Find out what ranking in position 1 on Google is worth and how it can boost your visibility, traffic, and conversions to give you a competitive edge.
Danni Jessen
There are 3,800,000 searches conducted on Google every minute! That equates to a staggering 1,997,280,000,000 searches per year! While this is the total number of searches worldwide, it still demonstrates the potential reach you can achieve by ranking number 1 for keywords that matter to your business – even if it is a smaller keyword.
In this blog post, I will explain how you can calculate the value of being number 1 on Google for a specific keyword. This way, you can make a more informed decision about whether it is worthwhile to focus your SEO efforts on that particular keyword.
In this post, I will cover the following:
Data gives you a greater opportunity to optimise your efforts – especially if it is data about your particular industry, business, or target audience. With a bit of technical skill, you can quickly set up your own data in a calculation to help you see, for example, how your click-through rate (CTR) increases as you move up the rankings, or how many orders you can expect to receive by ranking number 1 for a keyword. If you are not familiar with the concept of CTR (Click-through rate), it is a metric that tells you what percentage of users actually click on your search results.
The old-fashioned keyword analyses that only use external data such as general search volume are becoming obsolete – by using data specific to your business, you can much better assess which keywords are worth investing in.
The most important thing you need to calculate the potential value of your keyword is, of course, your own data! With your own data, you can calculate parameters such as click-through rate (CTR), expected number of orders, and more. By using your own data rather than more general data, you can be more confident that your calculations reflect your industry as accurately as possible.
Throughout this guide, I will cover which formulas you can use and how you can visualise them.
Here at WeMarket, we use Power BI, which is a market leader in data processing and visualisation. With Power BI, we can easily handle large volumes of data from many different sources – previously, we did this in Excel. Power BI can be described as Excel on steroids – it is faster, more powerful, and better.
It is important to note that calculating the value of a given keyword is not an exact science, and many parameters can affect the outcome. However, this blog post should inspire you to activate your own data and give you a foundation to start working with tools such as Power BI.
All you need to calculate your CTR is data from your Google Search Console. By using your own data, you ensure that the CTR you calculate is relevant to your business and as accurate as possible.
I recommend that you download at least 3 months of data – but ideally, you should download more. Remember – the more data, the better!
1. Once you have downloaded your data from Search Console, you can import it into your preferred data tool, which in my case is Power BI.
2. Next, it is important to clean up the data you have imported.
3. Then, make sure that the position is set as a whole number. This is important so you can match each position to its respective CTR and calculate the average CTR for a given position.
4. Now you need to calculate your own CTR, as the CTR value from Search Console is already an average CTR. You will get a more accurate baseline by calculating your own CTR. You can calculate your own CTR using the following formula:
SUM(CLICKS)/SUM(IMPRESSIONS)
In Power BI, you can perform this calculation as follows:
5. Once this is done, you can start visualising the CTR curve itself. Do this by selecting the Scatter chart visualisation.
6. Next, simply add your positions to the X-axis and your new CTR measure to the Y-axis. Finally, ensure the positions are not summed. You do this by clicking the small arrow to the right of the value.
And there you have it! Your very own CTR curve!
Note: Remember to exclude brand searches from your curve, as these can skew the real CTR picture.
Now that you have calculated your average CTR for ranking number 1 for a given keyword, you can start to calculate a tangible value for your different keywords. It is important to keep in mind that these calculations can be influenced by many factors, so if, for example, you have launched a new website or made other major changes within the period, this will of course negatively affect your data. There will always be an element of uncertainty, and the value of a keyword will also, to some extent, be a matter of judgement. However, no one knows your business better than you do, so it is ultimately about using your own judgement.
That question really depends on what you define as a conversion. It is important to choose the type of conversion that brings the most value to you – in some cases, it may be orders, while in others, it may be leads. So before you start, decide which type of conversion you will use to measure the value of a keyword. In this case, I will use the number of orders as the target.
Next, you will need another formula to create a new column that calculates how many orders you could potentially receive by ranking in position 1.
([Impressions]*[CTR as no. 1]-[Clicks])*Conversion Rate
In this example, our CTR in position 1 = 16.21%, and the conversion rate is 2.35%.
Next, create a table to show the estimated number of orders for a specific keyword.
Now you have an overview of how your keywords will convert in position 1. You can simply multiply the estimated number of orders by your average order value, and you will have a concrete figure for what position 1 on Google is actually worth.
The estimates from this process will always be very conservative and influenced by many different factors. Therefore, this should be seen as a starting point, as the real value can be much greater! You can only calculate the value based on the data available to you, so this will never be an exact science.
Let’s say you run an online shop selling flooring and you are considering actively working with SEO. However, you are unsure how to best allocate your resources – this solution could be extremely relevant. Traditionally, you might check the search volume for a specific keyword – in this example, let’s use laminate flooring. The keyword laminate flooring has around 5,400 monthly searches, so it initially appears to be a very interesting keyword. But how much revenue could you actually generate by ranking number 1?
If we follow the guide above, we would start by creating a CTR curve that shows what the average CTR would be in position 1, calculated from your own data. Let’s say we end up with the above CTR curve, showing that our average CTR is 26.67%. This means that if we rank in position 1 for the keyword laminate flooring, we can estimate that 26.67% of the 5,400 monthly searches will click through to our website. That is, we can estimate that we will get 1,440 visitors from this keyword alone, and the landing page will also rank for several long-tail keywords.
Next, we follow the next step in the guide – estimating how many of these 1,440 monthly visitors will convert, as well as how much increase in revenue we can expect (Remember, as mentioned, this is not 100% exact, and the real result will be influenced by many factors such as missing data, etc.). If, in our fictional business, we have an average transaction rate of 1.84% – then we can calculate what 1.84% of 1,440 is. That’s approximately 27 estimated conversions. Then, we can multiply these 27 estimated conversions by our average order value, which in this case is 4,350.
Based on this calculation, we can estimate that we could achieve a monthly revenue of 117,450 by ranking number 1 for the keyword “laminate flooring”. So, it is just a matter of getting out your calculator and assessing whether it is worthwhile to focus your SEO efforts on this keyword.
This was a brief guide on how to calculate the actual value for your business of ranking number 1 for a given keyword. If you have any questions about this blog post or the topic in general, or if you would like to know more – you are always welcome to contact us at hej@wemarket.dk/coukxx or on 70 44 48 25.
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