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How To Calculate Your Total Addressable Market (TAM) For SEO

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How To Calculate Your Total Addressable Market (TAM) For SEO

When launching a new product/company or pitching for additional funding, forecasting against your TAM (total addressable market) is a key component.

The TAM is a key part of a user acquisition strategy and your SEO campaign alike.

It can help you prioritize optimization activities and forecast traffic potential based on your pre-determined keyword sets.

Your total addressable market differs from your total market, as your total market is your maximum potential opportunity if no competition or alternate products with differing USPs (unique selling proposition) exist.

Your TAM is a fraction of this market but is more closely tied to your personas and potential users whose needs are more closely aligned with your product/service.

What Is The Total Addressable Market (TAM) Formula?

The defined formula for calculating your TAM (in a general business sense) is:

Potential Market x Competitive Position = TAM

Your potential market is the number of potential users, e.g. the number of email users in the world is estimated to be around 4.03bn, but if your competitive position is to cater to U.S. users only, your TAM is approximately 250 million.

Your TAM can also be influenced by users who use adjacent products.

For example, suppose you’re an online service that focuses on user privacy as a core USP.

In that case, users of other privacy-focused products such as Brave (browser) and DuckDuckGo may fall into your overall TAM.

When we look at our SEO TAM, however, we can use existing tools and data to create estimations of our total TAM and then break it down by potential user needs (matching your personas).

Establishing Your TAM

Establishing your SEO TAM, for me, is a three-step process:

  • Fully identify and identify product USPs and capabilities (current, and forecast).
  • Comprehensive keyword research around your product/service/offering.
  • Traffic estimations (click curves and opportunity gap analysis).

For the first step, you can achieve this by meeting with product owners and managers, and asking them about product details, functionality, features, and the product roadmap.

This information can then be used to inform your keyword research to create better content, but also a more valid user experience.

It allows the user to forecast their experience of the product more accurately, reducing both churn and redundancy in the pipeline of unqualified leads.

From experience, these meetings can also help identify some potential angles and messaging that can be included in content that competitors overlook.

The second step is to perform comprehensive keyword research and categorization. As well as categorizing by intent, this is also a good opportunity to categorize by funnel stage.

The third step is to create traffic estimations – and you can do this from your keyword research, the current ranking positions of your target website (if any), and whether or not the SERPs (search engine results pages) for the keywords contain SERP features.

To show this process, I’m going to use the company Narmi as an example (using publicly available data through SEO tools).

The Narmi website currently ranks for approximately 800 keywords in the U.S. and based on estimated SERP CTR data the terms are producing around 500 sessions a month.

If the domain ranked in position one for all 800 search terms, the total potential organic traffic is around 81,000.

Now, this is taking the raw data set. To get a more realistic TAM estimation, you will also need to:

  • Add in additional search terms that you don’t currently rank for, but want to.
  • Remove irrelevant search terms from the data set, e.g. random brands you rank in position 81 for that have been picked up because you mentioned them once in a blog post.

Ranking for position 1 for all potential search terms isn’t realistic.

But with your data, you can create a stepped approach to show what improvements can be made if things were 10% better, 20% better, and so on.

Screenshot taken by author, June 2022

From this, you can demonstrate to other stakeholders and potential investors what improvement is required to hit specific organic traffic goals – and then tie effort values back to resources required.

Utilizing Your TAM

As well as traffic forecasting, your TAM data can be utilized further to forecast leads and transactions.

Lead Forecasting

For most SaaS and lead generation model companies, the pipeline is the most important metric that the majority of C-level and other stakeholders point to.

This can be calculated in a similar fashion to the potential traffic opportunity and can be modeled using your existing lead data.

Using the Narmi estimations, and assuming they currently get 11 SQLs (sales qualified leads) each month, we can model that it takes on average 38 sessions for every SQL.

Based on that conversion rate, the potential lead opportunity on the keyword set is estimated to be 2,116 a month.

Again, this is modeled at 100% first position ranking, but like with traffic estimations we can model this based on incremental performance increase:

Lead forecasting, based on existing conversion rate and incremental performance gainsScreenshot taken by author, June 2022

This can be expanded further if the forecasted lead number is multiplied against the lead value and used to forecast longer-term based on churn rates and LTV (lifetime value).

This can also identify if there are retention issues.

If the pipeline is showing sufficient numbers for the free trial sign-up, but then not enough are converting to paid users, then focus can be turned to either product, or customer service/SDRs (sales development representatives), and potential uncover issues with onsite content and product messaging.

Transaction Forecasting

If you’re an ecommerce store then you can do similar forecasting for the number of transactions you may attain, and total revenue (based on your current or forecast AOV).

