Skip to main content

Translation Industry Blog

Gain in-depth knowledge and perspective on various aspects and topics of translation and translation industry

Localization ROI

In this article, we will outline some of the best practices on how to convince your stakeholders to invest in localization, track localization ROI and further increase ROI in the near future.

Localization Return on Investment (ROI)

Localization ROI: Achieve high ROI from Localization

In the modern-day environment, many companies leverage translation and localization, which allows them to enter new markets and gain new clients. But when it comes to numbers, some stakeholders may ask whether it’s worth the cost, and whether to even bother at all.

A brief definition of Localization, more on it in our article, is the following:

What is Localization? – Localization can be defined as the linguistic adaptation of content for a target region and its languages and cultural particularities, in order to make it appropriate, easily understandable and comfortable to use for speakers of the local native language.

Localization is universal and can be applied to practically any industry, product or service. It's what and how you localize that matters.

In this article, we will outline some of the best practices on how to convince your stakeholders to invest in localization, track localization ROI and further increase ROI in the near future.

Convincing stakeholders to invest in Localization

In our increasingly diverse world, where trade is forever globalized and communication between users located across the globe is instant, the ability to reach them and speak to them directly in a manner that is the most understandable, via their native language, is continuously gaining value.

An example of this can be seen in a recent research conducted by Common Sense Advisory (CSA), where over a period of time a group of Fortune 500 companies that have increased their spending on localization have been monitored for results of such investment. Was it successful? The short answer is “Yes”. In fact, it was very successful.

The analysis included a set of metrics – their rate of market expansion, the number of languages they deliver, content volumes, and translation budget fluctuation.

Key research findings:

  • Businesses that started localizing were 1.5 times more likely to report a total revenue increase.

  • 75% of businesses have established their presence on brand-new markets as a result of Localization.

  • Businesses that localized their content were 2.5 times more likely to experience year-on-year profit growth, and 1.8 times more likely to experience revenue growth.

  • For businesses that localized information designed for communication with clients and partners, a revenue increase was 2.67 times more likely and profit growth was 2.6 times more likely.

  • Companies that invested in translation in order to gain an advantage over their competitors were 2.04 times more likely to see an increase in profits, meanwhile they were 1.27 times more likely to generate augmented earnings per share (EPS).

Localization and the Web

The World Wide Web continues to grow at a steady pace, and businesses from across the globe utilize it to the full extent.

Internet World Stats has recently produced a report that outlines the vast expanse of the modern worldwide web and its coverage.

Top ten languages used in the web – 30 April 2019 (number of Internet users by language)
TOP 10 LANGUAGES ON THE INTERNET World population for this language (2019 estimate) Internet users by language Internet penetration (% population) Internet user growth (2000 - 2019) Internet users % of world (participation)
English 1,485,300,217 1,105,919,154 74.5% 685.7% 25.2%
Chinese 1,457,821,239 863,230,794 59.2% 2,572.3% 19.3%
Spanish 520,777,464 344,448,932 66.1% 1,425.8% 7.9%
Arabic 444,016,517 226,595,470 51.0% 8,917.3% 5.2%
Portuguese 289,923,583 171,583,004 59.2% 2,164.8% 3.9%
Indonesian/Malaysian 302,430,273 169,685,798 56.1% 2,861.4% 3.9%
French 422,308,112 144,695,288 34.3% 1,106.0% 3.3%
Japanese 126,854,745 118,626,672 93.5% 152.0% 2.7%
Russian 143,895,551 109,552,842 76.1% 3,434.0% 2.5%
German 97,025,201 92,304,792 95.1% 235.4% 2.1%
TOP 10 LANGUAGES 5,193,327,701 3,346,642,747 64.4% 1,123.0% 76.3%
Rest of the Languages 2,522,895,508 1,039,842,794 41.2% 1,090.4% 23.7%
WORLD TOTAL 7,716,223,209 4,386,485,541 56.8% 1,115.1% 100.0%

With an ever-increasing demand for the internet, the ability to communicate with clients in their native language is a solid approach to growing revenue and increasing profits. One of the key steps on any client's journey across the web in finding your product or service is a website.

In her recent comment on internet purchases, senior analyst at Common Sense Advisory, Rebecca Ray stated:

"Our previous research has confirmed that people won’t buy on the web if they can’t understand a company’s website."

