What is the value of ranking for this keyword?
is essentially asking –
How much money is one click from this keyword worth?
Value = Money
Today, we’ll learn how to place a monetary value on organic traffic, in order to better calculate the ‘ROI’ for ranking on Google.
We can find the value of ranking for a keyword on organic search (SEO) by calculating how much advertisers are paying for it on paid search (SEM).
Case Study: “Cheap Flights to Bali” Keyword
Let’s say we have a travel blog and write about flights to Bali. We would like to rank for a keyword like “cheap flights to bali”.
Google shows us 4 ad placements immediately –
These 4 companies, sg.trip.com, traveloka, cheapflights, agoda, are advertisers paying for Google Ads to show their listing at the top of the search results.
Looking at Google Keyword Planner, we see how much they are bidding for this keyword –
Keyword Suggested Bid
Google Keyword Planner’s suggested bid is the price Google recommends we pay per click if a visitor clicks on the ad.
Companies are willing to pay S$3.17 per click for this keyword to show up on Google.
This information tells us three things:
- “cheap flights to bali” has a value of $3.17 per click.
- 4 ad placements showing on Google search results indicate a strong commercial intent for this keyword
- due to the commercial intent of this keyword, we know that there is an opportunity for monetization
Keyword Avg. Monthly Searches
The average number of searches for this keyword. “cheap flights to bali” has an avg. monthly search volume of 40,500. This single keyword is being searched for over 40K times in a month on average.
Telling us –
- extremely high search demand for “cheap flights to bali”
- extremely high search traffic potential for this keyword and its close variants
Traffic Potential of Ranking in the First Page on Google
We can find out what is the traffic potential of ranking on the first page of Google by looking at CTR.
= Clicks / Impressions
On organic search, the results ranking in position #1-3 have the following CTR:
- Position #1: 30%
- Position #2: 15%
- Position #3: 10%.
So this means, 30% of people who see the result on position #1 will click through. The lower your position on the search result, the lower the CTR becomes. Hardly anyone these days click past the 2nd or 3rd result.
Knowing the avg. monthly search volume of a keyword, we can estimate the no. of clicks (traffic) based on CTR. With an avg. monthly search volume of 40,500, ranking in position #1 for “cheap flights to bali” can provide:
40,500 x 0.30 = 12,150 clicks
12,150 clicks! The website ranking in position #1 on Google organic search results (SEO) drives that much traffic organically.
Value of Ranking Position #1 on Google
Now, how much would it cost to get that much traffic through paid search (SEM)?
12,150 clicks x $3.17 = $38,515.50
That is how much companies would need to pay in advertising spend to gain the same amount of organic search traffic for this keyword search term.
In other words, that is the amount companies are saving by ranking in position #1 on Google for that keyword. The value of “cheap flights to bali” for ranking organically at the top of Google search is worth over $38K.
Woo! Anyone a fan of SEO yet?