Pear Analytics

We’ve been hearing for years “how much should we spend on SEO”? This statement would usually come from clients who were also spending a hefty amount in paid search. Well, even if you’re not spending anything in paid search, we’re going to walk you through a concept we developed to show you what SEO could be worth to your website.

Let’s assume that SEO does not have infinite value and that at some point you’ve e dominated your positions for the keywords you want to target. This would be similar to buying all of the search volume in PPC.

Valuation Method #1: Organic Search Conversion Rates

Here you would go into your favorite web analytics account and segment your visitors into organic and paid. If you’ve set up goals and values for these goals, you could essentially determine how much value your SEO effort brought you.

(Organic Search Conversion Rate) * (Conversion Value) = SEO Value™

This is great at calculating what value SEO has delivered and the ROI based on what you’ve spent, but it is not a good indicator of your potential.

What if there was a way to indicate how much your website is worth based on your positions on those words, your potential in SEO for various keywords, and even compare yourself to your competitors?

Valuation Method #2: Position vs. Paid Search Cost

We use this method in SiteJuice™ to give you the additional insight you need to evaluate what you should be spending on SEO. Consider this evaluation:

Your Existing Position in Google – research shows that the top organic spot in Google will get 42% of the clicks, and it decreases quickly from there. If we know where you are in Google for a certain keyword, we can approximate how many clicks you will get. Let’s assume nobody goes past page 3, and so there is no “value” in listings past page 3.

Average Search Volume – This would be the average search volume for the keyword you are targeting, and we’re going to pull this from the Google AdWords API, so it’s not an exact representation of organic search volume, but we can use it.

Average Cost Per Click – This would be the price you would pay per click in a PPC campaign for the keyword.

So to calculate your SEO Value™, you would run your numbers through this equation:

(Position Click Percentage) * (Avg. Search Volume) * (Avg. Cost Per Click) = SEO Value™

Your potential would simply be the top position in Google, where the first part of this equation is set to 0.42 (to represent 42% of the clicks that go to that link).

If you were to calculate an SEO Value™ for a certain keyword at $100.00, but your potential was $1,000, then you are only reaching 10% of your potential. SiteJuice™ calculates all of this for you, including for your competitors so you can determine where you stand.