Rebecca Ray

Recently AD VERBUM conducted research of our own on The Importance of Website Localization. The research included 3000 non-native English speakers from across the globe with varying levels of English language proficiency. The results of the research have demonstrated that the audience will always prefer to make a purchase on a website that is available in their native language.

In addition, in our recent article on the SEO (Search Engine Optimization) Benefits of Website Localization, we have concluded that SEO and Website Localization go hand in hand. They provide direct access to streams of new traffic sources for your website’s new language version, but also for your original website version by means of an increase of the authority of the website. Google really likes it when user experience increases and rewards website owners with higher rankings, of which website localization is a major ranking factor in the modern web.

Best Practices in Tracking Localization Return on Investment (ROI)

Tracking localization is not as hard as you may imagine at first glance. By following the common practices below you can rest assured that your Localization process will be transparent and fully trackable.

Understanding the cost of Localization

The cost has to be taken into the account at every stage and is one of the core aspects of localization ROI. Localization cost will always vary depending on several factors:

  • Prices and quality will significantly vary depending on who does the localization for you – an in-house team, freelancers, machine translation, professional language service providers (LSP) or your bilingual cousin Joe.
    It is essential to set realistic expectations and goals in relation to pricing. Quality has a cost related to it, but also a plethora of benefits.

  • The type of content you wish to localize. Some types of content are naturally more expensive to translate than others.
    For example, medical content is significantly more expensive to translate in comparison to generic text, meanwhile marketing content may require even more research as it is not only the terminology that is important, but also the content and a writing style that takes into account the specific characteristics of the target market.

  • The market you aim for – some countries may have only 1 core language, meanwhile, others may have a whole set of languages that are common to the local population, which will require an extra effort and cost to fully cover.

  • Timeframes can be a challenge of their own; quality takes time and rushed localization can be a major disadvantage in the end, as sufficient time-consuming research implemented won’t be conducted, resulting in a negative effect.

  • The number of languages involved – some languages are more expensive than others due to the availability of linguists for set languages, the cost of living in countries they reside and the general availability of subject matter experts on the subject of your content.

Nevertheless, if approached correctly, cost can be always optimized and decreased, meanwhile sustaining or even significantly improving the quality. You can find more information on this in our 10 Tips to Reduce Translation Costs article.

Correctly tracking the revenue of Localization

Tracking revenue generated by Localization is not as difficult as it may sound. Even though it will be highly dependent on your product/service/work model, there are several common key performance indicators (KPI) that can be assigned to various metrics around your organization in order to create clear and, most importantly, trackable statistical data.

Some of the most common KPI for tracking your Localization ROI:

  • Website traffic – by seeing sudden spikes (or most commonly – a steady increase) in activity from a certain region into the language of which your content has been localized, which can be safely attributed to Localization.

  • SEO improvement – is your organic traffic steadily growing in a certain region and the number of visits has skyrocketed? This is due to the fact that search engines have exposed your website to a whole new audience thanks to Localization.

  • Market share – similarly to traffic, an increase in a region that matches a recently localized language can be safely attributed to Localization.

  • Conversion rates – does your website suddenly covert more users from a certain region? Yup, that’s localization.

  • Social media engagement – if your social media engagement has increased since the implementation of localized content, this is a clear sign of successful localization.

  • Website session length – website session length is a popular metric that demonstrates how much time your visitors spend on your website. The longer the better, as this metric influences more than just the likelihood of visitor turning into a customer or a lead. Website session length is one of the most reliable key SEO metrics, which sends a signal to a search engine that a user who has arrived onto a website has found content relevant to their search query, thus boosting the overall SEO value of the platform.

  • Lead generation – lead generation is one of the key aspects of any modern business, as a lead is one step from a loyal customer. Sudden spikes in lead generation post-localization, especially attributed to a certain region, are likely to be related to your recent localization efforts.

  • A decrease in bounce rate – one of the key web metrics also related to your website session length is the bounce rate. The bounce rate represents a single page session length on your website. A website with short sessions and high bounce rates sends a signal to search engines that content present on the website is not relevant to a user's search query, hence the reason the user leaves the website. These factors are harmful to websites' SEO.

    One example of this phenomenon can be content that is not present in the user’s native language; the user can’t understand the content and leaves the website. Localization can fully fix such issues and significantly decrease the bounce rate.

Correctly implemented KPI tracking for your Localization efforts can result in a treasure trove of relevant analytical information for your company.

