SEO formula for EBIT & ROI

Profit Oriented SEO Tactics

A profit oriented mindset is critical to success! The primary objective of any for-profit company is generating profit. Profit is simply your sales minus your costs.

Profit = Sales – Costs

EBIT Target

In accounting and finance, earnings before interest and taxes (EBIT), is a measure of your profit that includes all expenses except interest and income tax expenses. It is the difference between operating revenues and operating expenses. The formula looks like:

EBIT = Revenue – Operating expenses + Non-operating income

 

SEO EBIT, a formula for Success!

A few simple formulas to guide your tactics:

SEO Success Formula

 

Organic Search Profit ≈ Organic Search Revenue  + Organic Ad Revenue – Product Cost – SEO Service Costs – SEO Team Member Costs

To identify the profitability of your SEO efforts we first start by identifying your organic attributed revenue; this is a combination of your organic search revenue from organic search sources plus any other site monetization attributed to organic search traffic. We remove product costs, SEO service and team member costs from the revenue to find your SEO profitability.

Action items include:

 

Organic Ad Revenue ≈ Organic Search Traffic * Site Monetization Ad CTR * Average CPC for Advertisers

Your Organic Ad Revenue can be identified by reporting on site monetization clicks which are tagged as coming from organic search sources then multiplying these by the average CPC for advertisers on your site.

 

Organic Search Revenue ≈ Organic Orders (Organic Search Traffic * Bounce Ratio * Conversion Rate) * AOV

Your Organic eCommerce Revenue can be identified through your analytic as orders resulting from organic search sources. Factors that play into your organic revenue include how much traffic you receive, how qualified or sticky the traffic is, how effective your calls to action are to lead customers through the buying funnel and the average value of eCommerce orders.

Action items include:

 

Organic Traffic ≈ Impressions * Click Through Rate

Your organic traffic can be easily identified through your analytics reporting. Factors that contribute to your organic traffic include how many people in total are searching for the products we are featuring on your website, how many people see your listing in the search engines by how many people click on your link.

Action items include:

 

Impressions ≈ Search Demand * SERP Ranking

Impressions gives us an indication how often your site comes up for a particular search query. Factors that contribute to the number of impressions include the total search demand for targeted queries & your position/visibility in the search engine results page.

 

Search Demand ≈ Number of Indexed pages * Matched Keywords + Average Monthly Searches for related Queries 

The focus is on servicing existing search demand. We can set realistic organic traffic expectations by identifying what the total size of the pie is and how much we currently attract. By identifying the number of indexed pages in your site and which keywords match these pages we can then identify the average number of monthly searches for terms we could potentially rank for. You will want to filter this number down to your service/coverage area.

 

Click Through Rate ≈ Organic Clicks / Impressions * Meta Optimization Score

A Click is how many times a user clicks on your organic search listing. A click through rate (CTR) is the percentage of how many people saw your listing that clicked. As identified earlier, impressions are greatly increased based on how high we rank in the search engines. Once we are able to achieve high rankings we can further improve your CTR by optimizing your meta titles and description, the more relevant and compelling the better.

 

SERP Ranking ≈ Relevance (Content Mapping + Intent Matching + Device Matching + QDD/QDF) + Performance (Relative CTR + Stickiness + Usage Signals + Return Rates) + Trust (Page Authority + Usage Signals + Social Signals + Domain Security)

There are a lot of factors at play to determine your rankings in the search engines. Read a recent post on Modern Search Ranking Factors for a great overview on the topic.

From a high level we rank for a search query if the page’s content matches the query. At which position we rank for a search query is determined by the authority of the page the content is in. The search engines will adjust where we rank based on who is searching and their likely intent for the search. They will further adjust based on the expected user experience. If they are searching from a mobile device, the site should be mobile friendly, or if they are looking for an eCommerce term the site should be secured by SSL. Based on volume trends of recent queries if a spike is identified likely fresher content will be served versus if a query trend is constant older well-linked content is served. Another factor is with more vague or broad the queries Google attempts to make the results more varied, for this we optimize multiple content types. Yet another factor is based on usage signals and user interactions in the search engines results pages (SERP) as well as on your site.

Action items include:

 

Page Authority ≈ (Domain Authority / Internal Links) + (Linking Domain Authority / Links on Page)

In determining the Page Authority, we look at both on-site and off-site factors. Generally speaking, the overall domain authority passes value through internal linking to establish the Page Authority. The Page Authority is then compounded by links coming from other websites to the site.

 

Quality Content ≈ Keyword Matching (In Head/Body) * (Inbound Links + Targeted Anchor Text Variations) / Device Specific Usability & Metadata

Great Content + Excellent UX + Lots of Traffic + High Engagement