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Why It Matters, Formulas, Forecasting, & More

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Why It Matters, Formulas, Forecasting, & More

Search engine optimization (SEO) is key to ranking higher organically without spending money on paid ads to put you in front of your ideal customer avatar. Unfortunately, this often means that you need to invest in SEO services upfront with no guarantee of a return. This is why it’s so important to perform the critical calculations of ROI for SEO to make sure you get what you need. 

How can you calculate SEO ROI, and why does it matter? 

This guide will walk you through the process and teach you how to forecast it into the future to make sure you are maximizing your spend! 

What is ROI for SEO & Why Does It Matter?

Investing in your business is key to long-term success, but you should always know whether your efforts yield a return on investment (ROI).

Positive ROI means that you are bringing more customers in the door while a negative ROI means that you’re spending more than you’re making. 

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In other words, does your investment in SEO efforts actually pay off? 

The only problem is that search engine optimization is a long-term strategy that may not pay off in the here and now. While you might see some improvement in your search engine rankings early on, it can be a bit harder to track whether that leads to conversions.

Most people are going to find your business through organic search results — and ranking here requires you to focus your efforts on SEO. In fact, more than half of all search traffic comes from these organic results. 

Stop throwing your money away on an expensive SEO campaign and start to track whether it’s really helping you in organic search.

The good news is that you can measure SEO ROI using a simple formula, which we’ll cover in the next section. 

A Formula for Calculating SEO ROI

If you’re serious about seeing a positive ROI for your efforts (and you should be!), you need to know the core components of measuring SEO ROI.

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Whether you manage your efforts in-house or enlist the help of an SEO agency, you need to ensure that your dollars are well spent on a particular campaign. 

This SEO ROI formula will help you determine your success:

Profits (Revenue from SEO Investment – Cost of SEO Campaigns)/Cost of SEO Campaign

While it may look simple, calculating SEO ROI requires you to be vigilant about your stats and spending.

A few simple tools will help you to measure how your SEO efforts enhance organic traffic, but it’s important to note here that there are different ways of calculating the ROI of SEO. 

Gathering Data About Your Costs

Why It Matters Formulas Forecasting More

The first thing you need to do is calculate what you actually spent on your SEO campaign. After all, it shows up in your SEO ROI formula twice.

Oftentimes, this is challenging for people to assign dollar values toward because it encompasses so many moving pieces. 

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Consider what you’ve spent on some of these items when adding the cost of your SEO strategy:

  • Keyword research tools (unless you used free ones like Google Keyword Planner)
  • Salaries for in-house employees who dedicate their efforts to SEO
  • Services of an SEO agency
  • Freelancers who created SEO content for blogs, service pages, etc. 

While some of these are likely to be fixed costs (such as the price of a keyword research tool), others may fluctuate.

You can tally your SEO spend each month to ensure you’re still on track or take an average of what you spent over the last few months to see how much revenue you’ve earned from a consistent effort. 

Tallying Up the Cost of Conversions and Lifetime Value

With your costs firmly in hand, you can focus on the profits earned from any SEO campaign.

Google Analytics can help you see your conversion rate, but there are a few different ways to tally up profit and the ROI of SEO. 

Here are a few ways you can start to think about the return on your SEO investment:

Lifetime Value

First, you can think about the lifetime value of your conversion rate. If a customer’s lifetime value is worth $1,000 and you convert ten customers, you have earned $10,000 in profit.

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Of course, this means you need to know the statistics regarding your sales cycle like the back of your hand to accurately calculate SEO ROI. 

Affiliate Income 

You might also want to track your affiliate income. If you run an affiliate program, you should know how much revenue it brings in compared to the spend for managing that endeavor.

It might help you to show up in more places in organic search, but you have to weigh whether this tactic is truly bringing in enough income to warrant the financial spend here. 

Ad Revenue

Another way to think about your profit is through targeting ad revenue. If you can boost organic traffic, then you’re more likely to have eyeballs on your page, which leads to higher revenue from advertisements on your page. This is key to figuring out the profit of your efforts. 

Measuring Organic Traffic Through SEO Campaigns

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Organic search is the bread and butter of businesses that focus their efforts on an SEO strategy. As we saw earlier, a significant portion of your traffic likely comes in when you rank higher on the SERPs.

But the question remains: how can you measure organic traffic conversions, and how does the ROI of SEO play into this equation? 

This is easy enough to track with a Google Analytics account. You can track sales with an e-commerce report. Lead-generation businesses that know what they earn per lead can track conversion rates this way. 

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While SEO ROI can indeed be difficult to track, there is good news: you can get tons of organic traffic with a smart SEO strategy. 

