In Chapter 4, we explain how to calculate the business opportunity by building the business case to justify the investment to management.
Using the following process and the Missed Opportunity worksheet, you can calculate your first campaign’s opportunity. You can download the Missed Opportunity Worksheet and develop your own forecasts.
Step 1: Identify your important target keywords (gold words)
These are the words that are critical to your business. You can start with 10 or 100, but the exact number isn’t critical, because we are using them only to build a sample of the opportunity.
Step 2: Determine demand for your gold words
For Global Demand, you can use the global search volume or you can segment your metrics to a specific country, depending on your business. In Chapter 6, we explore several sources of keyword demand information. Just as with keyword referral information, Google has taken steps to reduce your access to keyword demand information, by eliminating its open access keyword tool and sharply curtailing access to its keyword API. But there are still a few ways to estimate the demand for the keywords that you have targeted for your campaign, with Google Keyword Planner remaining the best tool. While free to use, you do have to create a user account.
Step 3: Beginning Search Engine Traffic
Your “beginning” traffic number is the number of visits you are currently receiving. Because Google and Bing are hiding much of the traffic from analytics tools, the actual number of search visits might actually be ten times larger than the number that you see in your analytics system.
Step 4: Percent of Demand
This is the share of that total opportunity you have realized. Simply divide the Current SE Traffic Column by the Total Global Demand Column to get the percent of current opportunity.
Step 5: Current Rank
This is the current average rank of each keyword. You can get this from Google Webmaster Tools, manual review or your favorite Rank Checking Tool. Adding the rank helps demonstrate the impact of not ranking well.
Step 6: Estimate Click Opportunity – Low End
This is your estimate of clicks–if you can rank well. In the example, we used five percent as the clickthrough rate because that is an average calculated by the click opportunity of 10 organic and 10 paid results that are listed on the screen. With 20 click opportunities and one click, that calculates to a five percent opportunity of getting clicked.
Step 7: Estimate Click Opportunity – High End
The high end clickthrough rate is used as a stretch goal. If your page ranks high on the first page, your clickthrough rate can probably exceed the average of five percent.
Step 8: Estimate the Value of a Click
Depending on what your site’s conversion is, you might have a different way of calculating the value of a click on your ad. If your site sells online, you can calculate that average conversion rate for a visitor ad multiply that by the average profit on an order to determine the value of the click. If your site is a publishing site supported by display advertising, you can calculate that average number of pages viewed with the profits for ads on each page. Your goal for this metric is to capture the return on your advertising spending–what is the value to your business of getting that searcher to click your ad?
By following this step-by-step approach, you can forecast the return on your search investment and you can use the same approach to check the real-life results of your campaign against your forecast.