Revenue Forecast/ ESKP - An important metric you cannot miss when doing keyword research

Ha Tuan Khang | 15 mins read

The challenge

A business that invests in Google Ads or SEO campaigns is always interested in the profits made after that campaign, of course, there are other factors such as brand coverage, getting more new users. But how to maximize profits and minimize costs is a dilemma. Businesses can't launch mass campaigns in their field, that's why the step of keyword research when SEO or implementing Google Ads campaigns is always an important step to have. Choosing the right set of effective keywords greatly affects the effectiveness of the campaign.

One thing that we have noticed is that, when researching keywords, we refer to a lot of seemingly quantitative metrics such as search volume, keyword difficulty, CPC, or long-tail selection of keywords that have a good conversion rate. At first glance, these metrics seem very quantitative, but looking closely at the results after running the campaigns, it is very qualitative. Because the method of choosing keywords based on the above metrics does not show businesses a clear problem when these keywords appear on the SERP when we successfully rank up or run Google Ads, what will it bring? (or more precisely is how many orders, how much revenue, how much profit it will bring?

Mistakes from the method of choosing keywords lead to mistakes in the results obtained in revenue and profit. The campaign fails, businesses lose money and time, even though sometimes they think they have succeeded when they see keywords that have appeared on the SERP. And a painful truth is that many companies and units, despite having successfully ranked keywords to the top, still fail in business because they do not sell as expected at first.

So how to choose keywords so that we can most clearly quantify what we achieve even without running a campaign. We have included a metric called Estimated Sales per Keyword Position (ESKP).

Definition

Estimated Sales per Keyword Position (ESKP) is an indicator that relatively determines the estimated sales volume of a business when ranking a particular keyword to the top of Google or other search engines with different positions in an SEO (or Google Ads) campaign.

Method for determining ESKP

ESKP is calculated by the following formula:

• • Volume Search per Keyword: the average monthly search volume of users on google for any given keyword.
  • CTR: Click-through Rate - Percentage of users clicking on the keyword
  • CR: Conversion rate - The average conversion rate of 100 sessions, how many sales are sold

Note:

ESKP is only suitable for sales keywords with commercial intent, not suitable for traffic keywords like information intent. Because the CR rate of information intent is usually not as high as that of commercial intent.

ESKP is a very important metric that helps businesses identify the right keywords and make a decision about which keywords to choose during the keyword research process. This index helps to avoid misjudging the effectiveness received when implementing SEO projects because many companies push too high expectations to bring great profits when ranking top keywords.

Use case

Let's talk about a very specific small case as follows. There is a business A that is selling a product called “golf clubs set”. The desire of the business is to earn 100k USD a month. So now, business A needs to choose which keywords are most appropriate. Solving this problem, you will better visualize the effect of ESKP. This index now not only helps businesses choose the right keywords, but it also gives businesses more than 1 scenario to get that right keyword list.

The Search Volume of the keyword “golf clubs set” is 40,500 according to Keyword Explorer in WriterZen

According to the formula of ESKP, we can determine as the following:

• • ESKP for top 1 : ESKP (top 1) = Search Volume * CTR (top 1) * CR

• • ESKP for top 3 : ESKP (top 1) = Search Volume * CTR (top 3) * CR

• • ESKP for top 5 : ESKP (top 1) = Search Volume * CTR (top 5) * CR

• • ESKP for top 10: ESKP (top 1) = Search Volume * CTR (top 10) * CR

Conversion Rate (CR) in each field, each type of article, the quality of the article's content will be different. We collect CR data based on multiple campaigns running Google Ads. For golf, we have a CR of 3% for the website we used to run for the very business A I'm talking about in this case.

You can also get this metric instantly by running a Google Ads campaign for your chosen keyword, and then measuring how many sales you actually sell for every 100 traffic to your website. Let's say you sell 5 orders. Then the CR of this array is 5%. This ratio may change and vary from time to time, but its margin of change is not high.

Click-Through Rate (CTR) of each different location, we basically have this data. The average CTR for desktop top 1 is 29%, top 3 is 10.78%, top 5 is 5.07%, top 10 is 1.74%. Note that the top 1 here is including the advertising results and the top organic results. Statistics are taken by X Y Z. WriterZen continuously updates the average CTR data of the fields.

So ESKP for each position returns as follows:

• • ESKP (top 1) =40500 * 29% * 3% = 352

• • ESKP (top 3) =40500 * 10.78% * 3% = 131

• • ESKP (top 5) =40500 * 5.07% * 3% = 61

• • ESKP (top 10) =40500 * 1.74% * 3% = 21

The price for golf set A unit is selling for $ 389. And thanks to ESKP, unit A made a miraculous statement as follows:

If unit A invests to rank the keyword "golf clubs set" or runs a Google Ads campaign for this keyword. Then in 1 month: 

• • If the keyword holds the average top 1 position, they can sell about 352 sets for 352 * 389 = 136928 USD.

• • If the keyword holds the top 3 average positions, they can sell about 131 sets for 131*389 = 50959 USD.

• • If the keyword holds the average top 5 positions, they can sell about 61 and earn 61 * 389 = 23729 USD.

• • If the keyword holds the average top 10 positions, they can sell about 21 and earn 21 * 389 = 8169 USD.

Knowing the cost of running Google Ads based on average CPC and the investment costs to SEO, Business A completely calculates the profit from that to determine whether to invest in rank (or run google ads) for the keyword 'golf clubs set' or not. Back to the original problem, business A wants to earn 100k USD a month. At this point, Company A has a few options as follows: 

• • One is to invest in top 1 SEO for the keyword "golf clubs set". 

• • Second, SEO top 2 keyword "golf clubs set" and choose a few other keywords, continue to calculate ESKP so that enough revenue is over 100k USD. 

Have you seen the ESKP metric that helps us quantify the effectiveness when successfully ranking a keyword?

Note: ESKP calculated for the top 1 in the above case is 352 sales. This means roughly around 352 sales. And it can't be 3520 or it can't be 35. This metric helps us to estimate the number of orders sold. Don't expect too much revenue, don't be too negative about revenue.

In short: ESKP is a relative parameter but gives users an approximate view of the market, as well as the influence of SEO on businesses, helping businesses visualize revenue and profit if they do it. Execute a successful SEO campaign thereby avoiding unnecessary risks.

Some ways to optimize ESKP

To optimize revenue, businesses can focus on optimizing the ESKP index. The higher the search volume keyword, the higher the theoretical ESKP will be. But it must also be noted that keywords with a search volume of informational intent type often have a lower CR rate than keywords of transactional intent type, even though this type of search volume is low. Therefore, it is important to consider how the ratio (Volume Search per Keyword) * (CR) is the highest. 

In addition, ESKP depends on the effectiveness of the SEO campaign that the business implements. The better the business does SEO, the more keywords with high positions. A high position leads to a higher percentage of users clicking on the website. In other words, optimizing for high CTR will have high ESKP.

Note: There are three basic types of search queries:

• • Informational – searches performed to answer questions or learn something
  • Navigational – searches performed to locate a specific website
  • Transactional – searches performed to buy something

And WriterZen gives you a great gift for those who read this far. You do not need to spend too much effort calculating ESKP for each keyword by location, do not bother to measure the CR of the array you are operating, or have to research to know the CTR for each keyword position by device type, each Search intent type. WriterZen did all of the above automatically. You just need to use the Keyword Explorer toolkit and turn on the Revenue Forecast Config. Choose a keyword that has a good ESKP. Good luck!

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Ha Tuan Khang

Co-founder of WriterZen