Contact Us
 
 

Welcome to ineedhits Blog

Welcome to the ineedhits Search Engine Marketing blog, where we share the latest search engine and online marketing news, releases, industry trends and great DIY tips and advice.



Wednesday, March 7, 2012

How Much is a Number 1 Ranking Worth to Your Business?

Posted by @ 7:34 pm
4
  •  

Every business owner wants to be number one, but how much is a first page Google ranking worth to your business?

Calculating the value of a number one ranking is a worthwhile exercise as it allows you to look at the return on investment (ROI) from any SEO campaign you might be considering.

Here are the steps to calculate the value of a number one ranking for your business.

Step 1 – Search Volume
The first step is to calculate the number of people searching for your target keyword.

The Google AdWords keyword tool is perfect for this. Just enter your search phrase, select the country and language targeting options and hit search. The tool will then display the number of global and local monthly searches for your specific keyword, as well as a whole bunch of other related terms.

For this example, I’ve chosen the key phrase flower delivery sydney which has 4,400 local searches per month.

Step 2 – Click Through Rate
The second step is to calculate how many times people click on the number 1 listing from those 4,400 monthly searches.

The latest data suggests that a number one ranking has a click through rate (CTR) of 36.4 percent. Using this figure we can calculate the number of visitors a website would receive in the number one spot for flower delivery sydney,

Visitors = # Searches x Click Through Rate

4,400 Searches * 36.4% CTR = 1601.6 Visitors per month.

Step 3 – Conversion Rate
The third step is to calculate how many of those 1601 visitors are likely to turn in to customers. To do this we need to use the websites conversion rate.

Many webmasters will be able to determine their conversion rate from their analytics, however if you’re unable to come up with a figure you can always use a benchmark of around 1-2%. Calculating the number of sales is as simple as using the following formula,

# Sales = # Visitors x Conversion Rate

1604 Visitors x 1.5% Conversion Rate = 24 Sales

Step 4 – Average Order Value
The final step to calculate the value of a number one ranking is to multiply the number of estimated sales by the average order value of each sale.

If we use an average order value of $100 for our flower delivery example, we can use the following formula to calculate the value of a number one ranking,

$ Sales Revenue = # Sales x Average Order Value

24 Sales x $100 Average order Value = $2,400 per month for a number one ranking for flower delivery sydney.

So there you have it. Simple Right?

I should add that there are a lot of variables at play here so while the figure is by no means exact, it should help to give you a rough guide to the value of a number one ranking.

If you have any questions or comments please let me know below.

P.S. Thanks to the post on espire marketing for the inspiration.



Matthew Elshaw Matt is a marketing professional at ineedhits.com, an international search marketing firm. Matt's passion for online marketing began at university and has proved invaluable in steering product development and marketing initiatives at the company. Matt is a regular contributor to the ineedhits search marketing blog.

View Matthew Elshaw's profile






Discussion (4 - comments)

[...] How Much is a Number 1 Ranking Worth to Your Business?Search Engine Marketing (blog)Every business owner wants to be number one, but how much is a first page Google ranking worth to your business? Calculating the value of a number one ranking is a worthwhile exercise as it allows you to look at the return on investment (ROI) from any … [...]

By How Much is a Number 1 Ranking Worth to Your Business? – Search Engine Marketing (blog) | Affordable Seo Blog - March 7, 2012



[...] How Much is a Number 1 Ranking Worth to Your Business? [...]

By How Much is a Number 1 Ranking Worth to Your Business? | RM2 Project - March 7, 2012



[...] How Much is a Number 1 Ranking Worth to Your Business? Mar 8th, 2012No Comments [...]

By How Much is a Number 1 Ranking Worth to Your Business? « Miami Beach Web Designer - March 7, 2012



Wrong! Google’s monthly search volume figures include a high ration of false searches, such as those performed by the flower shop owners, their webmasters, their SEO consultants, the salespeople of those consultants, the robots they use to find out rankings and the mothers of the flower shops owners in Sydney who show these rankings to their friends while playing bridge. Most of those searches don’t result in clicks and surely not in sales.

The average 36.4% CTR refers only to clicks, out of 100% of clicks on all search results.

By Emanuel Hochstädt - March 8, 2012




Add Your Comments







SUBSCRIBE

Keep up to date with the latest from our blogs.

Subscribe to all blog posts

The Newsletter
BROWSE OUR POSTS




  • New Posts
  • Popular
  • Comments


Jobthread



More in Tips & Advice (58 of 480 articles)


Normally we give you a tips on how to improve your rankings, but sometimes it’s just as important to know ...