When it comes to predicting results, Search Engine Optimization campaigns are notoriously hard to pin down. You know you want to rank #1 for your favorite keyword. But how much real revenue can you expect from that ranking? And how much time and money is it worth putting in?
With some quick calculations on the eBoost Keyword Analysis Tool and then some simple math, you can easily calculate the expected ROI of any keyword.
The Keyword Analysis tool takes the Search Volume of a keyword, the Conversion Rate of your website, and the Revenue you make per conversion then applies the Click Through Rate (CTR) you can expect by ranking in Position 1–10 in Google. The CTR for each position is a general industry number based on the famous AOL click data.
The tool then instantly spits out the estimated revenue you can expect from that ranking based on how your specific website performs.
Step 1: In the Keyword Analysis Tool, enter Monthly Search Volume for your keyword (you can use the Adwords Keyword Tool to find this number).
Step 2: Enter the Conversion Rate (%) and Revenue per Conversion ($). You can use your Analytics package to find general site averages, general organic traffic averages, or even specific numbers from the keyword if the information is available.
Step 3: Take the monthly revenue number from your target position in Google (the result from the Keyword Analysis Tool) and subtract the amount of money you currently make per month from that keyword.
Step 4: Calculate ROI over a specific time-frame by multiplying that number by 6 (months), 12, 24 etc. and then dividing by the amount of money you plan to spend on SEO to achieve that ranking. Remember to include your time and grant yourself a reasonable $/hour. Also remember that SEO is a long-term strategy that will often continue to bear fruit long after your campaign is over. So make sure to keep that in mind when calculating ROI as well.
This will still of course be a rough estimate with many variables. But it’s a great way to apply a little math and science to an equation that is too often completely misrepresented or not even calculated at all. Using this process is a great way to set realistic benchmarks by which you can evaluate your SEO campaign on an ongoing basis.
- Evan LaGasse, Consultant, eBoost Consulting
A small niche apparel product company selling ~$15-$20 items online was looking to grow after sales plateaued after several years in business. The products were high quality and consistently garnered 5 star reviews from customers, but sales weren’t growing as fast as the owner would have liked.
The products were high quality and well-priced, but the market was relatively small and sales were not growing. The company had done extensive tests with all major advertising platforms in the past but could not get any of them to produce a positive return on ad spend resulting in significant sales volume.
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