How to Calculate the ROI of Link Building in SEO.

Addlios
Addlios
Nov 4 · 4 min read
Link Building, Addlios
Link Building, Addlios

Unlike your other digital marketing efforts, link building doesn’t seem to create immediate value.

You can calculate the ROI, positive or negative, on a sale from your marketing channels, but calculating the value of building links seems murkier.

In a survey last year, less than 50% of small businesses had an SEO budget at all, and a plurality of those businesses spent less than $100 per month.

Given the extraordinarily low amount most businesses and marketers spend, you can believe their expectations would be for a trackable ROI.

In fact, I believe you actually can measure the ROI of link building pretty specifically. These ROI calculations fall into two categories:

  • Short-term.
  • Long-term.

Understanding the short-term calls for already being able to calculate the value of sales or conversion on your website.

In both cases, you must have the correct metrics and conversions set up in Google Analytics and have a solid understanding of it, as well as some other commonly used SEO tools.

If you can’t measure the ROI of your other marketing efforts, then measuring the ROI of just link building will be futile.

Methods to Calculate ROI: Short-Term

A good understanding of your ROI from link-building actually takes some time to develop. This should be measured over the course of months — leading up to a year or more — rather than a few weeks.

However, we all know that marketers can be evaluated on a much more short-term basis. There are some admittedly limited metrics for calculating your short-term ROI.

A good place to start for talking about short-term ROI centres on how you’ve gone about link building. My short-term strategy is to generate one piece of content on the website and then drive links to that.

The expectation is that this piece of content gets traffic right away.

Short — Term ROI metrics

Take a look at the screenshot above. We commenced link building for this client at the beginning of 2018.

We ended up increasing organic traffic over 76% year over year, but noticeable effects didn’t start accruing until 7 months into the year.

While there was a short-term bump in traffic right as we started, the client didn’t start seeing a large ROI until well into the campaign.

Using tools like SEMrush and Ahrefs, you’ll look at organic rankings and search traffic specifically.

Comparing organic rankings and traffic both before and after your content piece’s publication — generally around a 90-day window, if possible — offers a snapshot of the return on your link building effort.

The clickthrough rates for organic search rank positions is a real thing.

Going from unranked or low-ranked to the third position is a 0-ish to 10% increase.

Going from third to first is a 10% to 30% increase in absolute clickthrough rate.

Of course, total search volume for keywords is misleading, so make sure you research search intent as well.

With the real search volume in hand, ranking increases can be tied to a tangible ROI.

To nail down the actual ROI of traffic in dollar amounts can be trickier, but if you or your client is able to measure this for other channels, then doing so for link building shouldn’t be out of reach.

For this to work you must have Google Analytics and conversions set up correctly, otherwise, you won’t be able to put a concrete figure on how much value an increase in organic traffic will bring you.

Ghost Marketing also has a good case study on how to calculate ROI for link building.

If you’re working with an e-commerce site and have integrated your Google Analytics with their backend platform — easily done with the top platforms like Shopify, Magento, and BigCommerce — then it’s just a matter of going to the Acquisitions > Channels within Google Analytics.

Then, you can see the breakdown of channels (with organic being the relevant one here) and their revenue potential.

At this point, you can either:

  • Segment the organic traffic from the previous X months and compare it to the future Y months after your link building efforts (like in the example above).
  • Or, you can go more in-depth and calculate the value of a session.

Take a date range of 6 months or more and divide the total organic revenue by the organic sessions. This will give you an actual dollar value for each session.

550,000

$50,000

$0.09

27%

$13.50

Here’s an example above for a client we recently undertook a link building campaign. (All traffic figures are organic.)

They started with a baseline of 550,000 sessions and each session was valued around $0.09. We were able to boost their e-commerce sessions 27%, netting a modest immediate ROI.

This article on budgeting for SEO, though, puts this figure into perspective. In the short-term, your ROI may be quite small or even negative.

It’s only when you start considering the lifetime value of your customers and other longterm effects does the true value of link building start to show.

To know about the Long-Term returns click here.

Addlios  — Marketing Done Right

WE ARE A DIVERSE TEAM OF DIGITAL MARKETING EXPERTS, INNOVATION THINKERS, CREATIVE DESIGNERS AND WEB DEVELOPMENT WHO ARE PASSIONATE ABOUT GROWING CLIENTS BUSINESS, HELPING THEM ACHIEVE THEIR GOALS, AND MAKING A DIFFERENCE BY RAISING OUR INDUSTRY STANDARDS.

Addlios

Written by

Addlios

Addlios  — Marketing Done Right

WE ARE A DIVERSE TEAM OF DIGITAL MARKETING EXPERTS, INNOVATION THINKERS, CREATIVE DESIGNERS AND WEB DEVELOPMENT WHO ARE PASSIONATE ABOUT GROWING CLIENTS BUSINESS, HELPING THEM ACHIEVE THEIR GOALS, AND MAKING A DIFFERENCE BY RAISING OUR INDUSTRY STANDARDS.

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