Everything You Need To Know About The ROI of Link Building

roi of link building

Inbound and outbound links are a crucial part of search engine optimization. While Google continues to prioritize content over links, a healthy amount of active links is a clear indicator that your website is valuable, authoritative, and relevant.

Despite countless changes to Google’s algorithm over the past few years, link building still remains an extremely important part of the SEO process. Links not only drive new visitors to your site, but they also serve as an endorsement, indicating that your website is a quality resource that is worth linking to and visiting.

Websites with good link profiles tend to rank higher than others. But how do we know that our links are actually helping our SEO? Keep reading to find out more about why link building is important and to learn how to calculate the return on investment (ROI) of your links.

Why Is Building Links so Important for SEO?

The importance of obtaining high-quality backlinks has never been higher. Links are an extremely important part of how Google determines the quality of a website and where to rank it. Webmasters can directly boost their page ranking by increasing the number of links pointing to their site from other high-quality and high-authority websites (backlinks).

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By linking to your site, other websites are effectively vouching for your content, indicating to visitors that it is indeed worth viewing. Gaining a backlink from a high-authority website is like having them share some of that authority with you, resulting in an SEO boost.

In the early days of Google, the platform depended on a link counting metric called ‘PageRank’ to determine the authority and ranking of a page.

Over time, many link building strategies were developed in order to manipulate Google’s results. This caused Google to change how their algorithm weighs links, now prioritizing link quality over link quantity. In the world of modern SEO, obtaining links from authoritative and influential websites that dominate their niche is the best way to quickly build link value on a page.

If you’re committed to pushing your website up Google’s rankings, then obtaining high-quality backlinks is a must. Just don’t resort to black-hat techniques.

Can You Accurately Calculate the ROI of a Link Building Campaign?

While we may not be able to precisely calculate the results of our link building efforts, we can still get a general idea of how much they may be helping our overall SEO.

In reality, all we can really calculate is an estimate. Yet, when every marketing dollar matters, calculating the ROI of a link building campaign can still be a worthwhile exercise. (Though those expecting exact results may be disappointed.)

Why Is Tracking the ROI of Links so Difficult?

Opinions are divided over whether it is possible to accurately calculate the ROI of a link building campaign. There are many reasons why this kind of ROI can be difficult to track.

First of all, there’s no single metric that can specifically measure the effectiveness of links. There is just no way to isolate links from the jumble of other SEO signals that go into determining a page’s ranking and overall SEO health. There are many on-page and off-page SEO signals making noise at the same time which makes isolating the contribution of links incredibly difficult.

This leaves us working with various metrics and strategies that may be more indicative of overall SEO performance, rather than the isolated effectiveness of our link building campaign.

For instance, using page ranking or total traffic to evaluate links can be incredibly misleading. A sudden boost in page rank could be attributed to any number of SEO tactics or signals, including changes made by Google itself. Additionally, how can you tell that a sudden boost in traffic is due to the work of the link builder and not the content creator?

To further complicate things, there is no way to know for certain whether a link building tactic will continue to work in the long-run. The spammy link building strategy that may be boosting your SEO in the short-run could eventually plateau, providing diminishing returns. So even if we are able to accurately calculate our short-term ROI, it is impossible to know whether it will remain consistent in the long run.

Crunching the Numbers in the Short-Run

Thankfully, data analysis tools like Google Analytics allow us to at least try to make sense of the various SEO signals on our website.

Google Analytics

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Google Analytics features a comprehensive suite of analytical tools that can give you an in-depth look under the hood of your SEO campaign. The Google Analytics platform gives us access to all kinds of metrics that can help you to gain a better understanding of how visitors use your site.

Keeping track of unique visitors may be one of the most accurate ways of measuring the ROI of links. By using Google Analytics, we can determine the past value of each unique organic visitor and use that information to estimate the value of each new visitor that follows a link.

By adding it all up, we can estimate what a link may actually be worth in dollars and then subtract the cost of building that link in order to determine our total return on investment.

Others prefer to make a similar calculation using the lifetime value of a customer and the total search volume of your primary keywords. For instance, if a search term has 5,000 queries per month with an organic click-through rate of 5%, we can add up our total expected traffic and costs, and then subtract it from the total lifetime value of each new conversion or customer.

Of course, there are many other metrics that may be useful to us when evaluating links. Metrics like page views, pages per visit, and bounce rate, can give us an indication of not just how many people are following our links, but also of what specific actions they are taking after they click through.

Social Media

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Another way of calculating the ROI of links is by tracking social media activity.

Because of a lack of control over how and where people share your content, using social media to track the ROI of links can be tricky. With so many different social media channels that allow individuals to share links and opinions, it can be hard to keep track of everything.

Nevertheless, social media results can still give us a good idea of how well our link strategy is working.

If you can determine the average value of each social media visitor and how much organic traffic each social media link generates, you can get an idea of just how valuable each link really is. To determine the ROI of your social media links, simply compare their estimated revenue to their cost to produce.

Be sure to check out HootSuite’s social media ROI guide for more information on calculating returns on social media content.

Measuring Link Building ROI in the Long Run

Tracking the ROI of your links can be even harder in the long run, especially if you rank near the top. Because of this, marketers prefer to look at broader, more general metrics when evaluating the long-term ROI of links.

Ahref’s Domain Authority is a metric that can give us an excellent idea of how your site measures up against others. By comparing our site’s DA score to that of competing sites, we can see how much progress you’ve made since your link building campaign began and how much this has influenced our ranking vis-a-vis our competitors.

Final Thoughts

While it can be hard to get a handle on the exact value of a link, there’s no doubt that inbound and outbound links are crucial to SEO success. Calculating the ROI of your links can help you identify what works and what doesn’t. With a bit of creativity and outside-the-box thinking, your dispensary’s marketing team can piece together a link strategy that boosts brand awareness, drives traffic, and generates sales, all at the same time.

Link building is a crucial part of a robust dispensary SEO strategy. To learn more about how to use this technique to your advantage, give us a call at 650-822-7506 or check out our recent SEO webinar.