How Much Organic Traffic Can You Get With SEO?

If you want to improve your average conversion rate, hiring SEO agencies might be the right move to make. They have robust SEO tools that can boost your organic visibility.

Many businesses want to know how much organic traffic they can see with an SEO strategy though. 

Unfortunately, it isn’t as clear-cut as many businesses hope. It depends on what SEO investments you make in your business (keyword research tools, blog articles, infographics, link-building campaigns, and more). 

While you can bootstrap your SEO and do many things yourself, you may have more success with your SEO performance when you hire a professional.

This means you’ll need to factor in the cost of SEO agencies and your other efforts to get proper conversion tracking. 

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Some people report upwards of 1,000% increases in their organic traffic with SEO agencies. 

KPIs to Keep Tabs on ROI of SEO

Organic search traffic isn’t as straightforward as it sounds. SEO costs can vary significantly when it comes to various keyword rankings.

This means that you might have to have a separate formula to track how your SEO tasks stack up when it comes to organic traffic conversions. 

Another formula might help you to keep tabs on your key performance indicators (KPIs) related to SEO performance:

Monthly Revenue = Total Searches for the Month x Click Through Rate x Value per Visit

Using Google Analytics, you can get a clear idea of how often your primary keywords were searched for and how often your link popped up and clicked on. 

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This click-through rate (CTR) is always changing as your site ranks higher and higher in the SERPs. That means that you may need to reevaluate this formula every month. You may also need to evaluate it if you have a new offer that increases or decreases the average value per visit. 

These KPIs will help you to keep tabs on your marketing strategy and help guide the decisions of your SEO consultant. 

Why Measuring SEO Strategy is Challenging

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For many businesses, it’s crucial to calculate SEO ROI to justify continued spending in this arena, but that doesn’t mean that the numbers are straightforward.

There are tons of roadblocks in your way that make a return on investment more difficult to track. 

Here are a few of the top reasons why measuring SEO strategy can be a challenge: 

Long-Term Commitment to SEO Tactics

Your SEO efforts aren’t likely to yield a return on investment in the first week you try them. Most of the time, you must stick with SEO for months or even a full year before you start seeing the effects.

Getting search engines like Google to pay attention to your content, storefront, and other business endeavors requires a long-term vision and strategy. 

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This means that in order to measure ROI, you will often see a negative number for the first few months of your efforts.

Don’t let this discourage you. Look for forward progress month over month to ensure you are on the right track.

Agency marketers can help you to see where your rankings have improved, how click-through rates are affected, and how much value you gained through these new customers. 

Must Make Financial Commitment Up Front

As a small business owner, you are likely scrappy about your spending on improving your business. While it can take a long time to yield stellar results from your SEO efforts, you must invest in SEO upfront. You have to pay for freelancers, agency fees, and even SEO tools without seeing an immediate ROI. 

This is enough to put most business owners off of SEO but keep your eyes on the horizon.

You’ll be stuck in place if you never boost your organic conversions and start to show up in the SERPs for your e-commerce stores, small business pages, and more. 

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Lack of Fixed Costs for SEO

Of course, there is also the small issue of having a lack of fixed costs. While some agencies have a fixed monthly fee, you might spend more on content production or trying a new tool for a month.

In fact, this lack of fixed costs leads many business owners to opt for paid advertising that has a fixed cost month after month. 

However, you won’t see a boost in organic traffic with paid ads. SEO work is the only way to reliably show up in the first few results on Google, boosting your CTR and resulting in more eCommerce purchases or phone calls to your business for lead generation. 

How to Use SEO ROI to Forecast

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Once you have conversion tracking figured out, the next step is using your return on investment to forecast what things will look like for your business financially into the future.

Take note of how many conversions you have gained through SEO over the past few months and how likely that is to grow in the coming weeks or months. 

With this idea in mind, you can start calculating what an average conversion rate will mean for your business value. 

If you get X more clients or click-throughs to your website, how much value does that produce for your company? It might look something like this:

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After six months of SEO strategy, you have grown traffic by 20%. In the next six months, you might grow by 20% more resulting in 40 extra leads. Each lead has a lifetime value of $100 which gives you a $4,000 forecasted ROI of SEO strategy.

This forecasted amount allows you to see how much you want to continue to invest in your SEO. 

Final Thoughts: Measuring ROI for SEO

No matter what type of business you run, showing up in organic search results is a core component of having more e-commerce events, closing more deals, or gaining more leads. SEO is your ticket to all of these events, but it requires an initial investment. 

