Search Engine Optimization is a total mystery to many professional vacation rental managers. You know you need to do it. You’ve been told it will help you get more bookings. But, maybe you don’t know where to start, or even how to judge if what you’re doing is paying off.
The organic traffic you get from search engines is free, but SEO is far from free. You have to consider the time and effort you’re putting in to do the work, or the amount of money you’re paying for someone else to do your SEO.
Wouldn’t it be nice if there was a way to put a value on your SEO efforts and even estimate your potential return on investment? And what if you could do that before you even started? Interested?
Well, today we’re going to show you a method for doing just that.
The Power of Data
We live in a world where it’s easier than ever to track your website’s performance, thanks to a growing number of tools online (most of them free). In this post, we’re going to show you how to use the information from those tools to estimate your potential return on investment from an SEO campaign.
It all comes down to understanding how Google works and what tools are available to help you assess how SEO could help you get more traffic and ultimately more bookings and more revenue.
So without further ado, let’s get started.
Where You Rank Correlates to Traffic
The first step in understanding how ranking better can help you get more bookings is to understand not only that where you rank correlates to how much traffic you get, but also being able to estimate how much traffic you can expect to see at different search engine ranking positions.
Using the following tools and formulas, we’ll show you the potential return you can expect for improving your ranking for a single keyword. Ultimately, you’re going to want to repeat this analysis for every keyword you’re considering. In fact, this process can even help you determine which keywords are most worthwhile to rank for.
For the process to work, you need to understand four key metrics per keyword (explained in the sections below)
- Search volume for the term
- Average clicks rates at different search positions
- Your website’s conversion rate for each term
- The average revenue per conversion
Let’s get started by exploring how you can estimate a keyword’s monthly search volume.
Estimating Search Volume
The first thing you need to do is estimate how many total searches a keyword gets every month. There are a lot of tools you can use to do these estimates.
Google Search Console – If you’ve got Google Search Console (formerly Webmaster Tools) set up and you’re already ranking for some terms, you can go to the Search Traffic > Search Analytics section to see how many total impressions those keywords are getting you each month. You can also get a good estimate from Google of your average position, as well as the click-through rate to your website from search results.
Here's quick overview of SEMrush's keyword analytics tool. For this exercise, you'll be most interested in the Search Volume for the keyword.
Estimating Click Through Rate by Position
The next thing you need to do is look at some of the click-through-rate studies for organic search. Now, every year and with every new Google feature (think local result carousels or rich snippets), this data can change. But, taking these into consideration, you get a rough idea of your click-through-rate at different positions by looking at some of these studies.
This study from AdvancedWebRanking.com does a good job explaining what type of click-through rates you might see at each position. Let’s look at some of the findings:
Position 1 – 28.9%
Position 2 – 14.3%
Position 3 – 10%
Position 4 – 6.47%
Position 5 – 4.58%
Position 6 – 3.29%
Position 7 – 2.43%
Position 8 – 1.87%
Position 9 – 1.41%
Position 10 – 1.06%
As you can see, there is a noticeable drop-off between the top position and the second position, and by the time you get to the end of page one, you’re barely getting 1% of clicks.
But, now that you know how many clicks you stand to get, you can estimate how much traffic you’ll get at different search positions. Just take the total search volume for the term times the click-through rate for the ranking position. For example, if the term got 1,000 monthly searches and you ranked No. 1, you could expect to get about 290 clicks (1000 x .289 = ~290 clicks).
Estimating Traffic Conversion
Now that you have an idea of how much more traffic you can get by ranking higher, you’ll need to understand how that traffic converts to bookings. The problem is that back in about 2011 Google Analytics removed the ability for you to track organic traffic by keyword. However, you can still track conversion by keyword for Adwords terms. This is the next best thing.
So, if you’re advertising for that term on Adwords, take a look at how that keyword is performing in Google Analytics.
First, head over to Acquisition > All Traffic > Source/Medium.
Then, click on google / cpc in the list.
Under the secondary dimension drop-down, click on Advertising > Keyword.
