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Inventory Tips & Tactics for 2021 Success

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Inventory Tips & Tactics for 2021 Success

Inventory has always played a significant role in the way you sell on Amazon.

Running out of inventory can impact your organic ranking and can impact your advertising strategy.

Besides the potential loss of sales, poor inventory control also impacts the amount of inventory Amazon will allow you to send into the Fulfillment by Amazon (FBA) program.

Keep reading to learn more about:

  • How your Inventory Performance Index (IPI) score impacts your available storage volume.
  • What the IPI is, and how it’s calculated.
  • Recommended actions for improving your IPI score.
  • Tips for Amazon sellers who are new to Seller Central.

Amazon Limiting Sellers Storage Based On Storage Utilization

Amazon controls your storage capacity limits based on storage utilization and your sales history: 

Total Capacity Limit

This limits the amount of inventory you can restock to Amazon’s FBA warehouses in one shipment and the overall maximum number of units you can store at Amazon.

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Accounts that have been active for less than 39 weeks are not subject to these restrictions.

It is important to note that this is only true for those accounts on the Professional Seller Plan.  Those with individual Seller Plans are limited to 15 cubic feet per month.

This limits the maximum cubic feet of storage space you have at Amazon. These limits are reviewed and adjusted monthly.

Any changes you can expect for your storage capacity for the following month will be announced on the third Monday of the month.

Included in your storage usage are the inventory currently stored at Amazon, inventory en route to Amazon, and any shipments that have been prepared but not yet sent to Amazon.

Screenshot from Amazon Seller Central, February 2024Screenshot of storage capacity monitor on Amazon Seller Central.

 

The Storage Volume is highly impacted by your IPI (Inventory Performance Index).

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We will further discuss how your IPI is calculated later in this article.

IPIScreenshot from Amazon Seller Central, February 2024IPI

Sellers who fall below the minimum criteria can have their storage limited. Operating with such limited storage can significantly undermine your sales forecasts.

We will outline the steps you can take to ensure you have sufficient storage for your high-demand season, maximizing your sales on Seller Central.

We’ll also review what you can do if you fall below Amazon’s set criteria.

You can find your limit by going to Seller Central, selecting Inventory, navigating to the Inventory Dashboard, and then selecting Inventory Performance under the dropdown for Inventory.

Screenshot of how to navigate to find your storage capacity on Amazon. Screenshot from Amazon, February 2024Screenshot of how to navigate to find your storage capacity on Amazon.

Your IPI score will be near the top of the page.

To reach your storage capacity, scroll to the bottom of the page and click on the small gray box labeled Capacity Monitor.

Success on Amazon Means You Have To Manage Your Inventory Levels Proactively

Amazon says that it considers the following criteria for your storage levels:

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  • IPI Score and Sales Performance: Higher storage capacities are granted to accounts that consistently achieve a high IPI score.
  • Storage Utilization: In determining storage limits, Amazon considers your current inventory, inbound inventory, and shipments that are prepared but not yet dispatched.
  • Sales Volume: Amazon will also look at sales volume over time.

Improving Your IPI

If you have a low IPI score, know it will take time to improve your score.

IPI is a rolling average. It can take anywhere from 2 to 12 weeks to increase your score on Amazon, so planning ahead of time is essential.

This means if your IPI is below the 400 Amazon requires, you need to start taking aggressive action today.

This article will outline how to avoid having detrimental storage limits, how it happens, and what to do when you’re already below the threshold.

For those interested in Restock Limits, we’ll explore this topic in more detail later in the guide.

What Is The IPI (Inventory Performance Index), And Does It Affect Me?

The IPI will only affect those using Seller Central and FBA warehouses.

It does not affect those using Vendor Central, Kindle Direct Platform, or those selling on Seller Central by Merchant Fulfilling or utilizing Seller Fulfilled Prime for their items.

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Inventory Performance Index (IPI)

The Inventory Performance Index (IPI) manages how well you control and manage your inventory at Amazon.

This metric is a 12-week rolling average. It looks at several components over three months.

Four components make up the Inventory Performance Index (IPI):

Excess Inventory

This is the most important metric as it measures where your profitability may take a hit due to storage fees and holding costs for slow-moving FBA inventory.

