section there is a number of options you take here, but I am going to recommend for a more accurate final monetary value you go ahead and download a spreadsheet from Conductor.
You will need to fill in a quick form, and then they will email you the relevant spreadsheets. Don’t worry you’re not going to get any spam or cold calling and the effort is worth the prize. I was going to put my own version together, but this is better than my version would have been!
You need to open the file called SEO Marketing Opportunity Calculator. Instructions are included on tab 1, but here is a step by step guide based on the information you collected for the above:
- Go to tab “main”
- Input your top 20 keywords in column B
- Input your current Google rank on these terms organically in column C
- Input your Global or Local search volume per keyword in column
- Now modify your target rank for each keyword in column M
- Introduce your conversion rate by keyword into column R
- Introduce your average order value by keyword into column S
- Hey presto, the spreadsheet works out the rough monetary benefit to the business of increasing your rank for each of the target keywords.
Now you can go back to your budget owners and give them an idea of how much incremental they can expect from increased rank by keyword, by month. Of course you can’t assume that every keyword in your top 20 will rank first, so be realistic and deliver your numbers based on an assumption of the available budget.
How Do I Estimate my SEO Budget Requirements?
If you want to go a step further then you should look to estimate how much budget your likely to need to rank on particular keywords. This process will help you work out a return on investment number, and improve your chances of obtaining the budget required, or help you set realistic expectations based on the budget you’re receiving.
So the next step is to get a rough idea of the cost involved for improving rank by keyword. To do this you need to understand the competition by keyword.
If your target is to rank 1st on the keyword “seo services leeds” for example then you need to understand why the sites in position 1 and 2 are ranking there before you can get a gauge on how much its going to cost you to outrank them. On certain occassions it might be very easy, a simple change to the page title, but if you are targeting quite competitive keywords your going to need to build external links and relevant anchor text.
For this process I recommend purchasing some analysis tools, in particular a subscription with SEOMoz would benefit you in this area.
Lets say I want to rank 1st on the keyword “canvas prints” for example. Here is the process I would initially run through:
On Site Relevancy Report
Run a quick report to grade the on site ranking factors of the top 2 or 3 businesses ranking for “canvas prints” using the term target tool.
Canvas Dezign (Scores a B for relevancy)
YourImage2Canvas (Scores an A- for relevancy)
I now know that both of those sites are relatively well optimised on site for this term, but as YourImage2Canvas is better optimised yet below Canvas Dezign it demonstrates that it’s a competitive term and that offsite ranking factors are playing more into deciding on rank. This is pretty typical these days, because most on site ranking factors with the exception of title tags and alt tags don’t really correlate to improved rankings.
Despite this I would still want to consider the level of investment that would be needed to modify my title tags, Header tags, image alt tags, and general body content. Might just be a quick 10 minute job, or it might take some considerable development effort depending on your site systems.
Offsite Relevancy Report
The next report I would like at would be to understand the volume of external links pointing into the top two ranked sites, and the anchor text used for the links. This is going to tell me how many links im going to need to get close or pass these two sites in the rankings.
Canvas Dezign
YourImage2Canvas
From this data I can see both of these sites are clearly focusing upon “canvas prints” as a target keyword given their anchor text is very strong on this term. Now feasibly if I was to achieve less external links, but from high quality and more relevant sources I could outrank these sites, buts lets assume I have similar sites linking in, it would suggest that I would need to generate at least 150 external links using “canvas prints” as the anchor text to get near to YourImage2Canvas, and probably double that amount to outrank Canvas Dezign.
In fairness it’s not quite as clear cut as that, but it’s a good start for making cost estimations by keyword.
How Do I Attribute a Cost to Link Building?
This is a really tough question to answer, but I will have a go. You need to consider your linking strategy first.
Are you simply going to buy links from other websites through a link broker like Buy-Text-Links? If so, then you can quite easily put a monthly monetary figure against this activity. Lets assume £15 per link, across 200 sites for example, the cost would be £3000 per month to your business to increase rank on “canvas prints”.
Now you have that data you circle back to your estimation model for the revenue return and work out if the investment is worthwhile. What is the return on investment?
A secondary option….
If you would prefer to do your link building naturally then you need to consider how you might go about driving that acquisition of links without paying for them. Your first step might be to contact relevant websites and request a link, or to add yourself to appropriate directories, but this isn’t usually that successful.
Perhaps you devise a strategy that is different from your competition to drive unique content and product offerings that will drive natural linking.
Let’s assume therefore you propose a number of site development projects and the hiring of an additional resource at a cost to the business of £3000 upfront followed by a monthly salary of £1500.
Again you need to circle back to your revenue estimation model and work out if after costs you still have good levels of ROI to show for it.
Again by no means is this list exhaustive, but hopefully it gives some insight into the process of understanding and budgeting for SEO activities. The Conductor spreadsheets are a great resource, so I fully recommend using them in your process.
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