Discover the true value of securing position 1 on Google, and how it can boost your visibility, traffic, and conversions to give you a competitive advantage.
Danni Jessen
There are 3,800,000 searches made on Google every minute! That translates to a staggering 1,997,280,000,000 searches per year! While this is, of course, the total number of searches worldwide, it still indicates that you have the potential to reach a huge audience by ranking number 1 for the keywords that matter to your business – even if it is a niche keyword.
In this blog post, I will explain how you can calculate the value of ranking number 1 on Google for a specific keyword. This will help you make an informed decision about whether you should focus your SEO efforts on that particular keyword.
In this post, I will cover:
Data enables you to optimise your efforts more effectively – especially if it is data specific to your industry, business, or target audience. With a bit of technical know-how, you can quickly set up your own calculations, which can help you understand, for example, how your Click-Through Rate (CTR) will increase with each position you climb, or how many orders you can expect by ranking number 1 for a keyword. If you are not familiar with the term CTR (Click-Through Rate), it refers to the percentage of people who actually click on your search results.
The old-fashioned approach to keyword analysis, relying only on external data such as general search volume, is outdated – by using data specific to your business, you can much better assess which keywords are worth investing in.
The most important element for calculating the potential value of your keyword is, of course, your own data! By using your own data, you can calculate parameters such as Click-Through Rate (CTR), expected number of orders, and more. Using your data rather than general data ensures that your calculations are as accurate as possible for your sector.
Throughout this article, I will cover the formulas you can use, and how to visualise them.
At WeMarket, we use Power BI, which is a market-leading tool for processing and visualising data. With Power BI, we can easily process large volumes of data from multiple sources – something we previously did in Excel. You could call Power BI ‘Excel on steroids’ – it is faster, stronger, and better.
It is important to note that calculating the value of a given keyword is not an exact science, and many parameters can affect the outcome. However, this blog post should hopefully inspire you to utilise your own data and give you a foundation to start working with tools such as Power BI.
All you need to calculate your CTR is data from your Google Search Console. By using your own data, you ensure that the CTR you calculate is representative of your business and therefore as accurate as possible.
I recommend extracting at least 3 months of data – but more is always better. Remember – the more data, the better!
1. Once you have downloaded your data from Search Console, you can import it into your preferred data tool – in my case, Power BI.
2. Next, it is important to clean up the data you have imported.
3. After this, make sure that the position is listed as a whole number. This is necessary so you can compare each position with its respective CTR and calculate the average CTR for a given position.
4. Now you need to calculate your own CTR, as the CTR value from Search Console is already an average. Calculating your own gives a more accurate starting point. You can calculate your own CTR using this formula:
SUM(CLICKS)/SUM(IMPRESSIONS)
In Power BI, you can perform this calculation as follows:
5. After this, you can start visualising the CTR curve itself. Do this by selecting the Scatter chart visualisation.
6. Next, simply plot your positions on the X-axis and your new CTR measure on the Y-axis. Make sure the positions are not summed – you can ensure this by clicking the small arrow to the right of the value.
And there you have it! Your very own CTR curve.
Note: Remember to exclude branded searches from your curve, as these can distort the true CTR.
Now that you have calculated your average CTR for ranking number 1 for a given keyword, you can start working out a concrete value for your various keywords. It is important to keep in mind that these calculations can be affected by many factors. For example, if you have launched a new website or made other major changes during the period in question, this will of course negatively affect your data. There will always be a degree of uncertainty, and the value of a keyword will to some extent be subjective, but no one knows your business better than you do – so, in simple terms, it is also about using your common sense.
This depends entirely on what you define as a conversion. It is important to choose the type of conversion that brings the most value to you – in some cases, this may be orders, while in others it could be leads. Before you start, decide which conversion type you will use to measure the value of a keyword. In this example, I will use the number of orders as the metric.
Next, you will need another formula to create a new column that calculates how many orders you could potentially receive by ranking in position 1.
([Impressions]*[CTR as #1]-[Clicks])*Conversion Rate
In this case, our CTR for position 1 = 16.21%, and the conversion rate is 2.35%.
Now, create a table to display the estimated number of orders for each keyword.
You now have an overview of how your keywords could convert in position 1. You can simply multiply the estimated number of orders by your average order value to get a concrete figure for what position 1 on Google is actually worth.
These estimates will always be very conservative and are influenced by many different factors. Therefore, this should be seen as a starting point, as the actual value could be much greater! You can only calculate the value based on the data you have available, so this will never be an exact science.
Let us say you run a business selling flooring online and are considering investing in SEO. However, you are not sure how best to allocate your resources – in that case, this solution would be highly relevant. Traditionally, you might check the search volume for a particular keyword – let us say laminate flooring. This keyword receives approximately 5,400 searches per month, so it appears to be a very interesting keyword at first glance. But how much revenue would ranking number 1 actually generate for you?
If we follow the guide above, we would start by creating a CTR curve showing the average CTR for position 1, based on your own data. Let us say we end up with the curve above, which shows our average CTR is 26.67%. This means that if we rank in position 1 for the keyword ‘laminate flooring’, we can estimate that 26.67% of the 5,400 monthly searches will click through to our website. In other words, we can estimate that we would get 1,440 visitors from this keyword alone, and on top of that, the landing page would also rank for several long-tail keywords.
Next, we would follow the next step of the guide – estimating how many of these 1,440 monthly visitors will convert, and what we can expect in terms of increased turnover (keep in mind, as mentioned, this is not 100% exact, and the actual result will be affected by many factors, such as missing data, etc.). If, in our fictional company, we have an average transaction rate of 1.84%, we can calculate 1.84% of 1,440. That gives us approximately 27 estimated conversions. Then, we multiply these 27 estimated conversions by our average order value, which in this example is 4,350 DKK.
Based on this calculation, we can estimate that we could achieve a monthly turnover of 117,450 DKK by ranking number 1 for the keyword ‘laminate flooring’. All that is left is to grab your calculator and decide whether it is worth focusing your SEO efforts on this keyword.
This was a short guide to calculating the concrete value for your business of ranking number 1 for a given keyword. If you have any questions about this blog post or the topic in general, or if you would like to know more – you are always welcome to contact us at hej@wemarket-digital.com or call us on 70 44 48 25.
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