Excess Inventory percentages help sellers plan when to restock more or remove inventory from FBA.

An item is considered to have excess inventory when it has over 90 days of supply based on the forecasted demand. 

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Sell Through Rate

This metric is just how it sounds. The formula that Amazon uses to calculate Sell Through rates is:

(Units Shipped In the Last 90 Days)/(Average Units on Hand Over the Last 90 days)

Stranded Inventory

This provides information on products that aren’t selling due to listing issues.

This occurs when your listing doesn’t meet Amazon guidelines.

In these instances, your products become stranded and unable to move while still incurring FBA storage fees.

In-Stock Inventory

Amazon looks at the percentage of time your products have been in stock during the past 30 days, with additional weight given to items that have sold more units over the past 60 days.

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If you maintain a high in-stock inventory, it will result in fewer lost sales.

Four components of the Inventory Performance Index.Screenshot from author, February 2024Four components of the Inventory Performance Index.

It is important to highlight that these components are not weighted equally.

Excess Inventory

Excess Inventory and Sell-Through Rate are the parameters that have the most significant impact on IPI, while Stranded Inventory and Restock Rates can play a minor role in the overall score.

This means you will get more movement focusing solely on the first two components rather than spreading your efforts equally across all four elements.

During the height of the pandemic, Amazon changed the minimum IPI to 500. IT has since reduced the minimum IPI back to 400.

However, Amazon can increase or decrease the minimum IPI desired score at any point in time.

For this reason, we advise our clients to aim for a total IPI of 600.

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Your minimum goal should be achieving at least 50 points over the current IPI requirement.

Some product mixes make maintaining a high IPI easier than others. For example, if you are a small brand with many products that move consistently, your IPI will generally tend to be higher.

If you are a seller with a large product mix that changes often, it is the most challenging to manage.

Combatting Capacity Limits

If you’re currently experiencing a capacity limit, Amazon can increase your capacity limit for a specific period of time by submitting a request subject to Amazon’s approval.

It is important to remember that if the storage limit increase request gets approved, your account is subject to paying a “reservation fee” for each cubic foot of capacity requested, and it will get charged at the end of the specified period.

Such fee is subject to a credit depending on your sales achieved during the period (performance credits are earned at $0.15 for every dollar of sales you generate using the additional capacity.)

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Another alternative is to continue selling items via merchant fulfillment or using other third-party sellers to move your inventory or send small shipments of your fastest, most profitable inventory to Amazon.

Further down in this article, we will highlight what you can do when your inventory performance is low, you are facing potential inventory limits, or if you’re new to Amazon.

Why Would Amazon Do This?

It seems like it would be counterintuitive for a company that is so focused on having as many products on its platform as possible to limit the amount of inventory you could sell.

However, as more sellers joined the platform and with rising FBA and Prime offers, overcrowding at the warehouses started to become a larger problem for Amazon.

Amazon sellers were attracted to FBA because of the low cost of storage rates. Sellers were using the FBA program as a cheap way to warehouse large amounts of inventory.

At first, Amazon tried to increase storage fees. Adding long-term storage fees dramatically increased the storage cost for merchandise aged over six months.

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However, even with those changes, Amazon couldn’t curve the overcrowding and demand in its FBA warehouses.

As a result, it started to introduce storage limits in 2019.

From Amazon’s perspective, it wants to ensure customers have favorable shopping experiences and quickly get the products they want.

This means ensuring that the products most likely to sell are available.

Amazon looks at how you have managed inventory in the past and whether customers are purchasing your products to determine how much space is allocated to you.

The better Amazon feels you are at managing your space at Amazon’s FBA warehouses, the more storage space you will be allowed.

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What If My IPI Is Below The Current Threshold?

If your IPI is currently below the threshold or within 50 points of the lowest threshold, these are the actions we recommend.

The first step is to check the current threshold. As of the writing of this article, the current threshold for IPI is 400.

However, here’s the direct link to the policy so you can find the current threshold, as Amazon can change this at any time. You can find the current required IPI in Seller Support under the heading FBA Inventory Storage Limits (login required).