Measuring SEO ROI is key to knowing how much you can afford to continue investing in the growth of your business goals. With these formulas in mind, you’ll have everything you need to make the most of your marketing channels and SEO efforts immediately! 



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Grab Microsoft Project Professional 2021 for $20 During This Flash Sale

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Grab Microsoft Project Professional 2021 for $20 During This Flash Sale

Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.

If you’re in charge of a business and you don’t have a clear understanding of how to approach projects in an organized and effective manner, that’s a problem. Like many leaders before you, consider leaning on software that’s designed to streamline the project workflow for companies representing a wide range of industries.

A rate that will only be available from April 19 through 22, you can get Microsoft Professional 2021 for just $19.97 (reg. $249).

This well-reviewed software comes with a range of pre-built templates that you can use to set your project off on the right foot. It supports a number of helpful functions like building complex schedules with varying timelines, auto-populating those schedules in instances where it can, and submitting timesheets that can be distinguished by project work and non-project work.

Some additional features of Microsoft Project Professional that can help entrepreneurs and their teams include what-if scenario generation capabilities. Microsoft Project Professional also allows you to sync projects on your local server with those online, which is massively helpful for remote teams.

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Its comprehensive and well-curated offerings are part of why Project Professional is rated an average of 4.7/5 stars on the Entrepreneur Store.

Don’t miss this limited-time opportunity to make a worthwhile investment in your business for the price of a beer at the ball game.

A price that will only last from April 19 through 22, you can get Microsoft Professional 2021 for just $19.97 (reg. $249).

StackSocial prices subject to change.

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AI Will Transform the Workplace. Here’s How HR Can Prepare for It.

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AI Will Transform the Workplace. Here's How HR Can Prepare for It.

Opinions expressed by Entrepreneur contributors are their own.

Our workplaces are about to undergo an unprecedented level of transformation, and HR will take center stage. Artificial intelligence will dramatically reshape HR in a way that goes beyond recruiting, hiring and talent management. Leadership teams at all levels need to embrace this change to transform and lead their organizations forward.

It’s the people, and not the technology, that makes AI initiatives a success. Intrapreneurs, in particular, are the driving force behind it. As I shared in Fearless Innovation, I noticed this when I was working on the innovation agenda for the Great Places to Work study — the most innovative companies were those that had a leadership team that was embracing intrapreneurship and were open to change.

HR is the beating heart of any organization, and as such, it needs to take center stage in both adopting and leading ethical and innovative AI transformation across the organization.

Related: How Artificial Intelligence Is Reinventing Human Resources

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4 tectonic shifts AI will drive in HR

1. A new wave of massive reskilling

As AI becomes more prominent across business functions, the need for new skills will only grow. Forty percent of enterprise leaders believe that their workforce would need to reskill as a result of AI and machine learning. In fact, research shows almost a third of all hours worked in the U.S. could be automated by 2030.

All of us need to reskill to some extent to be relevant in the AI era. Not only would people need to re-train, but generative AI is introducing a whole host of professions that have been non-existent until recently, from AI ethicists to human-AI interaction designers. Some of these roles might sound futuristic, yet they are becoming increasingly relevant as technology advances.

2. The great restructure

As automation takes center stage across more business functions, there will be the inevitable need for organizations to restructure and rethink how they work. This transition will not only involve the integration of new technologies but also introduce a shift in the workforce dynamics. Intrapreneurs will need to identify gaps both in skills and operational processes and forge brand-new roles for themselves and those they manage. HR must play a key role in enabling a smooth and easy transition in this regard. The transition will not be smooth or easy, and it’s only HR that has the capability to make it impactful.

3. Arrival of “digital humans”

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“Digital human” may sound like an oxymoron, but that’s the term that’s starting to appear in business and operational plans. More roles, regardless of industry, are becoming digitally enhanced where some form of AI assistance is embedded in their everyday work. A real-life example is the introduction of the digital nurse — AI-powered healthcare agents which have already been proven to outperform human nurses in certain tasks.

Imagine the impact these digital roles will have on the workforce the more sophisticated and prevalent they become. Eventually, HR will need to create policies and systems in place that account for this new type of “staff augmentation.”

4. Regulating the robot

The threat of AI bias and misuse is serious. Not only can the technology put many jobs at peril, but potential improper implementation can expose organizations to serious liability and negatively affect the workforce. From avoiding bias to inclusivity, HR teams play a critical role in the ethical deployment and management of AI technologies.

HR professionals will be tasked with navigating the delicate balance between leveraging AI for efficiency and ensuring that its application upholds fairness, privacy and non-discrimination.

