How SEO brings ROI to business websites

Many people doubt search-engine optimization, or “SEO” for short. Some have a bad impression of it from watching the TV show “The Good Wife” or reading about the “dirty tricks” of a certain department store in The New York Times. They say it’s nothing more than “black- hat” tactics that can get you in trouble with Google. These people want to cut back their marketing spending in a slow and uncertain economy. Some of this thinking may even be correct.

But SEO, when done right, is a business’s best friend. Why? Three words: return on investment (ROI).

The average return-on-investment for organic, ethical (or “white hat”) SEO from an online marketing firm is 1:15. In other words, for every dollar an organization invests in SEO, it gets $ 15 back, on average.

Additionally, unlike much traditional marketing, SEO allows companies to measure what they get. As a result, marketing managers don’t have to trust that it works: it’s evident. And the fact that SEO and other branches of online marketing (email, video, social media, paid search/PPC) are so much more quantifiable than a host of traditional marketing methods makes them that much more desirable to budget hawks and other professional number-crunchers.

A CEO’s take on the ROI of SEO

In a recent webinar, Rand Fishkin, co-founder of SEOmoz and co-author of The Art of SEO, identified organic search marketing as having the highest return of all forms of marketing. One of his stated reasons is that organic search marketing is all about giving people information that they want, when they want it. The keys are the want and the when. Giving Web users what they’re looking for at the right moment increases the likelihood of winning their future devotion and traffic, if not their business (assuming they’re the right people). Furthermore, he also suggested that other forms of interruption-based traditional marketing are not only hard to track, but also hard on the long-term value of your marketing dollars.

Therefore, whether considering SEO, paid search, email or some other form of online marketing, prudent businesses look for the return.

Monkey see, monkey do

Current statistics on social media marketing, a cousin and component of SEO, reveal the fact that an overwhelming majority of successful companies are spending time and money on social media. For example, this year’s recently announced Inc. 5000 fastest-growing private companies in the U.S. A snapshot of social-media use among the Inc. 500 shows the following:

78 percent use Facebook

78 percent use LinkedIn

73 percent use Twitter

9 percent use none of these

An ROI thought experiment raises the question: Are the three-fourths of thriving Inc. 500 companies that participate in multiple forms of social media truly getting a good return? Do they even know what kind of return they’re getting? Companies with 900 percent growth over the last three years may find themselves with cash to burn, but the question is relevant for more than a few CFOs: Is the investment really paying off?

ROI and the long haul

Prudent companies care about the immediate and long-term viability of their online marketing. In the course of regular evaluation, companies doing digital marketing need to throw out low-ROI projects and repeat high-ROI ones, according to Fishkin. Essentially, it’s good to repeat what works well (and is highly profitable) and to discard or amend what doesn’t (and isn’t highly profitable).

Another way to evaluate the success of a company’s marketing is to ask the question, “Is the online marketing translating into online sales or sales leads?” This question can (and should) be applied to any online marketing initiative, whether blasting email newsletters, shelling out for Google PPC, or redesigning an entire website.