How to Calculate the Economic Value of an SEO?

June 5, 2013 § Leave a comment

How to Calculate the Economic Value of an SEO?

How to Calculate the Economic Value of an SEO?

When it comes to SEO we mean the abbreviation for the term Search Engine Optimization . The goal is to position a website in the top 10 positions. No matter if you want to hire an agency or going to invest time to train you on SEO issues.

In both cases you’re using you could invest resources for other tasks. The big question is to determine the economic benefit that you could make SEO work.

Factors to be taken into account when calculating the value of work in SEO

Calculate the profit that gives you be positioned in the top 10 of Google is not very complicated really. What is interesting is to see how many potential revenue generated by being in the first, second, third, position in the search. This requires knowing or estimating some of the following factors. 

Conversion ratio of a web page: this reflects the percentage of people who come to a site and ends up buying. Can vary considerably and is positioned between 0.2-25% depending on the product, the online store, seniority, etc… and other criteria, can have an impact on the conversion. 

Search volume keyword: if you have a running shop and sell running shoes you are interested in out in the form. For more keyword search volume is usually more complicated because they are the potential visitors bring. In most cases but not interested in all those held in the region where I offer my services. 

Number of clicks as a function of position: The visibility and image is not the same. Provides greater confidence to the user to be in the first result in the next positions. It is reflected in an increased residence time compared to the rest of the results. 

Net margin of your product is : the more important the net margin of your product, the more important is the potential benefit each visit brings you through SEO to your site. 

Basic Calculation for the keyword “buy flowers”

Imagine your business is to sell flowers online. One of the keywords relevant to your business obviously is “buy flowers”. The only online store makes deliveries in UK. They have several products and the shopping center is situated at 30 euros. Consider the value of being in the top positions for that combination of words. Luckily we have the data. 

  • Conversion ratio of the online store : 1%
  • Spain search volume : 8,100 searches / month
  • Average net margin on sales : 15 euros

Several studies have analyzed the number of clicks on the web positioning function. The results always vary and we have to a difference of 15% for first place depending on the source you choose. In this study we have obtained the following data for CTR depending on SEO.

Potential Income per month depending on the position to “buy flowers”

In this case we know that of the 8,100 visits average 42.3% will click on our link and go to our website. We’re talking about 3426 visits each month. Along with our conversion rate of 1% we can estimate that generate 34 sales thanks to the keyword “buy flowers”. Only this combination gives us potential net profit of 510 euros (34 euros sales x 15 net profit). 

There are some factors that are not taken into account in this calculation. Top positions may have a better conversion ratio greater confidence. Nor have not spoken on the difficulty level. When there is a lot of competition is much more difficult (if not impossible) to be in the first position. In these cases it is necessary to analyze whether the effort (and cost) worth for the benefit that we get in return. 

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Opti Matrix Solution- a fastest growing website development company in India also.

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