Here's a dose of reality for ya. I have a site with a 2 month old #1 ranking in Google on a keyword with a Adwords Local traffic volume estimate = 3600. Actual visits reported through that keyword via Google Analytics for the past 30 days = 28. Translation: calculating CTR for #1 position based upon Google's Search Volume estimate landed at a .777% CTR -- that's POINT seven seven seven percent Click Through Rate based upon Google's reported global/local search volumes. The CTR number is kinda sucky for that golden #1 organic position. This is in contrast to a zealously naive entry into an SEO campaign and watching the ranks climb, excitedly anticipating that this position might get a 25% CTR from 3600 impressions, which should be 900 visits. With a likely 30% conversion rate in this "wallet out" niche, one could hope for 270 new "hot" leads per month, yielding 30% of customer contacts becoming sales worth an average of $750 each at 40% profit, or $300 "profit in the pocket" per sale. So... if the Adwords Local Traffic Volume estimate were accurate, that #1 ranking on that single term should have been landed 81 sales, $61,750 revenue, and $24,300 profit, minus the cost of the ~$1000 worth of SEO effort exerted over the course of the 5 months it took to get that #1 ranking. The profitability seems way too good to be true, because it is. The reality is... only 28 visits came from that keyword's #1 ranking, yielded NO form submissions, and we can't measure phone leads without buying phone tracking systems that the client can't afford to implement until they lands some sales from the traffic that a #1 ranking should be capable of generating. Knowing that competitors and vendors routinely do keyword searches, we know that a substantial fixed number of visits will be bogus. For all we can see, this #1 ranking could very well be attributable to no revenue at all. For business and campaign planning purposes, there is a VERY big difference between scoring nearly $25,000/month in pure profit from this ranking (which would approx 14,000% return on a $175/month SEO investment for this single term), versus not being able to track that #1 ranking to a single sale. It certainly raises doubt about the value of spending the time & money it takes to score #1 rankings on this particular term, as compared with investing funds into other marketing options. My personal guesses about CTR from humans, conversions, and sale percentages might be fairly close to being right for this niche. Using my predictions about human behavior in this niche to cast judgement from the 28 visits, the actual number of human searches that occurred on this "volume=3600" k/w is likely around 110, with probably HALF of those visits coming from inter-industry competitors and other online marketing service providers. Why are the Adwords Search Volume numbers so exaggerated? Perhaps that search volume estimate includes the huge number of automated queries that occur from keyword tracking tools. Knowing that most of the tools out there have costs associated with them, it's stands to reason that the more common terms will be tracked by a lot more advertisers and their tools, grossly inflating the search volume estimates on the most popular terms within your niche. I haven't confidently decided what number to put in for estimates, but for now, I am conservatively plugging in numbers that assume that the search volume is 10x higher than it will ultimately turn out to be, then taking whatever CTR I expect and muliplying by ".1", then estimating actions per visitor and cutting that in half, and then halving the anticipated number of sales per conversions. Real CTR = .1(expected CTR) Real Conversion Rate = .5(expected Conversion Rate) Real Sales Count = .5(expected sales count per conversion) Calculate ROI potential from there. If this pessimistic number is still quite positive, be skeptical, but consider SEO for that term being worth a try while accounting for the risk of competitors with unrealistic expectations pumping more effort into SEOing the word than the keyword really deserves. SEO is still very worthwhile for many terms within many niches. It's just not the "slam dunk" or "silver bullet" that it used to be.
@netgainassociates thank you for sharing! You make an interesting (and highly overlooked) point of competitors and automated bots doing searches for keywords, assuming that's about half the volume - which I could believe. Do you think our "fudge factors" are accurate or useful?