Cost of Not Ranking on Page 1 of Google (how to calculate) - IMS SF June, 2012
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The presentation by Paul Taylor discusses the substantial financial impact of not ranking on the first page of Google, estimating a semiconductor manufacturer could lose $32 million annually. It highlights SEO as the most effective driver of lead generation, with key statistics indicating that 95% of clicks go to the first page of search results. The document emphasizes the importance of SEO measurements and calculations to identify lost opportunities and boost revenue.
Cost of Not Ranking on Page 1 of Google (how to calculate) - IMS SF June, 2012
- 1. The Cost of Not Ranking on Page 1 of Google Paul Taylor, CEO Webmarketing123 Inbound Marketing Summit | June 13, 2012 @webmarketing123
- 2. Digital Marketing Survey 1 November 2011, 600+ Respondents (B2B & B2C) SEO seen as the most potent driver of lead generation 2 Case Study Applying KPIs & Analytics to Calculate the Cost of Not Ranking
- 3. Lead Generation is the #1 Objective for Digital Marketers 2.80% Build Online Community 5.00% 60-70% identify Generate Site Traffic 17.40% Lead Gen and Sales as Primary 11.10% Build Brand Awareness 16.90% Goals 15.30% 23.00% Generate Sales 22.20% 39.90% Generate Leads 46.40% 0% 20% 40% 60% B2C B2B
- 4. SEO Makes the Biggest Impact on Lead Generation B2B B2C 18% Social 25% 25% Media Social PPC 34% Media PPC 57% 41% SEO SEO According to both B2B and B2C Marketers.
- 5. But Social Media is Increasingly Important 68% of marketers say they have generated leads from Facebook, LinkedIn, and Twitter. Of those, 55% have closed deals. 68% 55%
- 6. 4 Billion Searches on Google Every Day
- 7. 95% of Clicks Happen on the 1st Page of Search Results Source: 2010 BrandSoftech.com Study
- 8. 60% of Clicks are on Top 3 Results Eye-tracking data from the Official Google Blog
- 9. B2B & B2C Digital Marketing Survey 1 November 2011, 600+ Respondents (B2B & B2C) SEO seen as the most potent driver of lead generation 2 Case Study Applying KPIs & Analytics to Calculate the Cost of Not Ranking
- 10. Case Study: Semiconductor Manufacturer The Cost of Not Ranking on Page 1 of Google: $32 million/year
- 11. Step-by-Step Calculation of the Cost of Not Ranking on Page 1 of Google • Keyword Selection • CTR on SERP / New Visitors • Website Conversion Rate • Lead Qualified Lead • Qualified Lead Sale • Monthly Cost of Not Ranking • Annualized Cost of Not Ranking
- 12. Keyword Selection: Monthly traffic volume, analytics data, and competitor rankings are three of the (many) factors considered when creating a keyword list for SEO. This list of keywords includes head terms like “mosfet”, which have high volume, but are more competitive to place for. It also includes keywords that have less traffic, but a higher likelihood of conversion, such as “power transistors”.
- 13. Click-through rates on page 1 of Google range from 2%-35% depending on position. All of these keywords will appear on the first page, but in different positions. So let’s use 7% as a conservative estimate of your potential CTR.
- 14. Next, we calculate the number of website visits you are losing each month 1,024,700 monthly searches multiplied by 7% average click through rate =71,729 new website visitors
- 15. Now, we incorporate your conversion data. Google Analytics B2B average is 3%. What percentage of your current website visitors are converting (purchase, download, demo, etc.)? Let’s use the Google Analytics average of 3%.
- 16. Now, we incorporate your conversion data. 71,729 visitors multiplied by 3% average conversion rate = 1,793 new leads
- 17. Now, we incorporate your conversion data. Lead to qualified lead percentage varies business to business, but in our example, we’ll use 15%. What percentage of your leads are qualified? Let’s use 15%.