If your data fluctuates a lot seasonally or due to the nature of the products you sell, you can break this down by a product category, or even a seasonal category and blend the forecasts together.

Again, you can compare your total organic transaction and revenue potential data to incremental gains:

total organic transaction and revenue potential dataScreenshot taken by author, June 2022

For example, is the current user journey and site conversion rate enough to generate the leads/transactions required to generate an ROI (return on investment) and growth?

Forecasting transactions or leads on existing can help in identifying both opportunities and problems that otherwise may not come to light until they are either missed or being experienced.

More resources:


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Why Building a Brand is Key to SEO

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Why Building a Brand is Key to SEO

For better or worse, brands dominate Google search results. As more results are generated by AI and machines start to understand the offline and online world, big brands are only going to get more powerful. 

Watch on-demand as we tackle the challenge of competing with dominant brands in Google search results. We explained why big brands lead the rankings and how to measure your own brand’s impact against these competitors.

We even shared actionable strategies for improving your visibility by weaving your brand into your SEO.

You’ll learn:

  • Why brands dominate Google (and will continue to do so).
  • How to measure your brand’s impact on search, and what you should focus on.
  • Ways to weave your brand’s identity into your content.

With Dr. Pete Meyers, we explored why brand marketing is vital to search marketing, and how to incorporate your brand into your everyday content and SEO efforts.

If you’re looking to have your brand stand out in a sea of competition, you won’t want to miss this.

View the slides below, or check out the full presentation for all the details.

 

Join Us For Our Next Webinar!

Optimizing For Google’s New Landscape And The Future Of Search

Join us as we dive deep into the evolution reshaping Google’s search rankings in 2024 and beyond. We’ll show you actionable insights to help you navigate the disruption and emerge with a winning SEO strategy.

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How SEO Can Capture Demand You Create Elsewhere

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How SEO Can Capture Demand You Create Elsewhere

Generating demand is about making people want stuff they had no desire to buy before encountering your marketing. 

Sometimes, it’s a short-term play, like an ecommerce store creating buzz before launching a new product. Other times, like with B2B marketing, it’s a long-term play to engage out-of-market audiences.

In either situation, demand generation can quickly become an expensive marketing activity.

Here are some ways SEO can help you capture and retain the demand you’re generating so your marketing budget goes further.

How is demand typically generated? 

There’s no right or wrong way to generate demand. Any marketing activity that generates a desire to buy something (where there wasn’t such a desire before) can be considered demand generation.

Common examples include using:

  • Paid ads
  • Word of mouth
  • Social media
  • Video marketing
  • Email newsletters
  • Content marketing
  • Community marketing

For example, Pryshan is a small local brand in Australia that has created a new type of exfoliating stone from clay. They’ve been selling it offline since 2018, if not earlier.

It’s not a groundbreaking innovation, but it’s also not been done before.

To launch their product online, they started running a bunch of Facebook ads:

Because of their ads, this company is in the early stages of generating demand for its product. Sure, it’s not the type of marketing that will go viral, but it’s still a great example of demand gen.

Looking at search volume data, there are 40 searches per month for the keyword “clay stone exfoliator” in Australia and a handful of other related searches:

Ahrefs' keyword metrics for "clay stone exfoliator" and similar keywords indicating over 100 searches per month when aggregated.Ahrefs' keyword metrics for "clay stone exfoliator" and similar keywords indicating over 100 searches per month when aggregated.

However, these same keywords get hardly any searches in the US:

Search volumes for the clay stone exfoliator keywords in the US are all 0 to 10.Search volumes for the clay stone exfoliator keywords in the US are all 0 to 10.

This never happens.

Australia has a much smaller population than the US. For non-localized searches, Australian search volume is usually about 6-10% of US search volume for the same keywords.

Take a look at the most popular searches as an example:

Side by side copmarison of search volumes in the US compared to Australia for the keywords Youtube, Facebook, Wordle, Gmail and GoogleSide by side copmarison of search volumes in the US compared to Australia for the keywords Youtube, Facebook, Wordle, Gmail and Google

Pryshan’s advertising efforts on other platforms directly create the search demand for exfoliating clay stones.

It doesn’t matter where or how you educate people about the product you sell. What matters is shifting their perceptions from cognitive awareness to emotional desire.

Emotions trigger actions, and usually, the first action people take once they become aware of a cool new thing is to Google it.

If you’re not including SEO as part of your marketing efforts, here are three things you can do to:

  • minimize budget wastage
  • capture interest when people search
  • convert the audiences you’re already reaching

1. Make your product, service, or innovation searchable 

If you’re working hard to create demand for your product, make sure it’s easy for people to discover it when they search Google.

