The Roi Of SEO

The term ROI is no longer strange to many people, especially investors and traders. However, not everyone understands what ROI is? Join GTV SEO. Learn about the basic definition, advantages - disadvantages and methods of calculating ROI applied in SEO, Digital Marketing!

1.What is ROI?

ROI (Return on Investment) is the rate of return, the rate of return on investment. ROI shows the ratio of expected revenue or profit to the speculative selling price of a project.

ROI Index is used to Assess the feasibility of a Project or use ROI to compare the investment efficiency of multiple Projects. From there, you can make the best investment decision. In Marketing, the application of ROI is very popular, especially in SEO and Content Marketing.

In other words, the Return On Investment indicator is a calculation that shows the probability of successfully inheriting profits from what you speculate.

2. ROI Calculation Method

ROI calculation formula

ROI = Net Profit/Speculation Cost.

Where: Net profit = Expected revenue – speculative costs

For example, you buy a stock of 20 million, plan to sell it for 100 million, and make a profit of 80 million. So ROI = (100-20)/20 = 400%

In addition, how cheap the ROI is, depends on the industry you are speculating on. To go deeper into how net profit is calculated, we calculate in turn:

Expected revenue

The expected revenue of an entity is usually calculated as the total number of goods sold multiplied by the cost of goods sold. How much money you get, you proceed to multiply by the expected profit %.

Expected Revenue = (Cost of Goods Sold x Quantity) x Expected Margin

Investment cost

Is a collection of most of the selling price models that the company specializes in its trading activities. Including: ground price, price range for equipment, infrastructure, personnel, machinery, tax lines, electricity and water prices,…

3. ROI calculation formula in SEO, Digital Marketing

In general, for you to do it will have 3 main steps:

• Step 1: First, look at the Click Through Rate (CTR) for each keyword located on the top 2 pages of Google search results to calculate the ROI of SEO. Then, if you are on the first page of Google, you can estimate the growth of organic traffic to your website.

• Step 2: Measure the value of organic traffic generated by SEO compared to the cost of Adword, when there is the same amount of website traffic.

• Step 3: We will calculate the ROI of this organic traffic. You can apply the ROI calculation as I introduced it to SEO as well.

For example: You receive 1,000,000 VND with a cost of 500,000 VND, then applying the ROI calculation formula, your calculation will be as follows:

SEO ROI = (LTV - CAC)/ CAC

(1,000,000 – 500,000) / 500,000 = 100% ROI

4. Pros and cons of the ROI formula

Return on capital (ROI) also has fixed pros and cons that you need to know as follows:

Advantages of ROI

The formula for calculating ROI is pure and easy to apply.

Apply favorable comparisons.

ROI is useful in Understanding short term investment portfolios with effective naming.

ROI (Return On Investment) helps to see the importance of Marketing means, especially SEO.

By approving the rate of return, investors will have an overview to make the right development decisions.

Clearly, express specific interests of the entity for speculation.

Disadvantages of ROI

Besides comparing rates of return, you need to consider many other investment capital ratios to forecast.

The rate of return on capital is not really suitable for long-term speculation.

Although the method of calculating ROI is simple, you need auxiliary tools to calculate more effectively and accurately.

Doesn't show why ROI is low/high.

To determine whether to invest or not, it is not possible to rely solely on ROI.

When you understand the advantages and disadvantages of ROI (Return on Investment), you will know how to use it properly and effectively at work.

5. How much ROI in SEO is good?

Low SEO ROI or not depends on your business. Every unit is different, which makes setting medium or low SEO ROI grow into competition.

For example, one organization invests in SEO every month for 1500$, another unit spends 3000$. In addition, the leading value units are also different.

Think about the ideal ROI for businesses before starting SEO. This report can be used as a benchmark for the team to measure against itself.

You should start with a small percentage to get the best results. And next, when you collect data will aim for larger proportions.

About how to calculate ROI, measure for SEO do you have any more doubts? If so, please leave a comment below this post!

6. Conclusion

With the above GTV SEO sharing, you must have understood what ROI is and its advantages and disadvantages. As well as knowing how to optimize ROI in SEO and Digital Marketing, right? To optimize ROI in reality there are many different ways. But most importantly, you need to understand the importance of ROI. And the secret to calculating ROI to evaluate the effectiveness of your trading strategy.

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