You can review your current IPI score in Seller Central by going to Inventory, Inventory Planning, and then clicking on your IPI score.

IPI score in Seller Central.Screenshot from Amazon Seller Central, February 2024IPI score in Seller Central.

 

Even with aggressive tactics, changing the IPI significantly can take 2 to 12 weeks.

Recommended Actions To Improve Inventory Performance Index (IPI)

Excess Inventory – Dump Slow Moving Items

Excess inventory is generally one of the top two reasons your IPI score could be low, since it is the most heavily weighted metric.

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The first step to addressing excess inventory is to pull back inventory you don’t expect to sell.

Focus on stock-keeping units (SKUs) that have gone out of fashion or merchandise experiencing a significant demand drop, like seasonal products.

If you don’t expect it to sell within three months, you should pull back the inventory to sell on a different channel by creating a removal order.

You can also start to use the Multi-Channel Fulfillment (MCF) to fulfill your website orders from your Amazon stock.

Sometimes, it makes more sense to discount and/or advertise products to help them sell faster to remove them from your inventory rather than call back inventory from Amazon.

Optimizing a listing that is not moving can also help increase the sell-through rate.

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A quick note on having Amazon destroy products – sometimes, the company will liquidate that product instead of destroying it.

If inventory control is an essential factor for your brand, we recommend pulling back the inventory even though it costs more.

While Amazon is great at logistics and moving items through its process, it isn’t great at returning items to sellers.

Often, items arrive damaged or mixed SKUs in multiple boxes, clogging up receiving departments.

If possible, we want to ensure that we’re proactively taking action to avoid pulling back inventory and risk inventory being damaged or unavailable to be sold for a long time.

Sell-Through Rate – Send Fast-Moving Items

Amazon looks at this to identify whether the items you’re selling are things customers want to purchase.

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The way that we improve the sell-through rate is to send in small shipments of items that will sell out very quickly.

If you’re currently using LTL or FTL, we recommend that you move to small parcel shipments during this process so that you can send more frequent shipments without going out of stock for long periods.

As you’re restocking items, you want to prioritize those that will move quickly, sending small quantities of items that will sell out as soon as they arrive or shortly after.

This allows your overall sell-through rate to increase dramatically and significantly impact your overall IPI.

It is vital that no matter how fast you think a product will move through, as you send these products in, you’re testing small batches to make sure that things will sell at the pace you anticipate.

Stranded Inventory

Inventory that’s being held in FBA warehouses and not available for sale affects your overall IPI.

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Fixing stranded inventory can make a slight difference; however, if you need to move your IPI significantly, this component of the overall metric will only make a slight difference.

It would be best to address stranded inventory weekly or bi-weekly, depending on your general sell-through rate.

In-Stock Inventory

This is probably the most frustrating metric of the IPI because, basically, Amazon is telling you that you can’t restock items because they’re not selling fast enough.

At the same time, it’s trying to encourage you to ensure you stay in stock.

We have found that this metric is very lightly weighted, and you’re better off focusing on the two key metrics of excess inventory and sell-through rate.

There has been some debate about whether deleting previous SKUs can increase this; however, we have not seen that this significantly impacts the total IPI.

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General IPI Notes

As you’re working to increase your overall IPI, it is important to remember that it can take several weeks to increase.

The IPI is an average calculated over 12 weeks.

You must give the IPI enough time to move before determining whether your actions are making a difference.

It can be tempting to check your IPI often. However, your IPI score is only recalculated once a week.

If you need to raise your IPI quickly or by a significant amount, you may need to take overly aggressive actions in pruning your inventory and pumping fast-moving items through your account to increase your score to the required amount.

You might have to also bid for a capacity increase.

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You should only do this if you have the data to support being able to sell through that higher quantity of items so you do not incur extra charges.

Additional Options To Combat Low IPI and Storage Capacity Issues

Sometimes, this means utilizing third-party sellers to ensure that inventory can be available to customers with a Prime offer.

Some of the brands we work with have focused on selling their fastest-moving SKUs while they improve their overall IPI score and capacity limits.

Then, they utilized third-party sellers to carry their slower-moving items while they worked on increasing their averages.

