The Cost of Not Ranking Organically

For one company, it was potentially $2.3 million for just 7 words

Several people have asked me to explain this worksheet since I presented it recently at a local conference.  Several years ago, I developed a more advanced version of this worksheet for a company to help justify to management that they should spend money on SEO. I introduced this variation of the Missed Opportunity Matrix over 10 years ago at an SES event.

The focus of this exercise was to highlight that the company was paying for a segment of traffic they could/should be getting from SEO if they were only ranking better. Ranking better in this case was to have a listing in the Top 10 positions.  Yes, I know you want to be in the Top 5, but we had to start simply with this company, so work with me here.  Yes, I know there is an argument that one should even care about ranking, but when we did this exercise, it still very much mattered.

Here is the chart I developed [the key is at the bottom of the article]

Initial Findings:

For the seven words that were deemed critical to the client:

• They had first-page rankings for only 1 of the seven terms.
• In 5/7 cases, they had received ZERO organic traffic for these words
• In all cases, they were getting less than a fraction of 1% of the opportunity
• For the one term in the 4^th position, there was no description due to flash content

The Hypothesis of the Worksheet

You may need to jump down to the key to understand some of the columns of data I used for the calculations, but essentially, we showed that if they could get on the first page of Google and capture 5% of the search volume of traffic, then that would be that much less traffic they would have to pay for.  Currently, to capture 5% of the opportunity at their current average cost per click would require a paid search budget of slightly over 2.3 million dollars per year to generate the same level of traffic they should be getting without paying for the click.  Sample Cost of Not Ranking Template

The Cost of Not Ranking would cost them $2.3 million per year

We can argue how much traffic they should be getting and from where.  However, they are category leaders in many of these categories, yet they have no organic exposure.  If we can agree that somewhere between 60% to 90% of all searchers click on the organic listings over the paid listings, then we can agree that they were missing out on a lot of traffic that they would now have to acquire by the click.  At the CPC listed in the worksheet, it is a lot of money to get the traffic they deem “critical” to their company.

The Outcome

The management team saw this matrix and was stunned.  First, they did not understand the search opportunity regarding how many people were looking for the types of products they offered.  They then had a better appreciation of the business opportunity of search, which is the purpose of the Missed Opportunity Matrix.

Second, they realized that they only click on organic listings, and therefore, their peers and prospects would only do the same.  They then mandated that this problem be resolved for the top 10 keywords listed as mission-critical as a test.

We started an aggressive optimization program that resulted in significant traffic increases. While the program did steal the budget from the paid search program, it did drive a substantial increase in traffic. In a later review meeting, the now more savvy executives wanted to know about the correlation between paid and organic, which resulted in several worksheets that showed how they should be effectively integrated to maximize success.

Note: That listing, which had a #4 position but little traffic, once identified and the snippet created, started getting over 35% of the total estimated click volume. That single change allowed us to show immediate results in the program, resulting in significant budgets being applied to SEO activities.

Key

Keywords – these were the sampling words that they wanted to perform better for but could not convince management to make the effort to make the investment.

Estimated Searches Per month – this comes from the Google Keyword suggestion tool.  Since the paid search words were on broad match, we used the broad match volume here, which will skew the data for organic, but we opted to go with it for dramatic effect.

Current Traffic (Organic) – represents many visits they had to their site for keyword phrases based on their web analytics tool.

Share Of Clicks – As a percentage of the total opportunity [Estimated Searchers /Current Traffic] we could show what share they were getting of the opportunity.

Current Rank Google – This was added to show the cause/effect of not ranking.

Top 10 Click Opp – This is the estimated share of clicks we could get in the top 10.  Yes, this should be higher, but we needed the simplest demonstratable point possible for these words: there are the top 10 organic and 10 paid search terms. This means there are 20 options for a searcher to click. There is a 1 in 20 chance of being clicked.  A 1/20 ratio is 5% so it is relatively defendable to the client.  There is a more sophisticated version were we incorporate click probabilities based on position but that was introduced later.

Organic Traffic – this is the number of visits we should get if we had a top 10 position or 5% of the total search volume for that phrase.

Missed Opp – this is the delta between what they are getting and what they could get if they were ranking and could capture a 5% share of the volume.

CPC – this is the average CPC they were paying for these terms in the paid search campaign.  You can take the estimated CPC from the Google Keyword Suggestion tool but since they were buying those words already, we used their exact average CPC.

Incremental Traffic Cost – This is what it costs them to buy that 5% share of traffic they could be getting with organic search. Yes, there is cannibalization of the organic traffic with paid, but that typically happens when they rank higher. Also, with paid, they were averaging about a 1% click rate on their paid search since it was poorly executed. Even if they had 100% cannibalization, they would still have to pay for the 4% opportunity difference.