There are two ways of losing money on Google:
1) Not Ranking. 2) Ranking.
1) How to Lose Money By NOT Ranking on Google
The way to lose money by NOT ranking on Google is simple: do not invest in SEO (search engine optimization). But exactly how much of a return will you get on that investment?
There is a simple formula that can help you calculate your potential ROI on a search engine optimization investment.
How to Calculate Your Missed Google Opportunity
You can estimate how much money your company is losing to “missed Google” opportunities with the following formula:
1) Take a key phrase you want to rank for, and run it through the Google AdWords Keyword Tool.
2) Make note of the number of searches per month (use “local” for domestic and “global” if you sell internationally).
3) Take the number of searches and multiply it by 0.5.
4) If you know your site’s conversion rate, multiply the above result by your conversion rate. This is the number of sales and/or leads you are losing out on by not ranking in the first position in Google for your desired term.
If you don’t know your conversion rate, first of all shame on you, secondly, a safe estimation to use is 2%. Conversion rates vary by industry, but across the board approximately 2% of web visitors convert into leads (or sales in the case of online stores).
Are you crying yet?
Don’t cry – just grab a piece of that missed opportunity pie by working with a high-quality SEO consultant to develop your organic search engine optimization strategy. (P.S. Be sure to learn How to Spot A Black Hat SEO ‘Professional’ before evaluating SEO consultants.)
2) How to Lose Money By Ranking on Google
The second way to lose money on Google is to pay them to rank you, i.e. sign up for AdWords.
Building an SEO reputation in the eyes of the search engines takes time. Paid search advertising (i.e. Google AdWords) is a great way to generate instant traffic; however, AdWords as a long-term strategy is not wise, especially since organic (i.e. non-paid) search results are clicked on 94% more than AdWords ads.
Additionally, if you don’t consistently “tweak” AdWords campagins with negative keywords, new match types, A/B versions of ad copy, and different bidding methodologies, I guarantee you are flushing money down the toilet.
So just how much money are you losing on AdWords?
How to Calculate Your AdWords Losses
1) In AdWords, change the date range to “All Time.”
2) Click on the “Keywords” tab. Click on “Keyword Details” and under “Search Terms”, click on “ALL”.
3) Tally up the amount of money spent on phrases that are irrelevant to your business.
If you own an online store, another way to calculate your AdWords losses is:
1) Look at the amount of revenue in the “Google/CPC” source/medium metric of Google Analytics E-Commerce Conversions report for a specific time period.
2) Compare that to the amount of money you spent on AdWords in the same time period.