We have several reliable third-party resellers we refer our clients to if it’s ever an issue.

This means that those accounts saw a faster increase in storage capacity as they were sending in inventory that was selling at a much faster rate and restocking regularly.

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If you don’t want to utilize third-party sellers, the alternative is to increase your total number of merchant-fulfilled offerings.

Remember that Merchant Fulfilled offerings generally don’t compete well against FBA offers, so watch your competition to determine feasibility.

While many brands avoid third-party sellers because it may reduce control over their brand, in this instance, it can be an excellent tool to ensure that you don’t lose potential market share to other competing product lines.

Another step you can take is to allocate your FBA warehouse space to items with the highest margin and smallest dimensional size, as they are highly profitable and sell quickly.

Leaving items with lower profitability or moving slower through Merchant Fulfilled (MF).

Tips For New Amazon Sellers

If you’re a new seller coming to Amazon or moving from Vendor Central to Seller Central, start by sending small quantities at first.

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You have a grace window of 39 weeks when opening your account.

However, you want to ensure you send in small amounts of inventory. A few cases per product can help you identify the overall sell-through rate.

There is no minimum for sending inventory into Amazon FBA. So, it is possible to test as little as one unit at a time to test products on Amazon.

Sending in small shipments does increase your overall shipping cost and can reduce profitability in the short term.

However, when you’re first investigating the platform, sending in smaller quantities can help you better understand your product’s demand and help avoid additional fees that can be required to call inventory back or pay for storage fees.

Once you have a better idea of your sell-through rate, you can start to increase the total sizes of your inventory.

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It is a delicate balance to have enough inventory so that you don’t run out of stock but also that you don’t have excess inventory.

While, in general, you want to aggressively avoid stockouts, the impact of a low IPI score should take priority.

Monitoring Inventory Matters

To succeed on the platform, you must take an active role in your Amazon inventory management.

In prior years, simply avoiding restocks was enough.

However, these new requirements require a greater focus on monitoring your sell-through rate and storage utilization on Amazon.

Prepare now to support your Amazon marketing and sales goals for the coming holiday season.

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Content Pruning: Why It Works, and How to Do It

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Content Pruning: Why It Works, and How to Do It

Content pruning sounds pretty appealing: delete a ton of content and see your organic traffic improve. But pruning has risks (like deleting useful pages and useful backlinks), and benefits are not guaranteed: So how does pruning actually work? And when

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8 Free SEO Reporting Tools

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8 Free SEO Reporting Tools

There’s no shortage of SEO reporting tools to choose from—but what are the core tools you need to put together an SEO report?

In this article, I’ll share eight of my favorite SEO reporting tools to help you create a comprehensive SEO report for free.

Price: Free

Google Search Console, often called GSC, is one of the most widely used tools to track important SEO metrics from Google Search.

Most common reporting use case

GSC has a ton of data to dive into, but the main performance indicator SEOs look at first in GSC is Clicks on the main Overview dashboard.

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As the data is from Google, SEOs consider it to be a good barometer for tracking organic search performance. As well as clicks data, you can also track the following from the Performance report:

  • Total Impressions
  • Average CTR
  • Average Position
gsc-performance-overviewgsc-performance-overview

Tip

If you’ve signed up for AWT using Google Search Console, you can view your GSC performance data in Ahrefs by clicking “GSC Performance” from the main dashboard.

But for most SEO reporting, GSC clicks data is exported into a spreadsheet and turned into a chart to visualize year-over-year performance.

organic-traffic-graph-showing-clicks-year-over-yearorganic-traffic-graph-showing-clicks-year-over-year

Favorite feature

One of my favorite reports in GSC is the Indexing report. It’s useful for SEO reporting because you can share the indexed to non-indexed pages ratio in your SEO report.

google-search-console-indexed-pages-reportgoogle-search-console-indexed-pages-report

If the website has a lot of non-indexed pages, then it’s worth reviewing the pages to understand why they haven’t been indexed.

Price: Free

Google Looker Studio (GLS), previously known as Google Data Studio (GDS), is a free tool that helps visualize data in shareable dashboards.

