Learn SEO #2: Find Your Most Profitable Keyword
By: Ryan Francis / April 3, 2014
- Introduction to SEO
- Find Your Most Profitable Keyword
- On-Page SEO
- Off-Page SEO
In 2012 I started Francis Lofts & Bunks, a company that makes loft beds and bunk beds for adults. Since most bunk beds are designed for children, we developed a bed for adults that was modern, heavy-duty, and would look great in a big city apartment.
Francis Lofts & Bunks Queen over Queen Bunk Bed has a weight capacity of 2,000 pounds to support the weight of multiple adults.
Consider the following three keyword options for Francis Lofts with their corresponding monthly searches:
- Bunk Beds (135,000)
- Adult Bunk Beds (1,600)
- Queen Bunk Beds (1,300)
Learn The Metrics That Drive Profit
$ Keyword Profit = Number of visitors that buy profitable products
For the keyword “Bunk Beds”, what is the largest amount of profit Francis Lofts & Bunks could obtain via Google Organic results? Best case scenario, every person that searches “Bunk Beds” on Google ends up purchasing Francis Lofts & Bunks’ highest profit bunk bed. Why doesn’t this actually happen?
Number of Visitors
First, not all of the people that search “Bunk Beds” are going to click on our listing. In fact, depending on our rank we may not be able to get ANY of the searches. Let’s say we show up in the fourth position when someone searches “Bunk Beds”. According to research, the listing in the fourth position is clicked 4.8% of the time. This is known as the Click Through Rate (CTR). So if 4.8% of the 135,000 searches click our listing, we can estimate that 6,480 people will visit our site. This is known as Clicks.
Second, of the people that do come to our site, the majority will be looking for a different product than we offer. Perhaps they want a wooden bunk bed (ours is metal), or maybe they want something in a cheaper price range. Regardless of the case, the percentage of customers that end up buying what we have is known as the Conversion Rate.
Lastly, customers searching for “Bunk Beds” are likely seeking cheaper bunk beds than customers searching for “Premium Bunk Beds”. As a result, these customers are likely buying a lower profit product from Francis Lofts & Bunks. This is known as the Average Conversion Value, but it is more accurately described as Gross Profit Per Conversion.
- # Searches = # of times keyword is searched in a period of time
- % CTR (Click Through Rate) = how often your listing is clicked by the searcher
- % Conversion = how often a visitor accomplishes something you want them to, like signing up, purchasing something, or submitting a question
- $ Gross Profit Per Conversion = average gross profit per conversion for keyword, where gross profit is revenue—cost of sale
Find the keyword that excels in these metrics, and you will find the keyword that will bring you the highest profit.
Find The Metrics For Your Keywords
For each Keyword…
Step 1: Find Monthly Traffic Estimates
There are several tools for this, but I recommend Raven Tools (30-day free trial available) or SEMRush (no account needed for the first several searches) for traffic estimation. Google Keyword Planner is also useful and completely free, but it doesn’t give real keyword metrics like the old Google Keyword Tool used to provide. Moz is a popular tool but uses Bing data instead of Google for keyword traffic estimates.
Step 2: Estimate Your Google Rank
To estimate your Google Rank for a certain keyword, type it into Google and have a look at the competition on the first page. Be realistic about where you think you can show up, and note whether or not it is possible to get into the #1 position. A great indicator of the level of competition is how closely the businesses showing up relate to the keyword searched. Google is outstanding at matching a search to relevant results, so if the results seem unrelated to the keyword, there is likely room for you to make your move to the top.
Step 3: Estimate your CTR
Based on the rank you just estimated, find your CTR in the right column of the following table:
Step 4: Estimate Your Conversion Rate
This is a tough metric to estimate if you have no online data yet. The main key here is that each keyword has a conversion rate that is relatively accurate compared to the other conversion rates. For instance, “premium bunk beds” will have a higher conversion rate than “cheap bunk beds” since we offer a high-end bunk bed. It would be reasonable to estimate that “premium bunk bed” will have a 4% conversion rate while just “bunk beds” will have a 1% conversion rate.
Step 5: Estimate Your Gross Profit Per Conversion
If our cheapest bunk bed sells for $1000 but costs us $700 to make, then it has a gross profit of $300. If our most expensive bunk bed sells for $1500 but costs us $900 to make, then its gross profit is $600. Since people searching for “premium bunk beds” as opposed to just “bunk beds” are more likely to buy the high end bunk bed, it is reasonable to assume that the gross profit per conversion will be higher for the keyword “premium bunk bed.” It would be appropriate to estimate a $500 gross profit per conversion for “premium bunk bed” and $375 gross profit per conversion for “bunk beds”.
Crunch The Numbers To Calculate The Highest Profit Keyword
$ Keyword Profit = Number of visitors that buy profitable products
$ Keyword Profit = # Searches * % CTR * % Conversion * $ Gross Profit Per Conversion
I put together the following Google Rank predictions for Francis Lofts & Bunks keywords:
- “Bunk Beds”: Position #25 (CTR: 0.1% or lower)
- “Adult Bunk Beds”: Position #1 (CTR = 12.6%)
- “Queen Bunk Beds”: Position #4 (CTR = 3.5%)
Using these estimations and the results of my own analysis described in the last section, I generated the table below. Feel free to download my simple SEO Keyword Analysis Tool that I used to generate this table.
It is clear from the table that “Adult Bunk Beds” is the best of the three keywords. Even though “Bunk Beds” has 83 times as many searches per month as “Adult Bunk Beds”, its CTR is only 0.1% due to a low estimated Google Rank. This low CTR causes “Adult Bunk Beds” to take the lead in traffic. Further, the conversion rate is highest for “Adult Bunk Beds,” meaning for every visitor that comes to our site, more of them are actually buying.
Understanding The Big Picture Strategy
You might be thinking that it seems like an over-simplification to target just ONE keyword. This is of course true. The whole purpose of this exercise is to find your most profitable keyword. Once you know your most profitable keyword, you can start slurping up the similar keywords. For instance, if Francis Lofts & Bunks can achieve the #1 position for the keyword “Adult Bunk Beds”, don’t you think they’d have a good shot at “Adult Bunk Bed”, or “Bunk Beds for Adults.”? These adjacent keywords will have very similar ranking, conversion, and profitability profiles, so it is virtually guaranteed that the clicks and profit will be higher than what we estimated in the analysis above.
Knowing which keyword to attack is only the first step toward a comprehensive SEO attack. In my next blog post, I will teach you how to optimize your website with the right meta information and content to move quickly up the Google Ranks.
Post by Ryan Francis
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