Calculating the Value of a Keyword

How to calculate keyword valueEver since Google decided to hide keyword data using secure searches, SEOs have been struggling to get the same insight that used to be so readily available in Google Analytics. While we’ll probably never have the level of insight we had with the exact keyword data straight from the source, we do have a few options for getting an idea of how much a specific keyword is worth to you or your client.

There are four steps we need to take to find this information:

Step 1: Find the Keyword Volume and Clickthrough Rate from Google Webmaster Tools

Login to your Google Webmaster Tools account and locate the site in question. On the left sidebar you will see a bunch of links. Under the Google Index section you will want to click on the Search Queries report. By default Google is going to show you the keywords that generated the most clicks to your site over the past month.

From here you’ll either want to export the data table or look manually for the data on keywords you’re interested in. We are specifically interested in the clicks and impressions data from this table. Jot down those numbers, and you are ready to move on to step 2.

Step 2: Find the Landing Page for the Keyword

There are quite a few ways of figuring out the specific landing page being served for a particular keyword. The most obvious method, is simply to do a manual Google search and record the landing page that Google serves on the search results page for your site. There are also many automated keyword tracking tools that are capable of serving you this information.

Once you know the landing page for the keyword in question, you’re ready to move to the third step.

Step 3: Calculate the Conversion Rate and Value of a Conversion


For e-commerce sites, the formula is very simple. In Google Analytics you’ll find the Landing Pages report under the acquisition section of the GA reports. Locate the landing page associated with the keyword in question, and record the e-commerce Conversion Rate as well as the Average Order Value.

Goal Based Conversions
For goal based conversions the steps are quite similar, but you’ll need a little extra outside information in order to place an actual value on the keyword. In order to determine the equivalent of the Average Order Value, you’ll need to consult the sales team for your company or your client. You need to know two important factors in order to complete our formula. First, determine the percentage of contact form submissions that turn into quality leads. Once you have this information, you’ll also need to find out the closing rate of your sales team on quality leads. Lastly, if available, you’ll want to find out the average lifetime value of a typical client coming from the website.

Now that you have all the information, you can calculate your Keyword Value.

Step 4: Calculate Keyword Value

To calculate your estimated Keyword Value over the course of a month, use the following formula with the information collected in the above steps.

Start by multiplying the total number of clicks to the website for the keyword in question by the conversion rate of the landing page for that keyword. This will give you the estimated number of users that converted from that keyword in Google Search.

For e-commerce clients, simply multiply the estimated number of conversions by the average order value for the landing page of that keyword. The product of these two numbers will going to be your estimated revenue for that keyword.

For goal based sites you’ll follow basically the same formula with the numbers you received from the sales team. Start by multiplying the conversion rate for your keyword’s landing page by the percentage of leads from the website that are quality leads. Then multiply that by the closing rate your sales team shared with you on quality leads from the website.

This new multiplier is going to act as the new conversion rate for your formula. To calculate the estimated number of clients acquired this month, multiply the total number of clicks to the site by this new calculated conversion/closing rate. You now have the estimated number of clients acquired this month attributed to a search on that keyword in Google. If you multiply that number by the average value of a client you acquired from your sales team, you will have an estimated value of that keyword for your site.

But It’s Not Exact Is It?

This is obviously not a perfect science, and you are making quite a few assumptions when coming to this conclusion. We need to be careful, as search intent can skew this data. When a page ranks for many dissimilar keywords, you may have a large variation between them for the conversion rate of the page. For instance, your home page most likely has a higher than average conversion rate on branded search terms to your site, as opposed to a non-branded keywords with your home page as their landing page, where the conversion rate would most likely be significantly lower.

As long as you keep in mind that this formula is only an estimate, you can gather some valuable information about your top keywords and start proving your marketing team’s value a little easier.