Most common reporting use case

Dashboards are an important part of SEO reporting, and GLS allows you to get a total view of search performance from multiple sources through its integrations.

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Out of the box, GLS allows you to connect to many different data sources.

Such as:

  • Marketing products – Google Ads, Google Analytics, Display & Video 360, Search Ads 360
  • Consumer products – Google Sheets, YouTube, and Google Search Console
  • Databases – BigQuery, MySQL, and PostgreSQL
  • Social media platformsFacebook, Reddit, and Twitter
  • Files – CSV file upload and Google Cloud Storage

Sidenote.

If you don’t have the time to create your own report manually, Ahrefs has three Google Looker Studio connectors that can help you create automated SEO reporting for any website in a few clicks

google-looker-studio-partner-connectorsgoogle-looker-studio-partner-connectors

Here’s what a dashboard in GLS looks like:

ahrefs-seo-audit-dashboardahrefs-seo-audit-dashboard
Ahrefs Google Looker Studio integration

With this type of dashboard, you share reports that are easy to understand with clients or other stakeholders.

Favorite feature

The ability to blend and filter data from different sources, like GA and GSC, means you can get a customized overview of your total search performance, tailored to your website.

Price: Free for 500 URLs

Screaming Frog is a website crawler that helps you audit your website.

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Screaming Frog’s free version of its crawler is perfect if you want to run a quick audit on a bunch of URLs. The free version is limited to 500 URLs—making it ideal for crawling smaller websites.

screaming-frog-user-interface-screenshotscreaming-frog-user-interface-screenshot

Most common reporting use case

When it comes to reporting, the Reports menu in Screaming Frog SEO Spider has a wealth of information you can look over that covers all the technical aspects of your website, such as analyzing, redirects, canonicals, pagination, hreflang, structured data, and more.

Once you’ve crawled your site, it’s just a matter of downloading the reports you need and working out the main issues to summarize in your SEO report.

Favorite feature

Screaming Frog can pull in data from other tools, including Ahrefs, using APIs. 

If you already had access to a few SEO tools’ APIs, you could pull data from all of them directly into Screaming Frog. This is useful if you want to combine crawl data with performance data or other 3rd party tools.

screaming-frog-api-accessscreaming-frog-api-access

Even if you’ve never configured an API, connecting other tools to Screaming Frog is straightforward.

Price: Free

Ahrefs has a large selection of free SEO tools to help you at every stage of your SEO campaign, and many of these can be used to provide insights for your SEO reporting.

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when-to-use-ahrefs-free-tools-across-the-seo-process-illustrationwhen-to-use-ahrefs-free-tools-across-the-seo-process-illustration

For example, you could use our:

Most common reporting use case

One of our most popular free SEO tools is Ahrefs Webmaster Tools (AWT), which you can use for your SEO reporting.

With AWT, you can:

  • Monitor your SEO health over time by setting up scheduled SEO audits
  • See the performance of your website
  • Check all known backlinks for your website
ahrefs-overviewahrefs-overview

Favorite feature

Of all the Ahrefs free tools, my favorite is AWT. Within it, site auditing is my favorite feature—once you’ve set it up, it’s a completely hands-free way to keep track of your website’s technical performance and monitor its health.

If you already have access to Google Search Console, it’s a no-brainer to set up a free AWT account and schedule a technical crawl of your website(s).

Price: Free

Ahrefs’ SEO Toolbar is a free Chrome and Firefox extension useful for diagnosing on-page technical issues and performing quick spot checks on your website’s pages.

Most common reporting use case

For SEO reporting, it’s useful to run an on-page check on your website’s top pages to ensure there aren’t any serious on-page issues.

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ahrefs-seo-toolbar-overviewahrefs-seo-toolbar-overview

With the free version, you get the following features:

  • On-page SEO report
  • Redirect tracer with HTTP Headers
  • Outgoing links report with link highlighter and broken link checker
  • SERP positions
  • Country changer for SERP

The SEO toolbar is excellent for spot-checking issues with pages on your website. If you are not confident with inspecting the code, it can also give you valuable pointers on what elements you need to include on your pages to make them search-friendly.

