• by Todd Friesen , December 29, 2006

Taking the mystery out of the metrics

There is a "Simpsons" episode titled "The Springfield Files" in which Homer, after having had quite a few beers at Moe's Tavern, sees an alien wandering through the woods. The alien says, "Don't be afraid," but Homer screams and runs away, obviously terrified of that which he does not understand. The alien preaches peace and love, but all Homer sees is scary, glowing, green skin. I think this is a little bit like the problem people have with search-engine optimization. Despite its high profitability, clients can be nervous about it, because measuring its effectiveness is not as obvious as measuring that of a pay-per-click or media campaign. SEO's success metrics, however, are actually quite cut-and-dry. Once they make sense to you, SEO will become an attractive component in your overall marketing strategy.

You collect PPC data with more frequency than SEO data. If a PPC campaign demands it, you can chart your traffic and conversions hourly. Technically, you can do this with SEO, but it makes a lot more sense to compare data year-over-year, for two reasons: Primarily, so you can average the effects of seasonality. Secondly, SEO campaigns progress in phases, and their data is a lot more relevant when viewed in annual terms. When it comes to revenue-producing SEO (as opposed to brand-building SEO), there are five key metrics we use to define the success of a client's SEO campaign - rankings, traffic, revenue, ROI, and exposure.

>>Rankings. This metric is a matter of determining what words are important to your business and where you would like to rank for them. Because a Web site's total traffic-generating keywords could number in the hundreds of thousands, rankings are typically tracked using a subset list, usually an aggregate of keywords the client wants to rank high for and traffic/revenue-generating words from its PPC campaign. Success is measured by how words climb or drop in search-engine rankings.

>>Traffic. SEO is a phased process, and one of the phases is the fundamental site-optimization. This process is quite technical and involves everything from meta-tags to HTML changes, but the end result is to make your site more relevant to searches. When your search engine referrals increase dramatically over previous years, the optimization was effective.

>>Revenue. Of all the metrics, it is most important to compare revenue generated from natural search annually. It's not completely fair to credit SEO with a monthly revenue gain. However, if your overall revenue is significantly greater in the current month relative to the same period last year, you can give your SEO campaign a pat on the back (or maybe even a budget boost).

>>ROI. True revenue-based ROI is defined by new gross revenue from natural search divided by the cost of the SEO campaign. Say, for example, that last year's additional gross revenue was $12 million and the SEO campaign cost $120,000. The resulting ROI is 100:1- quite a hefty return.

>>Exposure. SEO success is also measured by exposure, or how many traffic-generating keywords your site has. If this increases yearly, your campaign is doing well. Exposure affects all the other metrics; more words mean more traffic, which means more potential sales, revenue, and increased ROI.

Homer Simpson's close encounter became a lot less frightening at the end of the episode, when the alien turned out to be a disoriented (and irradiated) Mr. Burns.

Once they solved the mystery, the characters heaved a collective sigh of relief. Like Homer, once you know how to judge the success of an SEO campaign, it becomes less of an uncertain budget expenditure and more of an effective way to increase your company's revenue. There's nothing scary about that.

Todd Friesen is director of SEO for Range Online Media. (todd@rangeonlinemedia.com)