  • Give it a simple name that’s easy to remember
  • Label it according to how people naturally search
  • Avoid any terms that create ambiguities with an existing thing

For example, the concept of a clay exfoliating stone is easy for people to remember.

Even if they don’t remember what Pryshan calls their product, they’ll remember the videos and images they saw of the product being used to exfoliate people’s skin. They’ll remember it’s made from clay instead of a more common material like pumice.

It makes sense for Pryshan to call its product something similar to what people will be inclined to search for.

In this example, however, the context of exfoliation is important.

If Pryshan chooses to call its product “clay stones,” it will have a harder time disambiguating itself from gardening products in search results. It’s already the odd one out in SERPs for such keywords:

Pryshan's shop listing on Google for the keyword "clay stones" is among gardening products.Pryshan's shop listing on Google for the keyword "clay stones" is among gardening products.

When you go through your branding exercises to decide what to call your product or innovation, it helps to search your ideas on Google.

This way, you’ll easily see what phrases to avoid so that your product isn’t being grouped with unrelated things.

2. Own as much real estate on search results as you can 

Imagine being part of a company that invested a lot of money in re-branding itself. New logo, new slogan, new marketing materials… the lot.

On the back of their new business cards, the designers thought inviting people to search for the new slogan on Google would be clever.

The only problem was that this company didn’t rank for the slogan.

They weren’t showing up at all! (Yes, it’s a true story, no I can’t share the brand’s name).

This tactic isn’t new. Many businesses leverage the fact that people will Google things to convert offline audiences into online audiences through their printed, radio, and TV ads.

Billboard that includes a Google search for "cheesesteaks nearby".Billboard that includes a Google search for "cheesesteaks nearby".

Don’t do this if you don’t already own the search results page.

It’s not only a very expensive mistake to make, but it gives the conversions you’ve worked hard for directly to your competitors.

Instead, use SEO to become the only brand people see when they search for your brand, product, or something that you’ve created.

SERP results that can capture demandSERP results that can capture demand

Let’s use Pryshan as an example.

They’re the first brand to create exfoliating clay stones. Their audience has created a few new keywords to find Pryshan’s products on Google, with “clay stone exfoliator” being the most popular variation.

Yet even though it’s a product they’ve brought to market, competitors and retailers are already encroaching on their SERP real estate for this keyword:

Search results for the keyword "clay stone exfoliator" and where Pryshan shows up.Search results for the keyword "clay stone exfoliator" and where Pryshan shows up.

Sure, Pryshan holds four of the organic spots, but it’s not enough.

Many competitors are showing up in the paid product carousel before Pryshan’s website can be seen by searchers:

Sponsored product listings on Google.Sponsored product listings on Google.

They’re already paying for Facebook ads, why not consider some paid Google placements too?

Not to mention, stockists and competitors are ranking for three of the other organic positions.

Having stockists show up for your product may not seem so bad, but if you’re not careful, they may undercut your prices or completely edge you out of the SERPs.

This is also a common tactic used by affiliate marketers to earn commissions from brands that are not SEO-savvy.

In short, SEO can help you protect your brand presence on Google.

3. Use search data to measure demand gen success 

If you’re working hard to generate demand for a cool new thing that’s never been done before, it can be hard to know if it’s working.

Sure, you can measure sales. But a lot of the time, demand generation doesn’t turn into immediate sales.

B2B marketing is a prominent example. Educating and converting out-of-market audiences into in-market prospects can take a long time.

That’s where SEO data can help close the gap and give you data to get more buy-in from decision-makers.

Measure increases in branded searches

A natural byproduct of demand generation activities is that people search more for your brand (or they should if you’re doing it right).

Tracking if your branded keywords improve over time can help you gauge how your demand generation efforts are going.

In Ahrefs, you can use Rank Tracker to monitor how many people discover your website from your branded searches and whether these are trending up:

Example of Ahrefs' Rank Tracker dashboard.Example of Ahrefs' Rank Tracker dashboard.

If your brand is big enough and gets hundreds of searches a month, you can also check out this nifty graph that forecasts search potential in Keywords Explorer:

Example of Ahrefs' keyword metrics indicating monthly search volume and a graph of forecasted growth.Example of Ahrefs' keyword metrics indicating monthly search volume and a graph of forecasted growth.

Discover and track new keywords about your products, services or innovations

If, as part of your demand generation strategy, you’re encouraging people to search for new keywords relating to your product, service, or innovation, set up alerts to monitor your presence for those terms.

This method will also help you uncover the keywords your audience naturally uses anyway.

Start by going to Ahrefs Alerts and setting up a new keyword alert.

