4 Easy Tips to Keyword Valuation

Keyword valuation is essential to increasing profitability on the internet. When companies are considering expanding to new keyword verticals, a keyword valuation is necessary. These valuations will inform marketing managers on how much money they will make by using the keywords. These keyword valuations can help companies attract major clients.

How to Estimate Organic Keyword Profitability

1. Collect Information on Keyword Search Volume. Gather a list of relevant keywords and place them into the Google Keyword Tool. Up to 100 keywords at a time can be evaluated. This tool has several options that allow users to perform critical tasks. For instance, users can choose specific keywords on the list rather than every variation of terms on the list. This is accomplished by selecting either “exact match” or “phrase match.” Many people prefer to use phrase match because it accounts from long tail variations of seed keywords.

2. Calculate the Keyword Click-Through-Rate (CTR). Once the keyword list is generated, users can forecast monthly click-through-rate based upon search engine ranking. This step is not without its challenges. Often, it is difficult to determine CTR with a high degree of precision. Some experts recommend using data from other company’s Google CTR Study analysis for comparison purposes. Studies will act as a baseline or estimate when data is not available to the user.

3. Calculate Conversion Rates. Real conversion data can be captured in real-time with site analytics. Most people can gain real-time information except in the case of a new site or when evaluating affiliate revenue. Conversion rate averages are used in this instance. These averages can be found from MarketingSherpa’s 2012 Search Marketing Benchmark Report. This report states that most organic conversion rates are between four percent and eight percent.

When real data is unavailable, some experts calculate forecasts with three different conversion point ranges. For a conservative range, one to two percent may be used. For a more robust range, three to four percent is used. For an optimistic range, five to six percent is used.

4. Forecast or Determine Keyword Revenue Potential

Most people want to ultimately know the profitability of every keyword. The computation is usually calculated based upon average value per sale or the lifetime value of the customer. The calculation can also be based on the price per lead if lead generation is the focal point of the profitability study. If this data is not available, the calculation will be similar to forecasting for potential conversions or traffic instead of overall profitability.

Keyword Valuation is Essential to Success

Keyword valuation is essential to the success of any business with a desire to increase profitability through ecommerce. With keyword valuations, businesses can determine which keywords to use in copy and advertisements to get the most return on investment (ROI). Invest in keyword valuation and watch your company’s profit increase.