How To Measure the Value of Your Backlinks: Everything to Know
Link building in SEO is like being rich and starting a company.
Sure, you can set up a company without having a lot of money. But being rich can really help you grow your startup fast with the help of money and connections.
In the same vein, yes, you can do SEO without link building. But it will take forever since links are one of the top two elements that will help you rank in Google's algorithm.
Calculating the return on investment for link building is a natural next step. Don't worry: you're not alone: many SaaS leaders struggle with ways to measure its effectiveness.
The SaaS business is a fast-moving industry, and you need cold, hard numbers to calculate a myriad of other metrics to keep your company afloat. We get it.
In this guide, you'll get actionable answers on how to measure the ROI of your link building campaign. No more guesswork, no more estimations. You'll walk away with five techniques to measure the value of your link building efforts (plus a calculator to do the hard part for you).
Why should you measure the value of link building?
Before you jump into wild formulas, you need to understand the general value of your link building and how it fits in your digital marketing strategy.
Smart link building is a great digital marketing investment, as it can:
- Boost your organic website traffic
- Improve your Search Engine Results Pages (SERP) performance
- Increase the ROI of your content marketing
- Build your website's credibility
- Improve your brand's media presence
- Drive your social media performance
Of course, we said “good link building” for a reason. Not all link building is the same, and bad link building can harm your business and your bottom line.
Here's an example. Let's say you have been paying $500 per month to someone on Fiverr to bring you backlinks. You seem to be getting more organic traffic month after month, so you continue to pay for the service. After a while, you realize that the increase was due to spam-heavy traffic from dubious websites.
You are not only out of a few hundred (thousand?) dollars, but now also have to cut into other budgets and allocate resources. It’ll cost you time and money to clean up your domain rating, disavow links, and promise Google that you'll be good.
This is why knowing the value of link building and how to calculate its ROI is so crucial. Taking a glance at organic traffic numbers every now and then is not enough. You really need to look under the hood and set up an ROI template that will guide your business decisions on a long-term basis.
In the next sections, we'll give you everything you need to calculate your link building ROI and understand the true value of link building.
Here's the thing: if you want more sales, you'll need more website traffic. For that, you'll need to rank high, as Google's click rate is:
- 28.5% for the first result
- 15.7% for the second result
- 11% for the third result
To improve your SERP results, you'll need to grow your Domain Ranking (DR) score. And to that (I promise we're nearly there!), you need to get more backlinks.
According to research on 11.8 million Google search results from Backlinkio, a website's DR is directly correlated with higher SERP rankings.
Backlinks also correlate strongly with the amount of organic traffic a website gets. For example, research on 100,000 top websites from Similarweb shows an 80% correlation between referring domains and organic traffic. Referring domains are exactly what they sound like: the website that hosts your backlink.
But as we mentioned before, not all backlinks are equal. That's why you need to understand the value of each of your backlinks individually to assess your backlinks' ROI.
Of course, there is no 100% foolproof and accurate way to calculate the exact value of each backlink. Many factors influence a backlink's performance, some of which could only be revealed by obtaining trade secrets from a RankBrain insider at Google.
Nevertheless, analyzing the value of your links so you can prioritize building high-quality ones is crucial.
According to our case studies, quality backlink growth leads to more organic traffic. If we take data from three of our case studies, we see that our link building work in December 2020 alone resulted in:
- Average domain rating growth of 15%
- Average organic traffic growth of 1068%
- Average referring domain growth of 123%
Read our case studies for more information.
Growing your organic traffic is vital in growing revenue. Let us demonstrate with an example.
The average website conversion rate falls between 1% and 3%, so let's say yours is 2%. If you get 100,000 page clicks a month, you will make roughly 2,000 purchases. If you increase your organic traffic by just 15%, you will get 115,000 page clicks and 2,300 purchases.
If you make an average profit of $12 per customer, that's a monthly profit increase of $3,600. Annually, that's $43,200 more in revenue, just from boosting your traffic with link building.
How the calculation works
So that we're on the same page, here's a quick breakdown of how we recommend going about calculating your link value.
Calculate your ROI with two key figures:
- How much you invested (your “cost”)
- What you got out of it (your “benefit”)
Image Source: Corporate Finance Institute
The “benefit” in your ROI calculation will depend on your goal. For example, if your goal were to increase your DA, your “benefit” would be each new DA point. So, if you invested $5,000 and your DA jumped 5 points, your ROI would be $1,000 per DA point.
How to improve your backlinks (and therefore your ROI)
Now you know how to calculate your backlink ROI. But how can you increase the value of your backlinks?
Here are five techniques to try.
#1. Look into the referring domain
Let's start by assessing the domain quality of each backlink. There are two ways we assess the quality of a domain:
- Domain Rating (DR): a metric that measures the value of a domain's backlinks
- Domain Authority (DA): a metric that predicts how well the website ranks on search engines like Google, Bing, and Yahoo
We measure DR and DA on a scale of 1 to 100, where “1” is the lowest, and “100” is the highest.
To truly analyze your backlinks, you'll need to look at both metrics. You can find the DR for each of your backlinks using a tool like Ahrefs' “Website Authority Checker.” You can calculate the DA of each domain using Moz's “Domain Analysis Tool.”
Pro-tip: You can directly export your backlinks from Ahrefs and Moz with DR filters and the date. This can help you better visualize your data.
Once you understand the DA and DR of your backlinks, you can nurture relationships with high-ranking websites to get more high-quality links. For example, if your backlink profile has a majority from low-quality domains, it’s time to switch up your strategy and get one from a high-quality site.
