How Profitable Is SEO? (and How to Calculate SEO ROI)

One of the reasons why some business leaders hesitate to go SEO-heavy is because they’re unsure about its profitability. Others think that you  can’t calculate the ROI of an SEO campaign (which is false, and a total misconception).

In reality, investing in SEO is one of the most profitable things you can do in the digital age.

Exactly how profitable? Read on, and I’ll show you how to calculate the ROI of SEO for your specific business.

What is the ROI of SEO?

SEO ROI measures the revenue of SEO campaigns against the total cost of those campaigns.

It’s one of the most important KPIs that you can measure because it helps validate your efforts and ensures you’re spending money in the right areas.

But the ROI is different for every industry. Lawyers can make a million-dollar profit from a single click, where many of our e-commerce clients are working on tight margins and have to add up many pennies/dollars to track success.

How to Calculate the ROI of SEO

Here’s a pretty simple formula that you can use to measure the ROI of your SEO campaigns:

(Revenue from SEO – SEO Expenses) / SEO Expenses = SEO ROI

For example, let’s say you generate $10,000 in revenue from SEO, and you spent $7,500 on SEO tactics.

The math would look like this:

($10,000 – $7,500) / $7,500 = 0.333

This would result in a 33.3% ROI from SEO.

However, we’re just barely scratching the surface here with what goes into this formula, and there’s a lot more that you need to take into consideration to ensure you’re measuring things correctly.

Measuring the Profitability of SEO

To get accurate numbers to input in your formula, you’ll need to piece together different pieces of data.

Measure SEO Expenses

Add the total costs of all SEO-related expenses for the period you’re measuring. Examples include:

• SEO tools and software (Ahrefs, SEMrush, etc.)
• Personnel costs (staff, freelancers, etc.)
• SEO agency costs
• Link building costs
• Website costs (hosting, SSLs, etc.)

This list looks a bit different for everyone, and can vary depending on when you’re running the calculations. For example, you might do a complete website re-design every 2-3 years. So that won’t always be included in your calculations.

Measure the Value of Your Organic Traffic

Now you need to understand how much revenue you’re generating from organic clicks. There are a few different ways to approach this.

One option is to set up an event in Google Analytics that separates all of your organic conversions (whether it’s purchases, leads generated, whatever you want). You just need to set up those parameters so that GA can give you a number value for that event.

Alternatively, you can track the value of your traffic for specific keywords. The easiest way to do this is through an SEO tool, which will estimate the value of the keywords for you.

How Long Does it Take For SEO to be Profitable?

If you’re calculating the ROI of your SEO campaigns right away, you probably won’t see positive results. That’s because SEO takes time.

For example, if it costs me $500 to produce a blog post today, I probably won’t break even on that specific post tomorrow or even next week. But if I commit to publishing one blog per week for the next year, that $26,000 investment can easily pay for itself in organic conversions, especially in an industry where the average client is spending a minimum of $5,000.

I’d need roughly five new clients finding me organically to break even. But the wait is well worth it because my ROI from there is exponential.

Best of all, once I publish those blogs, they’re mine forever and continue to pay dividends over time. That’s why SEO is so different from PPC. When you stop running paid ads, you also stop seeing returns, but your SEO efforts continue drive results indefinitely, and the profitability is sky-high because you’ve already done the work and laid your foundation.

Looking Deeper at the Profitability of SEO (With Examples)

Here are some other ideas to get you thinking about ROI. FirstPageSage just published a 2024 study about the CTR of Google’s top positions in the SERPs. Here’s what they found:

As you can see, the top three organic positions dominate—responsible for nearly 70% of all clicks. 

While this is not an exact science , you can use this type of data to extrapolate what you will get for each keyword in terms of ROI.

For example, let’s just say you rank number one for “cheap golf clubs” and you get 2,000 visitors per month from that. With a 2% conversion rate, you can close about 40 deals.

If you make $35 gross on average per order, that number one rank is worth $1,400 per month ($16,800 gross profit per year) from that one keyword. If you figure that 50% of your customers will buy more than once, you can add another $35 x 20 or $700 from those customers.

If you had to buy the same “cheap golf clubs” keyword in Google, it could cost several dollars or even $10 or more per click. Some terms, like “mesothelioma lawyers,” are as high as $220 per click! Let’s say “cheap golf clubs” was a reasonable $3 per click. If you get 2,000 clicks through organic search, that’s a savings of $6,000 per month ($3 x 2,000 clicks) because you didn’t pay for ads. So make sure to add in the value of costs averted.

Final Thoughts

So, is SEO profitable? Absolutely.

Not only is SEO highly profitable, I’d argue that most of your ROI calculations are actually undervalued. Most data won’t take into consideration things like how many new customers are now on your email list and may be encouraged to buy from you year after year.

Unlike the paid ads, these ranks may continue to stay reasonably well-placed for a time, even if you stop doing aggressive SEO. So calculating the value of search must be looked at over the long term.

In addition, if you are not factoring in the number of people who call or come to your store versus use an online shopping cart or submit a form, you may be leaving out ROI from offline conversions. And if you are not tracking (in your website analytics) when people come from other sources, if they originally found you from SEO, you are not giving full credit to organic search.

When all things are factored in, the marketing world agrees that SEO is a tremendously strong channel and capable of generating millions of dollars in revenue.

Are you getting the most value from your SEO?