Related: How to Successfully Implement AI into Your Business — Overcoming Challenges and Building a Future-Ready Team

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What HR intrapreneurs must do to embrace AI the right way

The future of work is being shaped by AI adoption, and its success hinges on the right approach from the outset. My experience shows that for successful organizations, one universal trait stands out: the presence of change agents. Every organization, regardless of size, benefits from intrapreneurs who are open to change and committed to spearheading transformation efforts. These intrapreneurs are pivotal in driving the future of work, as they help orchestrate the integration of new technologies into their business models.

HR and talent leaders should harness this dynamic, encouraging a symbiotic relationship with intrapreneurs to develop customized solutions for AI adoption, ensuring that they are not just keeping pace with technological advances but are actively shaping their trajectory.

Securing a seat at the table:

HR should take a proactive stance in the adoption of AI, even if it is still in its early stages within your organization. By securing a position at the forefront of the AI initiative, HR can and should facilitate and guide the entire organization in embracing this significant change.

As AI has the potential to impact every facet of the organization, it is imperative for HR to not only understand and advocate for this technology but also lead its integration across all departments. HR should encourage and support intrapreneurs and all employees to leverage AI in their daily tasks, demonstrating its value not just for operational efficiency but for personal and professional growth as well.

Master the technology:

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To effectively navigate and regulate AI, HR must first understand it thoroughly. Grasping the full potential of this technology is crucial for reaping its extensive benefits. HR plays a vital role in identifying the necessary tools and skills that employees must acquire and then integrating these learnings into daily work practices.

Before implementing AI more broadly, HR should initiate comprehensive training programs that not only educate but also reassure employees about AI’s role in the future of the business. By leading these educational initiatives, HR can shape the structure and effectiveness of these programs, ensuring they meet the needs of the organization and its workforce.

Related: 3 Ways to Prepare Your Business For an AI Future

Looking ahead

Generative AI has the transformative potential to redefine the business landscape, but realizing this vast potential hinges on more than just the adoption of technology. It critically depends on the talent within the workforce, driven by HR and bold intrapreneurs. These visionary leaders don’t just implement new tools; they exemplify their use, demonstrating the profound impact of AI across every level of the organization.

HR plays a pivotal role in fostering this environment, enabling intrapreneurs to guide and inspire every individual they touch. Together, they turn each employee into a catalyst for change, igniting a widespread passion for innovation that deeply resonates and sustains long-term success.

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Samsung: 6-Day Workweek For Execs, Company in Emergency Mode

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Samsung: 6-Day Workweek For Execs, Company in Emergency Mode

Four-day workweeks might have all the buzz, but one major tech company is going in the opposite direction.

Samsung is implementing a six-day workweek for all executives after some of the firm’s core businesses delivered lower-than-expected financial results last year.

A Samsung Group executive told a Korean news outlet that “considering that performance of our major units, including Samsung Electronics Co., fell short of expectations in 2023, we are introducing the six-day work week for executives to inject a sense of crisis and make all-out efforts to overcome this crisis.”

Lower performance combined with other economic uncertainties like high borrowing costs have pushed the South Korean company to enter “emergency mode,” per The Korea Economic Daily.

Related: Apple Is No Longer the Top Phonemaker in the World as AI Pressure and Competition Intensifies

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Executives at all Samsung Group divisions will be affected, including those in sales and manufacturing, according to the report.

Samsung had its worst financial year in over a decade in 2023, with the Wall Street Journal reporting that net profit fell 73% in Q4. It also lost its top spot on the global smartphone market to Apple in the same quarter, though it reclaimed it this year.

Though employees below the executive level aren’t yet mandated to clock in on weekends, some might follow the unwritten example of their bosses. After all, The Korea Economic Daily reports that executives across some Samsung divisions have been voluntarily working six days a week since January, before the company decided to implement the six-day workweek policy.

Entrepreneur has reached out to Samsung’s U.S. newsroom to ask if this news includes executives situated globally, including in the U.S., or if it only affects employees in Korea. Samsung did not immediately respond.

Research on the relationship between hours worked and output shows that working more does not necessarily increase productivity.

A Stanford project, for example, found that overwork leads to decreased total output. Average productivity decreases due to stress, sleep deprivation, and other factors “to the extent that the additional hours [worked] provide no benefit (and, in fact, are detrimental),” the study said.

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Related: Samsung’s Newest Galaxy Gadget Aims ‘To See How Productive You Can Be’

Longer hours can also mean long-term health effects. The World Health Organization found that working more than 55 hours a week decreases life expectancy and increases the risk of stroke by 35%.

The same 55-hour workweek leads to a 17% higher risk of heart disease, per the same study.

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