## Archive for January 14th, 2010

## SEO: The Long Tail IS Valuable for Small Keyword Markets

Well, I’m back after the holidays. Here I thought the holidays would be slow and I’d get a chance to write every day. Turns out that was a bad assumption. I was busy as heck with clients who needed it “yesterday.” That’s different than the beginning of the year – so maybe that’s a sign the economy is really improving.

Today’s post is about whether the long-tail is useful for companies with small keyword universes. This became of interest to me when a colleague of mine, Steven Ebin, suggested that this strategy was useful even for small search markets, which had not been my experience.

I define a small keyword universe as one that is less than 1,000 core keywords. The short-tail is defined as keywords that represent 60% of traffic (in my experience usually about 10-15 keywords for small universes, although that can vary substantially). The mid-tail is defined as keywords that represent the next 25% and the long-tail is defined as keywords that represent the balance. I find that many small customers have core keyword universes of this size and distribution, although size of the keyword universe really ties to the specific market, not the size of customer. Be that as it may, my experience is that there is a correlation between size of company and size of keyword market.

Let’s assume that the overall number of monthly clicks for a keyword market, including the long-tail search terms, is 2,200,000 visits.

Next, we know that not everyone clicks – so we need to ignore that traffic. Some aged results reported for AOL in the Webmaster World forums suggest that 46% of searchers don’t click through.

We then have to make some assumptions about where we will rank in each of the positional categories. For purposes of this analysis, I’ll assume that the above average SEO can get an average position of 5 for the short-tail terms, a position of 3 on average of the mid-tail terms, and an average position of 2 for the long-tail terms.

We also have to estimate the clickthrough rates for results in each of these positions in the SERPs. This data varies widely. One study from Cornell University suggests that 56% of searchers who click click on the first result. Some calculations by Jay Geiger suggest that 42.3% of searchers who click click on the first result, and some reported statistics for AOL from the prior-mentioned source show the same number as 23%.

We also have to make some assumptions about conversion rates. Estimating conversion rates is hard because it can vary so much by industry, but let’s assume we have a 0.5% conversion rate for our short-tail terms, 1% for our mid-tail terms, and 3% for our long-tail terms. This gives us a weighted-average conversion rate (based on the percentages in each part of the tail) of 1.0%, which is not unrealistic for organic traffic and may even be low. If you play with these numbers, you will see that a reasonable variation in conversion rate assumption on the long-tail doesn’t change the results of the analysis.

Why increase the conversion rate so much for the long tail? Long-tail searches are more “perfected.” The fact that people type in more specific keyword strings indicates that they are further down the decision-making cycle, and thus the conversion rates are significantly higher. The “spread” that I have assumed for the model is actually conservative. We have often seen conversion rate differentials between the short- and long-tail that are even greater.

When we run out the numbers, using all three sets of clickthrough rates we get the following results:

This analysis shows that the long-tail can potentially double the business for a small company.

We can also look at this same analysis using the length of the keyword string. How does keyword string length relate to location in the tail? Are long keyword strings (3+ words) equivalent to the “long tail”? The answer is “no” – in fact the ratios of searches for length of tail versus length of keyword string are almost the inverse (60/25/15 vs 20/24/56). However, since we could also segment our keyword universe based on length of keyword string and develop a traffic strategy based on that, let’s look at the analysis that way.

Hitwise completed research on the percentage of searches based on number of terms in the keyword string in January 2009 with these results:

It you add the searches with 3+ terms in the keyword, you get 56.06% – so a pretty substantial amount of traffic, but not as high as the 70% I have heard from others.

We also need to adapt the conversion rates to maintain an average 1% across all three categories, so that the analysis between the two approaches is “apples-to-apples.” When you run the analysis based on length of keyword string with a conversion rate to get the same number of conversions as in the prior case, you get the following results:

In this case, the results are even more dramatic, with the number of conversions for keywords with three+ terms dwarfing the one- and two-keyword strings. Even if you take the conversion rate for the three+ keywords down to 0.8% (the same as for two keyword search strings), the conversions are still almost double what is in the one-and two-keyword string categories combined.

So the answer to the question is an absolute “Yes” – the long-tail can be a very valuable source of business even for small keyword universes.