If anything is wrong with the page, the toolbar highlights it, with red indicating a critical issue.

severity-highlight-ahrefs-seo-toolbarseverity-highlight-ahrefs-seo-toolbar

Favorite feature

The section I use the most frequently in the SEO toolbar is the Indexability tab. In this section, you can see whether the page can be crawled and indexed by Google.

indexability-tab-ahrefs-seo-toolbarindexability-tab-ahrefs-seo-toolbar

Although you can do this by inspecting the code manually, using the toolbar is much faster.

Price: Free

Like GSC, Google Analytics is another tool you can use to track the performance of your website, tracking sessions and conversions and much more on your website.

google-analytics-screenshotgoogle-analytics-screenshot

Most common reporting use case

GA gives you a total view of website traffic from several different sources, such as direct, social, organic, paid traffic, and more.

Favorite feature

You can create and track up to 300 events and 30 conversions with GA4. Previously, with universal analytics, you could only track 20 conversions. This makes conversion and event tracking easier within GA4.

Price: Free

Google Slides is Google’s version of Microsoft PowerPoint. If you don’t have a dashboard set up to report on your SEO performance, the next best thing is to assemble a slide deck.

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Many SEO agencies present their report through dashboard insights and PowerPoint presentations. However, if you don’t have access to PowerPoint, then Google Slides is an excellent (free) alternative.

google-slides-screenshotgoogle-slides-screenshot

Most common reporting use cases

The most common use of Google Slides is to create a monthly SEO report. If you don’t know what to include in a monthly report, use our SEO report template.

Favorite feature

One of my favorite features is the ability to share your presentation on a video chat directly from Google Slides. You can do this by clicking the camera icon in the top right.

share-video-chat-google-slidesshare-video-chat-google-slides

This is useful if you are working with remote clients and makes sharing your reports easy.

Price: Free

Google Trends allows you to view a keyword’s popularity over time in any country. The data shown is the relative popularity ratio scaled from 0-100, not the direct volume of search queries.

Most common reporting use cases

Google Trends is useful for showing how the popularity of certain searches can increase or decrease over time. If you work with a website that often has trending products, services, or news, it can be useful to illustrate this visually in your SEO report.

Google Trends makes it easy to spot seasonal trends for product categories. For example, people want to buy BBQs when the weather is sunny.

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Using Google Trends, we can see that peak demand for BBQs usually happens in June-July every year.

bbq-google-trends-graphbbq-google-trends-graph

Using this data across the last five years, we could be fairly sure when the BBQ season would start and end.

Favorite feature

Comparing two or more search terms against each other over time is one of my favorite uses of Google Trends, as it can be used to tell its own story.

google-trends-comparison-examplegoogle-trends-comparison-example

Embellishing your report with trends data allows you to gain further insights into market trends.

You can even dig into trends at a regional level if you need to.

regional-trends-via-google-trendsregional-trends-via-google-trends

Final thoughts

These free tools will help you put together the foundations for a well-rounded SEO report.

The tools you use for SEO reporting don’t always have to be expensive—even large companies use many of the free tools mentioned to create insights for their client’s SEO reports.

Got more questions? Ping me on X 🙂

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Study Reveals Potential Disruption For Brands & SEO

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Study Reveals Potential Disruption For Brands & SEO

A new study by Authoritas suggests that Google’s AI-powered Search Generative Experience (SGE), currently being tested with a limited group of users, could adversely impact brand visibility and organic search traffic.

These findings include:

  • When an SGE box is expanded, the top organic result drops by over 1,200 pixels on average, significantly reducing visibility.
  • 62% of SGE links come from domains outside the top 10 organic results.
  • Ecommerce, electronics, and fashion-related searches saw the greatest disruption, though all verticals were somewhat impacted.

Adapting to generative search may require a shift in SEO strategies, focusing more on long-form content, expert insights, and multimedia formats.

As Google continues to invest in AI-powered search, the Authoritas study provides an early look at the potential challenges and opportunities ahead.

High Penetration Rate & Industry-Wide Effects

The study analyzed 2,900 brand and product-related keywords across 15 industry verticals and found that Google displays SGE results for 91.4% of all search queries.

