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  1. #1
    Join Date
    Mar 2006
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    Question Valuing a keyword position

    I invite your views on this but after some brainstorming on this I think I have come up with two ways of valuing a keyword position:

    1) An opportunity cost approach: You get x referrals for y keywords a month. So if the top bid in Google for that keyword is $1 and you get 10 referrals then that keyword y would be worth $10/month.

    2) You measure it in terms of conversions or sales: If you get x referrals for keyword y a month and make z number of sales at price w.

    10 referrals/month * 1 sale * $10 = $10 per month

    3) possibly a combination of the two since the first bullet point puts a value on the opportunity cost of bringing prospects to your site whether the latter puts a value on the sales/profit generating potential of a given keyword.

    There are a few underlying assumptions like perfect keyword and conversion/sales tracking. I.e. you can track exactly which keyword resulted in a sale. This is rather difficult to achieve in real life but as with most theories they are an oversimplified, parsimonious version of reality and this one is no different.
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  2. #2
    Object Not Found junjun's Avatar
    Join Date
    Mar 2002
    northern MI
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    #1 combined with Google analytics, you will be able to track exactly which keyword led to a sale.


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