Keep in mind that even 1 relevant link from a high-quality domain can beat 1,000 links from lower-quality, spam domains any day. Having a healthy mix of domains is good for your strategy.
Paying attention to Domain Rating and Domain Authority when link-building will help you work smarter and get better results.
#2. Look into the page with the backlink
DR and DA are very useful metrics, but they don't tell you everything about the value of a backlink.
As people will only click on your link if the article performs well, you'll need to assess its Search Engine Optimization (SEO) score. The better an article's SEO score, the higher it's likely to rank in search engine results.
To assess a webpage's SEO score, read it carefully and find its primary keyword. The primary keyword is the term the article intends to rank for. You can usually find it in the article's title, introduction, and throughout the article.
Then, use a SEO tool like Clearscope, MarketMuse, or SurferSEO to see how well the article performs against the primary keyword.
There are several ways you can improve the SEO score of an article, so let's go with the easiest: ask the publisher if you can optimize the article. Download the article's contents and get a professional copywriter to optimize it. Then, work with the publisher until you have a finished article that you're both happy with.
Alternatively, you could submit extra (SEO optimized) content to the publisher for them to include.
#3. Examine the strength of your anchor texts
In the previous section, we touched on the importance of contextual keywords in your backlink's host articles. But keywords aren't just important for an article's SEO score – they're essential for good anchor text, too.
Anchor text is the words and characters that anchor the link to the host article. For example, in the phrase “check out this article on 2-tier link building,” the phrase “2-tier link building” is the anchor text.
Good anchor text is crucial for two primary reasons:
- Anchor text influences how likely the reader is to click on the link
- Anchor text tells each search engine what the link contains
Well-placed anchor text can drive traffic to the link and boost the link's ranking in search engine results, while badly-placed anchor text makes the link look unnatural and spammy.
To assess the quality of your backlink's anchors, you'll want to look for a few markers of good anchor text:
- It fits naturally within the sentence (i.e., “flowchart software can help you make web-like maps” vs. “flowchart software can help you make web-like maps”)
- It uses relevant keywords
- It is at least 1 – 2 sentences from other links
- It contains 2 – 6 words
- It contains an actionable word that inspires the reader to take action
Once you've assessed the quality of the anchor, try to think of a more effective anchor and ask the publisher to change the anchor text.
#4. Ensure the relevancy and intent of the page referred to
A backlink from a website with a domain ranking may not be as effective if your link doesn't relate to the article.
You need to think like Google to understand why. When Google delivers results to a user, they look to provide highly relevant results from trustworthy sources. Google scours websites for content, keywords, and links that align with the user's search query to deliver these results.
If Google's crawlers find an article with seemingly unrelated links, they will assume that the content is not valuable for the user and prioritize another article instead.
So how can you assess the relevance of your backlink's host page? Check if:
- The page's primary and secondary keywords relate to your link
- Your link provides value to the reader that will deepen their understanding of the page's topic
- The page's intent aligns with the content (for example, the article “Grammarly vs. Writer.com” should cover each software's pros, cons, pricing, and everything someone would need to know to use each tool).
If you notice that the article hosting your link doesn't relate to your link, consider creating additional content for the publisher to help the link fit naturally. While this won't work 100% of the time, many publishers are happy to publish free content (provided its good quality).
#5. Monitor your website performance
Monitoring your website performance can help you understand how new backlinks influence your website. There are many metrics we recommend for this (aside from watching your DA and DR).
- Referral traffic and referring domains
Your referral traffic is the views you receive from your backlinks, while your referring domain is the number of websites that link to you.
We used referring domains to measure link building ROI in several of our clients. In the fifteen months we worked with an Ecommerce mattress company, we increased their referring domains from 3,879 to 11,261.
- Measuring marketing assets growth
Your marketing assets include promotional materials for your brand, products, or services. To measure growth in these assets, you might look at:
- Your social media metrics (like followers, comments, likes, shares, etc.)
- Your email marketing metrics (like email sign-ups)
- Audience metrics from videos, podcasts, and webinars
This also includes your Click-Through Rate (CTR) and Customer Conversion Rate (CCR).
- SEO results for targeted pages
Your SEO results include metrics like your organic traffic and your organic keywords.
We used these metrics to measure our clients' success in our AI tool company case study. In the six months we worked with them, we increased their organic traffic by 2,772% and their organic keywords from 5,086 to 17,778.
- Google Analytics metrics
Your Google Analytics metrics include figures Google tracks for you, including:
- Website sessions
- Unique website viewers
- The average time each viewer spends on your page
- Bounce rate (the percentage of viewers who leave without viewing another page in your domain)
- Exit rate per page
Monitoring your performance will help you hone your link-building efforts. If your performance improves, your links are likely working. However, if your performance remains stagnant or worsens, you may need to re-examine your link-building strategy.
What calculating your link building ROI will tell you
If looking at the ROI of link building tells you anything, it's that not all backlinks are created equal. If your backlink has a low value rating and comes from a website with a low DA/ DR score, it likely won't deliver you the results you need.
So what should you do instead? There are three key takeaways here:
- Investing in high-quality backlinks will grow your organic traffic, and growing organic traffic leads to revenue growth
- You need to assess the value of your backlinks holistically (including looking at the link's anchor text, contextual relevance, and the SEO score of the link's host article)
- Choose a backlink provider based on the ROI they offer you
Confused about where to start? We can help you out. Connect with us today!