Site icon Search Engine People Blog

Page One: What’s A Google Rank Worth

For many companies getting a high ranking on Google is a top priority. But is this a reasonable goal? Is the investment in SEO resources worth the possibility of achieving a top 3 Google rank for your desired keyword?

Good business decisions require some quantified input, so here is an outline of how you might estimate the value of a high Google ranking for your business.

The Numbers

When you look at the statistics, it's easy to see the lion's share of clicks are going to the highest ranked search results. Different studies have put the traffic share of the first position at around 33%, with the second position getting around 15% of share, 9% going to number 3, and steeper dropoffs after number 5. At minimum, 75% of clicks go to the first page of search results.

So at first glance, if you rank at number 1 for a search term related to one of your keyword targets that is searched for 1000 times, you can expect around 300 clicks to your site.

Search Term Dependent

There is a difference between search terms regarding their click-through rate (CTR). Certain search terms are even more skewed towards users clicking on higher ranked positions and neglecting lower ranked results. The following types of searches (let’s call them Winner-Takes-All - WTA - searches) have been shown to involve greater importance of higher rankings:

Other search terms have a more even distribution of clicks throughout the rankings (let’s call them level playing-field - LPF - searches).

Ranking high for LPF queries or keywords could potentially result in comparatively less share of traffic than for terms in the WTA category. These factors usually result in a variance of up to 50% per search term: “delta airlines” might have 55% of traffic going to the first result (probably more), while “cheap headphones tampa” might have only 25% of users clicking on the first-ranked site.

So the type of search term you are targeting has a big impact on the value of higher ranks.

So What's A Ranking Worth?

We can now think about what a ranking might mean to your business. We'll use a low search volume B2B marketing example to illustrate the process:

Step One: Identify an average value per sale. If you sell a complex software solution then the value per sale could be very high (ie $20,000)

Step Two: Identify how many visitors to your site end up purchasing something (ie 1%)

Step Three: Identify the search volume for your key term. Remember, the the total search volume will probably exceed the search volume listed in tools like Adwords Keyword Tool because similar search terms generate additional traffic. We'll use 500 searches for this example.

Step Four: Decide whether your search term is a WTA type query or LPF type query. Estimate the percentages of clicks you will receive at ranks 1 – 5. For example, a 1st rank position might be worth 30% of the clicks, but could be adjusted upwards or downwards depending on the competition and type of query (ie WTA or LPF). We'll use 9% at the 3rd rank for this example.

Step Five: Calculate your value per rank. In this example the numbers work out as:

$20,000 average sale value x 1% conversion rate x 500 searches x 9% rank conversion = $9000

Now we know that a 3rd place rank on Google will probably translate into about $9000 in sales revenue each month.

Is It Worth The Investment?

But what if you want to invest in SEO to increase your position to the number 2 rank? SEO services aren't cheap, so is it worth it? In many cases the answer will be “yes”. Here's how you can decide for yourself:

First: Estimate the conversion rates for each rank in Google. In this case we'll say that the 3rd rank is 9% and 2nd rank is 15%.

Second: Calculate the increase in monthly value. In this case we are subtracting the 2nd place rank conversion rate of 15% from the 3rd place conversion rate of 9%. This becomes:

$20,000 average sale value x 1% conversion rate x 500 searches x (15% - 9% rank conversion) = $6,000

Third: Decide whether you think an increase of $6,000 per month can justify the increase in SEO investment.

The Main Takeaways

Hand-Picked Related Articles:

* Adapted lead image: Public Domain, pixabay.com via getstencil.com