How to Calculate Link Building ROI

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

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

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

Considering the extraordinarily low amount spent by most businesses and marketers, you can believe their expectations would be of a trackable ROI.

In fact, I think you can measure the ROI of link building quite accurately. These ROI calculations fall into two categories:

Understand short-term appeals so you can already calculate the value of sales or conversion on your website.

Either way, you need to have the correct metrics and conversions in Google Analytics and a solid understanding of it and other commonly used SEO tools.

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

Methods of calculating return on investment: short term

A good understanding of your return on investment from link building actually takes some time to develop. This should be measured over months – up to a year or more – rather than weeks.

However, we all know that marketers can be rated on a much shorter term. Admittedly, there are limited metrics to calculate your short-term ROI.

A good starting point to talk about short-term ROI centers on How? ‘Or’ What you went on link building. My short-term strategy is to generate a piece of content on the website and then link to it.

This content is expected to generate traffic immediately.

Take a look at the screenshot above. We started link building for this client in early 2018.

We ended up increasing organic traffic by over 76% year over year, but the noticeable effects only started to show after 7 months into the year.

Although there was a short-term increase in traffic early on, the client didn’t begin to see a significant return on investment until well before the campaign ended.

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

Comparing organic rankings and traffic before and after you publish your content—usually around a 90-day window, if possible—offers insight into the return on your link building effort.

Click-through rates for organic search ranking positions are a reality.

Going from unranked or low ranked to the third position represents an increase of 0 to 10%.

Going from third to first corresponds to a 10% to 30% increase in absolute click-through rate.

Of course, total keyword search volume is misleading, so be sure to research search intent as well.

With actual search volume in hand, ranking increases can be tied to tangible ROI.

Determining actual traffic ROI dollars can be trickier, but if you or your client are able to measure it for other channels, doing so for link building shouldn’t be out of reach.

For this to work, you need to have Google Analytics and conversions set up correctly, otherwise you won’t be able to concretely quantify the value that 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 work with an e-commerce site and have integrated your Google Analytics with their main platform (which is easy to do with top platforms such as Shopify, Magento and BigCommerce), all you need to do is go to Acquisitions > Channels within Google Analytics.

Then you can see the channel breakdown (organic being the most relevant 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 (as in the example above).
  • Or, you can go deeper 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 real monetary value for each session.

E-commerce sessions (last 6 months)

550,000

E-commerce revenue (last 6 months)

$50,000

Value per session

$0.09

Increase in e-commerce sessions (next six months)

27%

Link Building ROI

$13.50

Here is an example above for a client for whom we recently undertook a link building campaign. (All traffic numbers are organic.)

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

This article on budgeting for SEO, however, puts that number into perspective. In the short term, your return on investment can be quite low or even negative.

It’s only when you start to consider the lifetime value of your customers and other long-term effects that the true value of link building begins to emerge.

Methods for Calculating Return on Investment: Long-Term

Over the long term, from six months to several years, putting a specific amount or return on investment on link building becomes much more difficult, even if it increases dramatically.

Also, moving the needle takes a lot more effort to improve when you’re already at or near the top instead of starting from scratch.

At this point, the best way to gauge link building ROI is with a metric like Domain Authority (DA).

Moz Domain Authority is “a search engine ranking score developed by Moz that predicts a website’s ranking on search engine results pages.” It is based on a scale of 0 to 100, with 100 being the highest rank.

There are of them three important things to note about DA.

The very first is that it has recently undergone some changes, so be sure to study.

Second, DA is logarithmic, which means it’s exponentially easier to go from 10 to 20 than from 80 to 90. It literally takes orders of magnitude more effort, 10 times more effort, to keep going increase your AD.

Finally, be aware that DA is a comparative rather than an absolute metric. In other words, your goal is not necessarily to increase your AD to 100.

Sites like Facebook, YouTube and Wikipedia have very good DAs because they have millions inbound and outbound links.

Instead, you should research your competitors for traffic or ranking and assess your DA against their sites and pages.

domain authority

In the example above, our client is on the left. Even though we increase their DA, our tracked competitor sites also increase their DA. Also note that a 43 DA is usually good, but on this particular space there is still room to grow.

In the long run, you can increase your DA by building lots of high-quality links to your website in lots of places. It takes time to accomplish and sign up for DA, but it’s worth it.

Increasing the DA makes each new content perform better than if your DA was lower. In other words, it gives a multiplier effect for all your ongoing efforts.

Another long-term way to gauge your link building ROI is to use Google Search Console to look at impressions.

Often, digital marketers will only focus on clicks, pageviews, and sessions, but that’s a mistake. The long-term growth of a website should be viewed as holistically as possible.

This breakdown by Glenn Gabe helps clarify all the different ways Google Search Console records an impression – there are many, and often an impression doesn’t mean a user has actually “seen” your website.

Nevertheless, the impressions should not be discounted in the long term. Optimizing for impressions and visibility on the SERP is also important for an increasingly zero-click future.

More resources:


Image credits

Featured Image: Unsplash
Screenshots taken by author, June 2019

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