This will show you a breakdown of every keyword you are bidding on. If you have eCommerce set up on your website, it will tell you your conversion rate for the term (and even the revenue that term is bringing in, if that you have that configured in eCommerce). If you’re using LiveRez, all of our websites are set-up for this eCommerce tracking (you just have to enable it).
Not bidding on the term through Adwords? The next best bet is to look at your overall conversion rate for the website, or even your overall conversion rate for organic traffic. This won't be as accurate, but it will still give you something to go on.
Estimating Revenue Per Transaction
Now, that you have this data, you can use it to estimate how much more revenue you could expect from the extra traffic.
First, you want to figure out what your average revenue per transaction is for that term (just take the revenue and divide it by the number of transactions). To get a more accurate representation here, you might want to expand your dates to a full year.
Then, take the amount of traffic you expect to get from Google (covered in the first two sections) and multiply that by the conversion rate for that term. That will give you a rough idea of how many conversions you can expect a month for that term.
Next, take the number of conversions and multiply them by the average revenue per transaction. That will let you estimate the total monthly revenue you can expect from ranking for that term at that position.
Putting it All Together
Here’s a quick example to explain the entire process.
Step 1: You find the search term is getting 1,000 searches a month.
Step 2: You determined based on the CTR studies that if you rank No. 2. for the term you can expect to get about 143 clicks a month from that term.
Step 3: You look at your conversion rate for that term in Adwords and see that it is at 1%. Therefore, you can assume that of those 143 clicks a month, you’re going to get about 1.4 bookings.
Step 4: You look at some historical conversions for that term and find out that the average conversion (or booking) for that term was worth about $2500 dollars. So, those 1.4 extra bookings a month would amount to about $3500 of booking revenue.
BONUS: If you’re a professional manager, you’re probably only going to be getting a certain percentage of that booking revenue. Let’s say between your commission of the booking revenue and your take of the additional fees, you’ll see a net of about 35% of the booking revenue. That means you would essentially earn about $1225 a month from ranking for that term in that position.
How Much Should You Pay for SEO?
Now comes the fun part. First, run the math for where you rank right now. Then, run the math for where you want to rank (or realistically think you can rank). How much more money would you be making if you improved your ranking position?
This is important information to have when you put together your SEO strategy, especially if you’re thinking about outsourcing your SEO efforts. If what you’re paying in SEO is more expensive than the potential return (all keywords improved), you might want to re-evaluate your strategy.
If you haven’t already caught this, the method we’ve laid out today isn’t an exact science. It’s just a data-driven way to estimate your results. As such, here are a few things to take into consideration when using this method.
- Search volume estimates may vary by tool.
- Click-through rates can vary, especially if the search results for the term are leveraging a newer Google feature, like a local results breakout or a featured rich-snippet answer.
- Your Adwords conversion rate by keyword might vary from your organic conversion rate (but it’s the closest metric we can use to compare).
- You’re going to get the most traffic from terms where you can rank in the top few results. So, instead of trying to rank for a really competitive term, you might try ranking for multiple long-tail keywords (these generally have lower search volume, but less competition – and because they’re more specific, the traffic to your website generally converts better).
- Also, remember that sometimes the guests that find you for the search term choose to book over the phone instead of online. It’s much harder to track this, so you’ll want to take this into consideration. In most cases, you’ll probably end up getting even more return than you can estimate because you can’t track the offline bookings as well.
- Many times the SEO work on your website will have additional benefits. Sometimes it helps your website conversion. The additional content created through SEO efforts can be valuable to guests and help you attract more back links. And back links don’t just help you rank higher, but also get traffic from the sites linking to you.
Want to Learn More about SEO?
If you’ve interesting in learning all about vacation rental SEO, check out our whitepaper: “The Ultimate Guide to Vacation Rental SEO.”
Learn More About LiveRez
LiveRez is the most widely used software platform for professional vacation rental managers. The company’s cloud-based, end-to-end platform offers fully integrated solutions for reservation and property management, websites with online bookings, trust accounting, CRM, housekeeping and maintenance, reporting, reviews and more.
At LiveRez, we take our partnership with each and every one of our property managers seriously. We believe in the power of community and teamwork, and, together with our partners, we win as a team.
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