SEO Forecasting the Holy Grail

Well my apologies it’s been a while sine I put a post out, but don’t worry this is a good one, i’m going to talk about SEO forecasting, how to potentially predict what return you can expect when you undertake an SEO campaign. This is following on from the SASCON Manchester Mini SEO Conference held yesterday at “The Hive” with Speakers @kelvinnewman @NicholaStott @badams hosted by @peteyoung.

It was a good mini conference but now on to the post about what I spoke about.

Background:

A couple of my last posts:

  1. Organic Click through rate
  2. Using Analytics to prove the long tail theory
  3. Predicting time scales in SEO

These are articles were simply part of my process to engage looking at how to predict a return on investment from an SEO perspective, it’s a long article so grab a coffee and start reading.

Assumptons:

I’ll make it clear at the start of this article that this is educated guess work and that it is not a definitive set of figures, however it is a useful guide when you see the results.

Click Through Rates

A recap of my earlier article I took that data from an eye tracking study in 2004, AOL search records in 2006 and then GWT data in 2010  I did this to get an average Click through rate (CTR) if you ranked on the first page of Google. I elimated no.1 position as this would create a higher value becuase of the sheer volume of clicks going to position 1.

The average CTR for position 2-10 is approx. 4.85%

I also needed to consider what percentage of traffic clicked on Organic listings as oppose to Paid listings the research showed approximately 35% clicked on paid and 65% clicked on natural listings.

Website Conversion Rates

In terms of looking at website conversion rates I carried out research from various articles saying how conversion rate can be anything from 1% to 10%, this was to inaccurate for me so in my article about the long tail theory I took the data of 166,000+ keywords set up an custom report in analytic’s and then looked at the conversion rate by keyword length.

From all the data I collated I have advised that an average conversion rate is between 2-4%, for the purpose of this article the figure for website conversion rate is 2.9%

(By conversion I’m talking about a sale, a phone call or an enquiry.)

Keyword Analysis

We now need to get some keywords, this is an investigative exercise, think about your industry, what would you type in to find your site, use tools such as:

  1. https://adwords.google.com/select/KeywordToolExternal
  2. Microsoft-advertising-intelligence
  3. https://adwords.google.com/o/Targeting/Explorer
There are other tools such as Word tracker that can help you get an initial idea, then look at the sites that appear for those keywords, look at what they are optimising themselves for you can further this by the use of tools such as:
  1. www.semrush.com
  2. www.keywordspy.com

Even think about your demographics and how this may change your keywords using sites such as:

  1. www.alexa.com
  2. www.google.com/adplanner
Take the keywords and put them back into the Google Adwords tool to find out the search volume, personally I only use the exact match searches, this way you get a more conservative view of searches.
We know have a prediction of the search volume for all the keyword you think your site should appear under.
What work is involved?
This is an area which requires expertise, looking at the competitor landscape using the keywords we have obtained above we know need to look at the competing websites, their link profiles, your link profiles, what on page work needs to be carried out, what content needs to be written, press releases pulling all this information together allows us to then come up with a cost or monthly cost so we can analyse the potential return.

Predicting Time Scales
I wrote a post last month about predicting time scales in SEO this was based on a lot of data looking at factors such as:
  • URL
  • Category
  • Keyword
  • Price bracket
  • No. of Competing Results
  • 12 Months of results
  • No. of Months to achieve 1st page
  • Increase in Positions (After 12 months)
  • No. of links site hard at start
  • No. of links site had at end
  • No. of links increased
  • Site Age
The data showed some interesting information as seen in brief in the graphs below looking at if an increase in links is done quicker results tend to be quicker and the number of competing pages shows that results take longer. For extended information read my full post on predicting timescales in SEO:
Overall predicting time-scales in SEO is down to experience, but having some data as a guide is always useful.

Financials
The next step is the predicted financials, I have created an Excel spreadsheet with all the details above i.e.
  • Keyword
  • timescale
  • local monthly searches
  • organic to Paid %
  • organic CTR
  • Predicted visitors
  • Predicted No. of sales
  • Average order value
  • Income
  • Gross Profit %
  • Profit
I then created a Profit & loss sheet from the data above based on what revenue should come in at what months.
Finally when you look at the graph for the above we can see the Profit and the payback details. As you can see from the graph the prospect will make a profit in month 5 and they will pay back their initial investment by month 6.

Tracking

In order to access your position against your proposed predictions you need to track your progress, this is best done by using Google Analytics, your sales figures, Google Webmaster Tools and any other ranking data. In order to track your potential return if you are ecommerce website carry out the following custom report.
  • Drill down by Source
  • Transaction
  • product revenue
  • By Keyword.
This tell you how much money your making 🙂

Real Data
Next we need to look at real data does my prediction hold any stance against what a website can actually;y bring in.  The data below uses the same excel sheet at in our prediction but this time with real figures for visits and conversions.
Lets see how this compares with our original predictions.
This shows that are guess was quite good, I think taking into account a 10% on the prediction will give a more accurate finding, but the conversion rate was higher for our client’s site and the CTR. (This is based as some keywords were ranked higher within the top 3.)
Goals
Finally the last part to consider is once you have got to the first page, how much is position 1-3 worth to you, realistically you can get 23 times more traffic if you rank No.1 than ranking in the bottom 5 of the first page, similarly 5.6 times more traffic if ranked No.2 and 3.7 times more traffic ranked No.3 this means that if you have client ranked on the first page they may need to invest 3 or 4 times more to get to a top 3 position.
Overview
Overall we have looked at the following:
  • Predicting Organic Traffic to your website
  • Analysing the Potential Income
  • Studying the investment required
  • Working out profit & loss for your Business Plan.
  • Carrying out ongoing tracking of your predictions
  • Looking at long term goals by reviewing the potential from ranking between positions 10-5 against 3-1.
Resources
Forecasting seo-v1-251010

View more presentations from Neil Walker.

Video from Internet World 2010 on similar presentation (The slides above have the updates on)
This video is 20 minutes long so please be aware.

How to Track Investment In SEO Against Returns? from Just Search on Vimeo.

7 thoughts on “SEO Forecasting the Holy Grail”

  1. Heard your presentation at Mini Conference, was very pleased that it matched what we’ve been doing (though your had much greater detail) and SO glad you’ve done this blog post so we can pad out our theories with yours!

    Much appreciated.

  2. Hey Neil, awesome post! Thanks for sharing. How accurate do you think the Google Keyword Tool is for estimating search traffic (with exact match)? Also would you be willing to share the excel file? In any case, great analysis..

    Jim

    • Hi Jim, The Google keyword tool isn't 100% accurate I've seen phrases with 0 searches in the tool and then a website see thousands of hit from that search term, however the other search volume tools are not Google, I will say that I would generally give a 10-20% change on what figure they give you.

  3. Pingback: Weekly Search & Social News: 11/09/2010 | Search Engine Journal
  5. Pingback: The Business of SEO - State of Search
  6. Pingback: Reflective SEO: Money, Power, Respect | State of Search

Leave a comment

You Are Here: Home » Blog » SEO Forecasting the Holy Grail