I don’t know about you, but the main reason to “do” SEO is to make more money!
If we spend all the time and energy it takes to identify our target customers and research keywords it needs to do more than get us ranked. The truth is that the vast majority of terms that you can optimize for have little to no commercial value. As people search Google or Yahoo!, some of the times they are just looking for information or wasting time and have no intention on spending money or making a business connection.
It is critically important in our evaluation of keywords, that we make sure we are optimizing for terms that have an appreciable level of commercial intent.
Why is Commercial Intent Important?
Imagine you spend time creating a page on your site after doing some quality keyword research. You have a found a term that is relevant to you site, it has an acceptable amount of search traffic and it meets the standards for competition. You spend your time and energy optimizing for the term and begin to see regular traffic growth.
You now have a page that is ranking in the first position for Google and getting significant amounts of traffic, but the page is not generating any sales or leads.
A search term that does not have an appreciable level of commercial value, is not going to be very valuable for your business. Commercial value is the measurement of the potential profitability of a keyword or phrase. Terms that have a higher potential for profitability are more valuable to your business than terms with low potential.
Google Adwords Please!
Online marketers spend a lot of time developing Adword campaigns to test the conversation rates of landing pages. They will create a page with multiple variations, different title or headline, and then use an Adwords campaign to determine which converts best.
Once they have identified which page is generating the most conversions, they then calculate how much is a conversion worth. If they are selling a product that retails for $100.00 and they know that it takes 10 visits to get 1 paying customer, they have a conversion rate of 10%. This means that 10% of the people who land on their page, purchases their product.
The online marketer knows that as long as they can get 10 clicks, they can generate $100. Therefore, each click is worth about $10. Armed with this information, they will create Adword campaigns and set their maximum cost per click at some number under $10.
It’s like the Stock Market
Because the pay per click value of keywords is driven by cost/benefit analysis, these numbers actual provide us with a type of profitability indicator. It is our very own stock market for keywords. Finding terms that meet all of our other criteria and have good Adword campaign value is the sweet spot of keyword mining.
Finding the Sweet Spot
Let’s take a look at our example.
We have been looking for ‘web designer’ keywords. We have found several that are relevant, have good levels of traffic and acceptable levels of competition.
Look at the ‘Approximate CPC’ column. This is the average real dollar number that online marketers are willing to pay for a single click. The values range from as little as $0.25 to as high as $8.25 per click! This indicates that people are willing to pay as much as $8.25 for a single click because they know they will be making more than that amount per visitor average. This number can be helpful when determining comercial value.
In a previous lesson, we discussed how to calculate SEO Traffic. The SEOT is a expected amount of traffic the number one position in Google should receive for a given search term. We showed that the number one position gets about 42% of the clicks for that term. If we know how many searches per month are performed for that term, the ‘Global Monthly Searches’ column, and we multiply it by .42, the percent of clicks for the number one position, we get the SEOT. This number is important with determining commercial value.
If we take our SEOT for a particular search term and multiply it by the ‘Approximate CPC’ column, we get what is called the SEO Value. This is the approximate dollar value of that term. As a general rule, we want terms that are getting an SEO Value of $900 or more per month. This metric is a good indication of profitability.
SEO Value = SEO Traffic x Adwords Cost Per Click
We now have terms that meet the minimum levels for optimization. Now we need to optimize our page to generate traffic. The next step in the process is to build high quality pages that are optimized for search.
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This lesson is one in an e-course on the Basics of SEO. It covers the cornerstones of basic SEO.