How to set up Ahrefs' Alert feature.How to set up Ahrefs' Alert feature.

Add your website.

Leave the volume setting untouched (you want to include low search volume keywords so you discover the new searches people make).

Set your preferred email frequency, and voila, you’re done.

Monitor visibility against competitors

If you’re worried other brands may steal your spotlight in Google’s search results, you can also use Ahrefs to monitor your share of the traffic compared to them.

I like to use the Share of Voice graph in Site Explorer to do this. It looks like this:

Using Ahrefs' Share of Voice graph to compare the traffic from multiple websites.Using Ahrefs' Share of Voice graph to compare the traffic from multiple websites.

This graph is a great bird’s eye view of how you stack up against competitors and if you’re at risk of losing visibility to any of them.

Final thoughts

As SEO professionals, it’s easy to forget how hard some businesses work to generate demand for their products or services.

Demand always comes first, and it’s our job to capture it.

It’s not a chicken or egg scenario. The savviest marketers use this to their advantage by creating their own SEO opportunities long before competitors figure out what they’re doing.

If you’ve seen other great examples of how SEO and demand generation work together, share them with me on LinkedIn anytime.

 

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Google Explains How Cumulative Layout Shift (CLS) Is Measured

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Google Explains How Cumulative Layout Shift (CLS) Is Measured

Google’s Web Performance Developer Advocate, Barry Pollard, has clarified how Cumulative Layout Shift (CLS) is measured.

CLS quantifies how much unexpected layout shift occurs when a person browses your site.

This metric matters to SEO as it’s one of Google’s Core Web Vitals. Pages with low CLS scores provide a more stable experience, potentially leading to better search visibility.

How is it measured? Pollard addressed this question in a thread on X.

Understanding CLS Measurement

Pollard began by explaining the nature of CLS measurement:

“CLS is ‘unitless’ unlike LCP and INP which are measured in seconds/milliseconds.”

He further clarified:

“Each layout shift is calculated by multipyling two percentages or fractions together: What moved (impact fraction) How much it moved (distance fraction).”

This calculation method helps quantify the severity of layout shifts.

As Pollard explained:

“The whole viewport moves all the way down – that’s worse than just half the view port moving all the way down. The whole viewport moving down a little? That’s not as bad as the whole viewport moving down a lot.”

Worse Case Scenario

Pollard described the worst-case scenario for a single layout shift:

“The maximum layout shift is if 100% of the viewport (impact fraction = 1.0) is moved one full viewport down (distance fraction = 1.0).

This gives a layout shift score of 1.0 and is basically the worst type of shift.”

However, he reminds us of the cumulative nature of CLS:

“CLS is Cumulative Layout Shift, and that first word (cumulative) matters. We take all the individual shifts that happen within a short space of time (max 5 seconds) and sum them up to get the CLS score.”

Pollard explained the reasoning behind the 5-second measurement window:

“Originally we cumulated ALL the shifts, but that didn’t really measure the UX—especially for pages opened for a long time (think SPAs or email). Measuring all shifts meant, given enough, time even the best pages would fail!”

He also noted the theoretical maximum CLS score:

“Since each element can only shift when a frame is drawn and we have a 5 second cap and most devices run at 60fps, that gives a theoretical cap on CLS of 5 secs * 60 fps * 1.0 max shift = 300.”

Interpreting CLS Scores

Pollard addressed how to interpret CLS scores:

“… it helps to think of CLS as a percentage of movement. The good threshold of 0.1 means about the page moved 10%—which could mean the whole page moved 10%, or half the page moved 20%, or lots of little movements were equivalent to either of those.”

Regarding the specific threshold values, Pollard explained:

“So why is 0.1 ‘good’ and 0.25 ‘poor’? That’s explained here as was a combination of what we’d want (CLS = 0!) and what is achievable … 0.05 was actually achievable at the median, but for many sites it wouldn’t be, so went slightly higher.”

See also: How You Can Measure Core Web Vitals

Why This Matters

Pollard’s insights provide web developers and SEO professionals with a clearer understanding of measuring and optimizing for CLS.

As you work with CLS, keep these points in mind:

  • CLS is unitless and calculated from impact and distance fractions.
  • It’s cumulative, measuring shifts over a 5-second window.
  • The “good” threshold of 0.1 roughly equates to 10% of viewport movement.
  • CLS scores can exceed 1.0 due to multiple shifts adding up.
  • The thresholds (0.1 for “good”, 0.25 for “poor”) balance ideal performance with achievable goals.

With this insight, you can make adjustments to achieve Google’s threshold.


Featured Image: Piscine26/Shutterstock



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