The return on investment for web marketing efforts are based on just two numbers: website traffic and the website conversion rate.
Of course, traffic is the number of visitors. The conversion rate is the percentage of visitors who “convert” into leads or customers.
traffic x conversion rate = ROI
The first number multiplied by the second equals the number of people who take action. This means leads for lead gen websites and customers for e-commerce sites. Newsletter subscribers, donors and social media followers are other types of conversions.
Traffic levels are mostly determined by web marketing activity. Companies that are active in content marketing — blogging, social media and email marketing — will generate more traffic.
Conversion rates are mostly determined by the website design. Attractive, easy-to-use websites with compelling content convert at higher rates.
Of course, this is is not an absolute rule. Some marketing may increase conversion rates and some websites will naturally attract more traffic.
Anything times zero is zero...
Since ROI is only possible when you have visitors, let’s focus on our website traffic sources. It all starts with a visit. Where does website traffic come from?
Traffic may come from branding efforts, advertising, offline networking or many other sources. But there are three main web marketing activities that drive traffic:
Search Engine Optimization
Content is at the heart of all three of these traffic sources, which is why together, they are known as content marketing.
Search Engine Traffic
Most visits to most websites start with a search. Search is still the number one way to get to whatever website your heart desires. This is a super important traffic source with a huge potential impact on traffic.
Some companies chase rank to the point of obsession. But rank alone doesn’t produce ROI. If few people search for the phrase or if the conversion rate of those visitors is low, rank won’t help a bit.
There are three main factors that determine search traffic levels:
Link Popularity: The combined quantity and quality of links to your website determines the overall likelihood that your site will rank. Links make a site credible to search engines.
Keyword Research: Unless you align pages with phrases and topics, you’re only chance is to rank by accident. Remember, search engines don’t rank websites, they rank webpages. Each page has its own chance of ranking if it’s aligned with a page people actually search for, and if that phrase isn’t overly competitive. You can conduct keyword research through SEMrush to see where your website stands.
The Page Itself! How well does the page indicate its relevance? Using the key phrase on the page is critical, but there are many other “on page” factors, such as length, internal links and load time.
Google knows all the tricks, so don’t try anything fancy. Follow best practices for SEO, but really, you have to be legitimately relevant if you hope to rank.
That’s why there aren’t really any marketing tactics that focus exclusively on search optimization. What does an SEO do all day? They research, write, design, pitch, edit, share and measure. These days, search optimization looks a lot like PR but with more data.
If it’s good for your marketing in general, it’s probably also good for your search rankings and vice versa. Branding, PR, social media and the actual experience of your visitors on your website are all ranking factors.
Ultimately, if you expect to rank high and earn search traffic, your goal should be to make the best page on the web for the topic.
Pro tip: If the topic is very competitive, go big and create an entire content hub on the topic. This means more articles, in more format, on more websites, created by more people.
Social media traffic
Like PR, social media marketing is based on human connections. Also like PR, social media can have big wins (viral content) and can be difficult to predict. Social media, like anything social, is somewhat chaotic. But if the goals are clear and activity is consistent and focused, social media can be a powerful source of traffic.
Traffic from social media often converts at a lower rate, since these visitors are less “targeted.” They’re likely coming from Facebook, Twitter or another social network, where they were browsing around, talking to friends and not necessarily looking for your product or service.
Social media traffic can also be difficult to measure, since visitors may have been using one of hundreds of different websites or apps. Analytics tools are getting better at tracking these social visitors, but it’s still imperfect.
And social media ROI is especially tough to quantify. Although you can use it to push out links to your website, broadcast-style, true social media experts create conversations, foster communities and earn superfans.
They get amazing results by using social media like a telephone. (Have you ever tried measuring the ROI of your phone? That would be silly.) Social media experts do the following:
Online Networking. Finding the right people and building strong connections, including influencers, journalists, thought leaders, job candidates, etc.
Engage in Dialogue. Exchanging ideas, asking questions, participating in Twitter chats, LinkedIn Groups, making friends in blog comments, etc.
Gather Positive Feedback from Customers. Discovering great content by giving a voice to brand champions, resulting in online reviews, case studies, recommendations, testimonials, etc. These can be used on the site to improve conversion rates.
Yes, social media directly affects ROI through traffic, and indirectly through content and connections. So measure the traffic, but also listen carefully for the hints of a broader ROI. The winners are the ones who make it part of their company culture and daily routine.
Our third source of traffic is another powerhouse. Email marketing is never the first touchpoint, so it doesn’t help awareness, but it’s the best way to invite people to come back. All serious content marketers send email.
Email is based on trust. A visitor must be very confident in the value of your content before they’ll give up their address. The amount of traffic you get from email depends on how well you earn, then honor, this trust.
The size of your list, what percentage of subscribers open it, and then what percentage of those people click through to your site are the main factors. Of course, deliverability is important too. If you're flagged as spam, nothing else matters!
List Growth. Building a list of happy, eager subscribers is step one. Take advantage of any opportunity to invite people to join. The best source of signups is the email subscription form on your site. Make sure it stands out and clearly says what they’ll get and how often.
Open Rates. The percentage of people who open the email is determined by the the sender name, the subject line and the timing of the email. For most industries, open rates below 10% are considered bad, above 20% are considered good.
The Email Itself. It should be tailored to your audience. Both tone and the quality of the content are important factors.
Just like social media, email marketing analytics are imperfect, but if the links in your email are tagged properly with Google URL Builder tracking code, you’ll be able to see all the activity of the subscribers who clicked.
You can see how the traffic sources can reinforce each other. Social sharing leads to relationships, which leads to links, which leads to referral visits and rank, which lead to visitors, which leads to subscribers, and so on.
So when you combine sources, they don’t just add to each other, they multiply. Staying diverse also helps keep traffic consistent. If one declines, you don’t have all your eggs in that basket.
The bottom line
To really calculate true website/web marketing ROI, you’ll need to factor in the cost of the website, the time spent marketing and the actual value of the business brought in by the site. Do the math anytime you’re evaluating your tactics, considering a new marketing partner or planning a redesign.
It all pivots on the first number in our equation: traffic. Three sources, nine factors and a clear understanding of how to get visitors to your website.
Andy Crestodina is the Strategic Director of Orbit Media, a web design company in Chicago. He’s also the author of "Content Chemistry, An Illustrated Guide to Content Marketing." You can find Andy on Twitter. His last article for SEMrush was "How to Find Host Blogs."