The Importance & Benefits Of SEO

Why Search Engine Optimisation?

There's no escaping the fact that to succeed online your website needs to be on the first page of Google search results.

I'd like to take this opportunity to highlight the reasons why and how even a modest SEO campaign can significantly increase revenue and profits.

Google Page One - Why It Matters

Optify recently released a new study highlighting the importance of ranking on the first page of Google.

According to the study ranking top of Google gives your website a massive 36.4 percent click through rate (CTR), followed by 12.5, 9.5, 7.9 and 6.1 for the next four positions.

That's over 70 percent of all clicks from users for the top five positions. However, even ranking in the lower half of the page will drive significant traffic to your website.

Furthermore the average CTR for page one is 8.9 percent, compared to 1.5 for page two.

The study by Optify went on to conclude that all SEO strategies should initially focus on achieving page one search ranking, this is due to the impossibility of accurately targeting a specific position.

Once on page one of Google, the data gleaned from getting there combined with the increased revenue will help in the push for the top five search positions.

What It Means For You - Return On Investment

The bottom line when undertaking an SEO campaign is return on investment (ROI). You'll want to know how much you'll be getting back from your initial outlay.

Fortunately the are many search metrics available which allow us to accurately calculate a ROI for our clients.

The click through rate (CTR) from the Optify study above, combined with search volume, conversion rates and average order value can be used to calculate a potential monthly revenue generated from an SEO campaign.

(keywords traffic x CTR% x conversion% x average order value) = SEO revenue

Now I realise that just showing you a simple formula is not going to mean much to you, so I'll flesh things out with a hypothetical SEO campaign.

I'll be using some of the search metrics from the Optify study above as well as common UK ecommerce statistics.

SEO campaign summary

• Cost of six month SEO campaign: £12,000
• Monthly keyword search volume : 50,000
• Click through rate: 6.1%
• Website average conversion: 3.8%
• Average order value: £50

For this example lets assume you reach position five on Google for keywords with a monthly search volume of 50,000.

Using the CTR of 6.1 percent that's associated with ranking at number five on Google, your website will receive in the region of 3,050 extra visitors each month.

(50,000 monthly search volume x 6.1% CTR) = 3,050 monthly visitors

According to a study by IMRG, the average conversion rate for UK ecommerce websites is 3.8 percent, which results in approximately 115 paying customer each month.

(3,050 monthly visitors x 3.8% conversion rate) = 115 paying monthly visitors

The next number we need for our ROI calculation is the value of the average order. Let's assume our hypothetical e-retailer is selling software which averages £50 per order.

Another simple calculation gives us the monthly revenue generated by an effective SEO campaign, £5,750.

(115 monthly paying visitors x £50 average order value) = £5,750 each month

So there you have it, following a six month SEO campaign similar to the one above your website would be generating an extra £5,750 each month.

In just over eight months your website would reach the break even point and going forward each month's revenue would boost your SEO return on investment.

Summary

Now in the example above I have deliberately kept some of the figures on the conservative side, I wanted to put forward a modest SEO scenario.

Many websites may well have a higher conversion rate or average order value.

There may be times when an SEO campaign will yield a top five ranking much sooner than six months, or a higher position within six months.

Additionally there is the possibility of returning customers as well as new "word of mouth" visitors, all stemming from the original SEO effort.

There are other factors to consider such as increased brand awareness and visibility which can also contribute to future revenue.

All of these additional factors will further increase the ROI from the SEO work.