Find the ROI of Gaining a Top Ranking Keyword
As far as objectives go within an SEO campaign, getting your keyword to rank well in the search engine results is of paramount importance. By gaining the top position on the first page of Google for your chosen keyword, you are going to see an increase in organic web traffic, which could mean more potential sales leads in the process. What can be very hard though, is estimating exactly how much web traffic or leads you are going to get from any given keyword.
Each individual keyword that you use to drive organic search traffic through to your website is going to offer varied results. There are many different factors that can have an effect on this and what we will go through here is some quick ways to get a rough estimate of the kind of return you can get for each of your keywords.
Conversion Rate
Understanding your website’s conversion rate is essential toward being able to understand any return on investment that you are going to get from SEO. This is calculated by the total website visitors divided by the amount of enquiries/sales made through the website. A good conversion rate would be around 2-3%, whereas on average, you would expect around 1-1.5%. This isn’t to say that you cannot achieve more than that, and we have seen with some of our clients that double-figure conversion rates are most-definitely achievable.
Keyword Searches
The next stage is to understand the kind of search volume that your chosen keyword will provide. Lets say, for example, that our keyword is ‘SEO’. By using Google’s free keyword tool you can see how many searches are made for any given keyword each month.
The search shows that there are 49,500 local searches each month for the term ‘SEO’. What we can now do is take a percentage of those total searches that we believed would be clicked-through if our website was the number one listing. Some leaked figures from AOL, back in 2007, showed that the top 3 listings on the first page get around 40% of the total click-throughs for any given search term. If we say that the top listing will equate to around 20%, then we can divide the total monthly searches by this figure, which would gives us 9,900 monthly visits. Not bad for one keyword, eh?
Estimated Return on Investment
Now that you know both your conversion rate (for our example, lets assume a conversion rate of 1%) and your estimated monthly traffic, we can calculate a rough return on investment.
Now we need to multiply the traffic estimate (9,900) by the conversion rate (1%), which gives us 99 monthly enquiries/sales. If you have an e-commerce website then what you can now do, is to multiply the estimated monthly sales from the keyword by your average order value. This will then give you your estimated monthly revenue from the chosen keyword, which will help you to just the potential ROI percentage.
Bear in mind that this is very much an estimate figure and shouldn’t be used as a definite value. This simply helps to give an outlook into the different results that you could expect from having SEO done for one keyword to another. Hopefully this will help to make your decision-making process a little easier.
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Matt, this is a cogent description of the estimating ROI from keyword volume. I would only add that one should use exact match mode in the Google Keyword Tool for a more accurate count. In fact, that is what you’re doing in the little screen grab, but I thought making it explicit was important.
Also, there’s the caveat that Google’s keyword tool is far more accurate as an indicator of relative search volume (i.e. comparing one keyword to another) than absolute counts. So take the result with a grain of salt.
Hi David,
Thanks for your comments.
Yes, you’re right, I should have made that a bit more clear that you need to do an ‘exact match’. I also agree with you when you say that you need to take the results with a pinch of salt, but this just gives a nice little starting point for further analysis to be carried out.
Matt.