- 18. Now, we incorporate your conversion data. 1,793 leads Multiplied by 15% average qualification rate = 269 new qualified leads
- 19. Now, we incorporate your conversion data. Qualified lead to closed deal percentage varies business to business, but in our example, we’ll use 10%. What percentage of your qualified leads become closed deals? Let’s use 10%.
- 20. Now, we incorporate your conversion data. 269 qualified leads Multiplied by 10% average closed deal rate = 27 new sales
- 21. Now, we incorporate your conversion data. For a semi-conductor manufacturer, the average value of a new deal is $100,000, so we’ll use that here. What is the average value of a closed deal from your website? Let’s use $100,000.
- 22. Now, we calculate the monthly cost of not ranking on page 1 of Google. 27 new sales x average sale price of $100,000 = $2,700,000
- 23. Annual Cost of Not Ranking: $2,700,000 monthly cost multiplied by 12 months = 32 million+/year
- 24. Key Takeaways SEO is still the workhorse ― While Social Media is increasingly important, SEO is still the core driver of lead generation. SEO is measurable ― Marketers are increasingly expected to be metrics-driven, produce measurable results, and shoulder P & L responsibilities. SEO empowers you to make informed decisions ― By calculating the cost of not ranking, you can identify lost opportunities and capture incremental revenue. SEO has the potential to make you a hero in the workplace.
- 25. Thank You Paul Taylor, CEO paul@webmarketing123.com webmarketing123 facebook.com/webmarketing123 @webmarketing123
Editor's Notes
- #3: 3 parts to our discussion today-1) I wanted to share with you the results of a Digital Marketing Effectiveness survey we conducted with 600 online marketers at various sizes and types of companies.2) Discuss some of the costs of not ranking on the search engines3) Go through an example of quantifying this cost with one of our clients by using their analytics and conversion metricsFirst, if I may ask, what is the #1 objective of your web marketing efforts?
- #4: We surveyed over 600 US marketing professionals in Sept. of 2011. Great, here is what our respondents said were their #1 objectives for digital marketing-Most of our respondents said lead or sales generation, depending on whether they were B2B or B2C60-70% said sales and lead generation were their primary goals. Seems consistent with the idea that marketers are increasingly being asked to lead with a P&L mindset.
- #5: We then asked which online medium has the greatest impact on your lead generation? Over ½ of the B2Bs said SEO and just under 50% of the B2Cs said SEOSocial is an increasingly larger slice of this pie. Note: Social is increasingly important mainly for Brand Preference and Purchase Intent.
- #7: This chart helps us understand why. There are 4B searches per day on Google alone.And we’ve observed that buyers across segments, from design engineers to scientists and researchers to travel professionals, increasingly use the web and search engines as a primary information source in their purchase journey. Your B2B customers are also consumers, and behave much as you do. They go to Starbucks for a morning coffee, shop at Amazon.com, and use Google, LinkedIn, Twitter and Facebook. These experiences shape their expectations. They expect to be able to find and interact with you online as well.(10,000 C-level executives search more than…...”)
- #8: The bad news for many companies is that searchers rarely look beyond the first page of results. A recent study shows that fully 95% of searchers do not click past page 1.
- #9: In fact, Page 1 is not good enough anymore… You have to be above the fold, in the top 3 or 4 results.Even if you are on page 1, as this heat map shows, you need to be at the top of the page or you don’t get noticed.This trend is being magnified by the shift to the use of mobile devices, which display fewer results and are skewing the trend even further.
- #10: 3 parts to our discussion today-1) I wanted to share with you the results of a Digital Marketing Effectiveness survey we conducted with 500 online marketers at various sizes and types of companies.2) Discuss some of the costs of not ranking on the search engines3) Go through an example of quantifying this cost with one of our clients by using their analytics and conversion metricsFirst, if I may ask, what is the #1 objective of your web marketing efforts?
- #11: Here is an example taken from a semiconductor manufacturer