Whether you are an in-house SEM/SEO or work for an agency, you need to be able to present solid data and realistic predictions to get your recommendations realized. This can be complicated by the fact that none of us know Google’s algorithm, nor can we predict how it and the state of search will change over the next year.

(Cartoon by Hugh MacLeod – Read his book Evil Plans)

In order to get a project off the ground, Search Marketers have to approach their proposals exactly the same as any other department in a company. But they often don’t. I think that’s why a lot of projects never get off the ground. If you really want a budget, or you really want this client to sign on with you, you must be able to communicate your vision to people who may not know (or care) about Web marketing at all. Your project needs to rise to the top and past muster in order to get put in their plan. Do a bad job putting it together and you won’t get it off the ground. If you do manage to get it approved and do a poor job predicting expenses and ROI, you may not get another project.

While it would be great to work for a client that says yes to every SEO project I can dream up, I’ve found that overcoming objections forces me to define my plans more clearly. The more objections they have, the more questions they ask, the more defined the plan becomes. The better the roadmap is, the easier the project becomes to execute. Of course, if the objections or questions are a stall tactic because the client really isn’t ready or doesn’t have the money for the project, you have to be able to recognize that too and either revise your plan or perhaps choose something smaller to build trust.

One of the hardest elements to calculate in Search Marketing is ROI. Because there are so many variables that we can’t control, it can be scary to make prediction at all. Fortunately, there has been a lot of great research done in recent years that can help you get it done and have some confidence in your numbers.

Seven Great ROI calculators for Three Projects: CRO, PageSpeed Optimization (WPO) & Structured Data Markup:

I). CRO – Conversion Rate Optimization ROI Calculators:

1. WiderFunnel – Basic CRO model – Lead Generation (Excel)
2. WiderFunnel – Basic CRO model – eCommerce (Excel)
3. WiderFunnel – Basic CRO model – eCommerce & Margin (Excel)
4. WiderFunnel – Basic CRO model – Freemium (Excel)
5. WiderFunnel – Basic CRO model – Registrations Generation (Excel)

These five calculators were developed by the fine folks at WiderFunnel.com a company that specializes in Conversion Rate Optimization.

II). Page Speed – ROI Calculator for Web Page Performance Optimization:

Calculator 6. Click the Excel Image below to access the downloadable workbook

I created this spreadsheet from the research and calculations provided in this great blog post from SpeedProfs.com. It is pre-populated with formulas so all you have to do is plug in your numbers. It is based on a 2 second improvement (40%) in page speed. The hypothesis SpeedProfs makes is that a 40% improvement in page speed could increase your site traffic by 20%, conversion rate by 25% and average order value by 10%. If you feel like the results for your business model could produce more or less traffic, or perhaps not impact average order value, you can easily adjust the formulas to fit your model. This at least provides you with a starting point.

III). Structured Data Markup

Here is how to calculate ROI using a combination of data from Google Webmaster Tools and Google Adwords [If you don’t use Google Adwords simply omit this from your calculation].

1. Set the date range in GWT for the maximum – 90 days (or 3 months)
2. Perform this equation to determine your CTR: Clicks/Impressions. For example 2,500/22,000 would be a CTR of 11.36%
3. From GWT (CTR x 1.3) X Actual Impressions for last 3 months = Organic Visitors after adding structured data markup

In my example this equation would be (.1136 x 1.3) x 22,000 = 3,250 organic visitors in a 3 month period or 13,000 clicks/year, versus 10,000 a year before structured data was implemented.

That translates into an Annual organic traffic increase of 3,000 visitors.

4. Visitors x Conversion rate x Average Order Value = 2013 Projected Revenue from organic traffic after adding Structured Data Markup

It looks like this with my numbers plugged in:

13,000 x .0337 x 81.65 = $35,771

Projected Revenue – 2012 Actual Revenue = REV Lift from organic traffic

$35,771 - $25,312 = $10,459

REV lift * Margin = Project ROI

$10,459 * .42 = $4,393 Organic ROI

Now I perform a similar calculation for Paid Search:

1. Log into Google Adwords and set your date range for all of last year [I would have used the same date range in GWT but the maximum date range available in the tool is 3 months]

2. Perform this equation to determine your CTR:

Search Network Clicks/Search Network Impressions.

For example 17,289/525,860 would be a CTR of 3.29%

(Note: Don’t include Display Network Ads because the presence of Structured Data markup has very little impact on how these types of ads perform, at least at the moment).

3. From Adwords: (CTR x 1.3) X Actual Search Impressions for last year = Paid Visitors after adding structured data markup

In my example this equation would be (.0329 x 1.3) x 525,860 = 22,491 paid visitors per year versus 17,289 before structured data was implemented.

That translates into an increase in 5,187 visitors.

That improved CTR could also have a positive impact on Quality Score for ads. This means that the CPC for those addition visitors could be significantly less.

4. Visitors x Conversion rate [for PPC traffic] x Average Order Value [for PPC traffic] = 2013 Projected Revenue from Paid traffic after adding Structured Data Markup

It’s important that when calculating the values for Organic and Paid Traffic you are using the corresponding Conversion and Average Order Values for each type of traffic and not the site average overall for all types of traffic. As you can see, in my example the conversion rates and average order values for these two traffic types are quite different.

It looks like this with my numbers plugged in:

22,475 x .049 x 65.49 = $72,124

Projected Revenue – 2012 Actual Revenue = REV Lift from organic traffic

$72,124 - $47,673 = $24,451

REV lift * Margin = Project ROI

$24,451 * .42 = $10,270 Paid Search ROI

5. Final step is to combine both Organic ROI and Paid ROI and subtract the project’s cost to get total ROI:

In my case that would be ($4,393 + $10,270) - $2,000 = $12,663 Total Projected ROI in the first year.

Is your head spinning? No worries. Here’s a spreadsheet that includes all the formulas so all you have to do is plug in your numbers and the calculations will be done for you:

Calculator 7. Click the image below to access the Excel Spreadsheet

Note: The current sheet contains the data from my proposal. Simply click on the Excel icon to download a copy to your local computer and swap in your data for mine. Enjoy! I hope everyone gets the budgets they want in 2013 and I look forward to your comments and feedback.

Cat Image sourced from Digital-Kaos.