The prevalence of SGE results indicates they impact a majority of websites across various industries.

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The research analyzed the typical composition of SGE results. On average, each SGE element contained between 10-11 links sourced from an average of four different domains.

This indicates brands may need to earn multiple links and listings within these AI-curated results to maintain visibility and traffic.

The research also suggests that larger, well-established websites like Quora and Reddit will likely perform better in SGE results than smaller websites and lesser-known brands.

Shifting Dynamics In Organic Search Results

With SGE results occupying the entire first page, websites that currently hold the top positions may experience a significant decrease in traffic and click-through rates.

When a user clicks to expand the SGE element, the study found that, on average, the #1 ranked organic result drops a sizeable 1,255 pixels down the page.

Even if a website ranks number one in organic search, it may effectively be pushed down to the second page due to the prominence of SGE results.

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New Competition From Unexpected Sources

The study revealed that SGE frequently surfaces links and content from websites that didn’t appear in the top organic rankings.

On average, only 20.1% of SGE links exactly matched a URL from the first page of Google search results.

An additional 17.9% of SGE links were from the same domains as page one results but linked to different pages. The remaining 62% of SGE links came from sources outside the top organic results.

Challenges For Brand Term Optimization & Local Search

The study reveals that SGE results for branded terms may include competitors’ websites alongside the brand’s own site, potentially leading to increased competition for brand visibility.

Laurence O’Toole, CEO and founder of Authoritas, states:

“Brands are not immune. These new types of generative results introduce more opportunities for third-party sites and even competitors to rank for your brand terms and related brand and product terms that you care about.”

Additionally, local businesses may face similar challenges, as SGE results could feature competing local brands even when users search for a specific brand in a regional context.

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Methodology & Limitations

To arrive at these insights, Authoritas analyzed a robust dataset of 2,900 search keywords across a spectrum of query types, including specific brand names, brand + generic terms, brand + product names, generic terms, and specific product names. The keywords were distributed across 15 industry verticals.

The study utilized a consistent desktop browser viewport to quantify pixel-based changes in the search results. Authoritas also developed proprietary “alignment scores” to measure the degree of overlap between traditional organic search results and the new SGE links.

While acknowledging some limitations, such as the keyword set needing to be fully representative of each vertical and the still-evolving nature of SGE, Authoritas maintains that the insights hold value in preparing brands for the new realities of an AI-powered search ecosystem.

Why We Care

The findings of the Authoritas study have implications for businesses, marketers, and SEO professionals. As Google’s SGE becomes more prevalent, it could disrupt traditional organic search rankings and traffic patterns.

Brands that have invested heavily in SEO and have achieved top rankings for key terms may find their visibility and click-through rates diminished by the prominence of SGE results.

SGE introduces new competition from unexpected sources, as most SGE links come from domains outside the top 10 organic results. This means businesses may need to compete not only with their traditional rivals but also with a broader range of websites that gain visibility through SGE.

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As Google is a primary source of traffic and leads for many businesses, any changes to its search results can impact visibility, brand awareness, and revenue.

How This Could Help You

While the rise of SGE presents challenges, it also offers opportunities.

Taking into account what we’ve learned from the Authoritas study, here are some actionable takeaways:

  • As SGE favors in-depth, informative content, businesses may benefit from investing in comprehensive, well-researched articles and guides that provide value to users.
  • Incorporating expert quotes, interviews, and authoritative sources within your content could increase the likelihood of being featured in SGE results.
  • Enriching your content with images, videos, and other multimedia elements may help capture the attention of both users and the SGE algorithm.
  • Building a strong brand presence across multiple channels, including social media, industry forums, and relevant websites, can increase your chances of appearing in SGE.
  • Creating a trustworthy brand and managing your online reputation will be crucial, as SGE may feature competitors alongside your website.

Looking Ahead

While the long-term impact of SGE will depend on user adoption and the perceived usefulness of results, this study’s findings serve as a valuable starting point for businesses and SEO professionals.

By proactively addressing the challenges and opportunities SGE presents, you can increase your chances of success in the new search environment.


Featured Image: BestForBest/Shutterstock

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