It can assist in both helping you with optimization on the support of currently existing localizations, and influence the addition of new ones.

Increase ROI from Localization

Once you have invested in Localization or are considering doing so, there are several methods that can be used to further optimize your investment and get more for your money. Below we list some popular methods of increasing your Localization ROI.

Translation Budget

When preparing for localization, budgeting done with a high degree of accuracy may be the key winning factor in getting the stakeholder approval for the localization project. Generally speaking, there are two key elements that go into the calculation of a total cost – number of source words + cost per word. But wait, there's more.

Cost per word can significantly vary depending on several factors, such as source and target language, level of quality you expect to receive and complexity of the source content.

However, knowing two of those alone won't give you a clear overall picture. There's significantly more that goes into the overall price calculation. A very basic quality translation by a non-expert can be as low as $0.05 per word, growing all the way up to over $0.20 for a subject matter expert. And that is not the limit, some experts for a very complex topic (for example, medical or scientific texts) may cost double or even triple of that.

A basic formula for calculating the localization launch budget is the following:

Launch budget = ((number of unique source words x cost per word) -% of repetitions) x number of languages)

  • Number of unique source words – this value involves the number of non-repeating unique words within your source content.

  • Cost per word – cost per unique source word.

  • % of repetitions – the extent of repeated source content expressed as a percentage of the total amount of content.

  • Number of languages – the number of languages you are planning to localize your source content into.

Combining the elements of the formula above should give you a rough idea about what to expect in terms of cost.

Higher quality Localization – save on unexpected costs in the long-term

There are plenty of historical examples of bad translations that cost millions to companies and cause brand damage, but generally higher quality translation will save you from issues such as:

  • Delays in the launch of your website, campaign, product or service

  • Time spent finding the issues within your content and correcting them

  • Fines related to incorrect translations (cost of litigation)

  • Loss of credibility and misunderstanding with your partners

  • Cultural issues

  • Misinformed decisions affecting your business

A good recommendation is not to skimp on Localization, as both in the short-term and long-term, it can save you a lot of money on unforeseen expenses.

Working with a Language Service Provider

A Language Service Provider (LSP) is a company that offers expert language-related services, such as:

A very quality oriented LSP will follow strict ISO regulations and fully utilize a process called TEP (Translation, Editing, Proofreading), resulting in high quality and a decrease in costs for their client both in the short term and long term due to use of Translation Technologies such as a Translation Memory.

A Translation Memory alone can decrease the cost of a localization project on average from 40% to 70% and in some cases even above 90%, resulting in considerable savings for the client.

The Bottom Line

Localization is a highly effective tool for reaching a new audience and delivering your company’s message to them. However, when you add a modern business environment into the mix, where every penny counts, the financial decision is made by stakeholders, and a properly constructed ROI strategy is the key to both internal and external success.

By thoroughly researching the target markets beforehand and creating a thorough localization plan involving measurable KPI’s that will provide extensive information to key stakeholders in your company, not only you will be able to convince them of your localization plans, but you will also be able to accurately measure your efforts, deliver reports and find ways to further optimize your efforts and budget.

Start Translating Today

References:  Translation And Localization - What's The Difference - Translation Company - AD VERBUM. [online] Available at: Why Website Localization Is Important - Translation Company - AD VERBUM. [online] Available at: Top Ten Internet Languages In The World - Internet Statistics. [online] Available at:

Releases, P., Fortune 500 Companies That Invest In Translation Report Higher Revenue. [online] CSA Research. Available at:

Visnevsky, F. Why You Should Translate | AD VERBUM. [online] Available at:

Visnevsky, F. 6 SEO Benefits Of Website Localization - Translation Company - AD VERBUM. [online] Available at:

Visnevsky, F. 10 Tips To Reduce Translation Costs - AD VERBUM. [online] Available at:

ISO 17100:2015

Translation service quality certified company.

ISO 9001:2015

Quality management system certified company.

ISO 27001:2013

Information security standard certified company.

ISO 18587:2017

Machine translation output post-editing quality certified company.

Subscribe to our Newsletter
2027 National Development Plan Latvia

On 28.03.2024 AD VERBUM Ltd. signed an agreement No 17.1-1-L-2024//180 with the Investment and Development Agency of Latvia on receiving support for export assistance under the project “SME Innovative Business Development” co-financed by the European Regional Development Fund.