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What a Top Google Search Ranking Means to Your Bottom Line: The Value of Search Engine Optimization

Posted on: July 14th, 2008 by Joe Giordano 1 Comment

Have you ever wondered just how much a top search engine ranking is worth to your business? Obviously a high Google ranking will get you a lot more traffic to your website without requiring you to pay a dime for clicks. Yet even still, most business owners are left to wonder if the results of running a search engine optimization campaign are worth the costs.

Today we are going to show you a simple process that you can use to determine how valuable a high Google ranking in a single keyword is to your business. Using this information you can see for yourself if an investment in a search engine optimization campaign is worthwhile or if you are better off with your money elsewhere.

We have chosen to use Google for this article because it makes up 60%-70% of the U.S. search market and will therefore be the most valuable source of traffic for your website.

How People Use Search Engines

Getting higher search engine rankings is all about getting more visitors to your website. Itís common sense that the more visitors you get, the more sales you make, and the more sales you make, the more money that ends up in your pocket.

According to several well documented studies, between 68% and 90% of people only click on results on the first page of Google. This means that pages that are not included on the first page are practically invisible to your average searcher. Being in 20th place or 200th hardly makes a difference because either way your website will be rarely seen by most searchers.

For some further insight into just how important high search rankings are we can look at some data that was accidentally leaked by AOL in 2006 about their usersí behaviors during 9,038,794 searches and 4,926,623 total clicks. The original article about the leaked AOL search data was written by Donna Fontenot.

Here is how those numbers work out:

AOL leaked data table

The released data also confirmed that most people click on a result in the first page of searches with 89.82% of search users never going past page one.

These findings are fascinating because they indicate not only how important it is to be on the first page of results, but also how much your ranking on the first page will affect your traffic. With a number one ranking getting 42% of all of the clicks for a keyword and a tenth ranking getting only 3% it is quite obvious where you should attempt to position your company.

Another interesting study that deals with the importance of being especially high in the rankings comes from Enquiro Researchís Eye Tracking Report. Using a special technology that tracks participantsí eye movements, researchers were able to understand exactly how users interact with search engines. Take a look at these pictures to see what the average user is looking at when using Google and its closest competitors.

Enquiro Researchís Eye Tracking Report

Notice the concentration of eye focus on the upper left hand side of the screen, particularly for Google. This seems to demonstrate that users click on the first result the most because that is where their eyes are focused.

We can continue to go through study after study but the results are all the same, being high in the rankings will provide you with far more visitors then youíve ever dreamed of.

Determining Visitor Data and Conversion Rates

Now that we know just how important getting a high Google search ranking is, itís time to figure out how much traffic you are already getting. Using this information we can determine how much more money you would make if your Google rankings were to rise.

The information we are aiming for here is:

  • Number of visitors to your website who are using the keyword you are interested in.
  • Percentage of visitors who buy something (also called a conversion rate).
  • The average value of each customer. This could be the return on investment for each online sale or, if you have it calculated, the lifetime value of customers to your business.

If you already have an established website, ranked by Google, with analytics to measure customer behavior then you should be able to get all of that information in just a few minutes. If not, donít worry, you still have a couple of options to choose from.

The first thing you will need to do is get the Google Analytics code added to your website. Itís completely free and more then worth its weight in gold for anyone looking to sell online. Google analytics will let you know exactly how many people visit your website, where they come from, what pages they look at, if they buy anything, and a whole lot more.

With analytics in place, you will want to get at least a thousand page views from your intended keyword so you can get a really good feel for what people do on your site. If your website is not currently getting enough traffic to get those 1,000 visitors then you might consider using Google AdWords to bid on your keywords and get conversion numbers that way.

If for whatever reason you do not want to or are unable to get the information we are after that way, you can also choose to use a free tool offered by Google.

The Google Keyword Tool has recently been updated to provide estimates of how many searches are performed for each term on a given month. Enter in the keyword you are interested in and not only will you be given suggestions for other phrases you might want to target but you will also see last monthís search volume for your keyword as well as the average volume for the year.

Google Keyword Tool

With search data acquired, letís take another look at the AOL search results to see how you can easily determine the increased traffic you can get for any ranking on the first page.

AOL search data table

We know that the first ranking will get approximately 421,300 hits each month (1,000,000 x .4213) because with 1,000,000 searches for the keyword Kitten, our AOL data tells us that 42.13% will click the first result. You can go on to do the same calculation for the rest of the rankings if you would like.

Examine this table with the number of clicks that each ranking for the word Kittens should receive each month:

Clicks by ranking table

Unfortunately there is currently no easy way to determine your conversion rate or average value of a visitor without past history. If your business is already established outside of the web then you likely already know the average lifetime value of your customer. In terms of conversion rates, each business is entirely different and so there is no average rate. Where some companies might be overwhelmed with a 3% rate, others need 30% to really get them going.

The only real way to quickly test conversion rates is by using Google AdWords and bidding on the keyword you are looking at. This way you can a decent amount of traffic fairly quickly to determine where your conversion rates are at. Remember a conversion rate is simply the number of sales per one hundred unique visitors.

Doing the Math to Find the Value of Google Search Rankings

Letís take a conservative approach for our Kittens example and assume that our average conversion rate is 5% and the average value of a customer is $50. That means that for every 100 visitors to our website, 5 of them will make a purchase with an average price of $50.

That means that if we were to be ranked first in organic searches on Google then we could expect 21,065 (421,300 x .05) additional sales each month and $1,053,250 (21,065 x $50) in increased sales revenue!

If we were to rank in fifth place instead of first we could expect revenues of $123,000 every month. Thatís a huge difference from being ranked first but it is still quite good.

You can do this same comparison for any keyword but remember that since there are a lot of variables involved for each specific keyword that the results will not always be entirely accurate. These estimates are meant to be a guide to what you could achieve with high search engine rankings, not a crystal ball.

If you are already ranked highly on Google and want to know how much more you will make if you climb even higher in the rankings, these results will be much more accurate thanks to the data you should already have collected.

For example, letís say that you sell paper airplanes and are currently ranked 4th for the keyword ďpaper airplane.Ē You currently get 1,000 clicks a month from that keyword and make $500 each month from those 1,000 clicks. This means that you are making $0.50 for every click Google sends your way.

If you wanted to know what would happen if you went from 4th rank to 1st all you would need to do is look back at those AOL clicks. A 4th ranking gets 6.9 times less clicks then 1st so that means you can estimate that the person in 1st is getting 6,900 clicks each month. Since you make $0.50 a click your revenues will go from $500 all the way up $3,450 a month for that single keyword!

Hopefully this guide has helped encourage you to fight for top search rankings in Google. I encourage you to look at the keywords you would like to compete for, generally between 10 and 20, and determine how much you can make with a top ranking in each. Looking at your own results, you should realize that investing in search engine optimization and link building can bring huge profits to your business and give you a big edge over your competitors.

Are you interested in getting high natural search rankings for your business? Contact RSS Ray today to find out what you can do to rank highly on the key search terms for your website.

- By Dale Knauss, Show Producer for Online Marketing with RSS Ray

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One Response

  1. Great article…thanks for it.

    Trying to obtain information regarding the most popular vertical markets. Any direction you can send me in?

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