- SEO Bottom Line Formula
- Keywords and Search Volume
- Conversion Rates
- Average Order Value
It’s a fair question, especially if you’re not sure exactly how SEO works and/or have fallen short of your desired results with previous efforts.
We’re not here to sell you a bill of goods; SEO really does the job when you invest in and implement it correctly. Better yet, you can draw a clear correlation between SEO and your company’s bottom line, enabling you to continually optimize your website for conversions. Let’s start making SEO profitable for your business.
SEO Bottom Line Formula
One of the struggles many business owners and executives face with SEO is that a general understanding of the tactic—i.e., writing content for keywords—doesn’t necessarily explain how SEO is bringing in revenue. We need to drill deeper, but not so deep that we get lost in Google’s 200-plus ranking factors. When we’re using SEO to make money for your business, we’re looking at four main players:
- Keywords and search volume
- Conversion rates
- Average order value
These create a formula for SEO profitability. Learn a little more about each, and you will feel a lot better about working with an SEO agency to not only drive traffic to your site, but also convert visitors into customers at a clearly defined cost per customer.
Keywords and Search Volume
Keywords are measured by search volume, usually expressed as MSV, or monthly search volume. The higher the MSV, the higher the competition. The lower the MSV, the lower the number of leads.
You want to optimize your content with viable keywords for which you can truly compete. If you are an independent website in the automotive industry, it’s futile to go head to head with top auto brands that have much bigger budgets to try to win high-MSV keywords. By simply repositioning the site to focus on lower-MSV keywords, we were able to save the client tens of thousands of dollars while building a $1M recurring monthly revenue stream.
In addition to search volume, it’s also important to consider short tail vs. long tail keywords—e.g., “seo agencies” (short tail) vs. “seo agencies in new york ny” (long tail). A short tail keyword suggests that the user is higher up in the marketing funnel, while a long tail keyword tells us they know what they’re looking for and have higher intent to purchase. A well-balanced SEO strategy includes both short tail and long tail keywords.
After selecting your keywords, the goal, of course, is to rank for them. This is very much a pass or fail test in terms of landing on the first page of the rankings, where users typically begin and end their search. Research from HubSpot found that 75 percent of users never scroll past the first page of search results.
Keep in mind that unless you’re targeting extremely low-volume keywords, it’s a steady climb up the rankings and not an overnight success. Meanwhile, each position up the ladder brings a higher click-through rate (CTR), meaning more visitors to your website.
In a study of 5 million search results, Backlinko found the CTR for the first result on the first page of Google to be 31.73 percent. The second result dropped to 24.71 percent, and by the eighth result, you’re at 3.12 percent. To reiterate the previous point, only 0.78 percent of users click on a second page result.
Keywords help you rank for searches. Ranking brings visitors to your website. Now, we’re getting into the economics of SEO and conversions. SEO (assuming your strategy is accurate) often has higher conversion rates than other channels because it is based on user intent. We can tell by a search term whether the user is looking for information, a transaction or navigation.
Conversion rates are a predictor of bottom line revenue because you can subtract what you’re spending on SEO from the revenue it’s bringing in. You can even break it down into revenue generated from specific keywords and web pages. If your web traffic is high enough, increasing your conversion rate can be more valuable than increasing traffic. Remember, the point of SEO isn’t just to bring people to your website; it’s to bring people to your website and convert them.
Average Order Value
Finally, to arrive at the magic number that is revenue growth from SEO, we can’t forget about average order value (AOV). Google Analytics makes it easy to see how much revenue each e-commerce purchase brings in. Tie that all the way back to the keywords you began with, adjust the strategy based on the keywords that are getting results, rinse and repeat.
SEO isn’t subjective, and it’s not rocket science, either.
SEO isn’t subjective, and it’s not rocket science, either. It just takes a money mindset and the skills to navigate the nuances. Transform your SEO strategy into a revenue generator.