What is Traffic Value


Hi guys, and welcome to another edition of Zupo's SEO Talk and Tea. 

Today's conversation, what is traffic value? Traffic value is something that I want to talk about today. It's included in a lot of SEO softwares and a lot of companies use it as part of their reporting, and just day-to-day SEOs. I do want to talk a little bit about what it is today, but before we begin, I want to introduce the team we have today.

Today we have a Pu'Er tea that was gifted to me by my grandmother, and I drink this probably the second most of all the teas. Pu'Er tea, again, is a fermented tea that has this dark liquid when you brew it. It's almost like black coffee color. It doesn't taste like black coffee, but it's probably my second favorite tea now. It's become a recurring guest. But let's go ahead and get chatting.

So what is traffic value? So, traffic value is this metric that you'll see in a lot of SEO software that will say, okay, you rank for this many keywords, and the value of ranking for this keyword is this monetary amount. And I for a long time did not understand what that was. I didn't even know how it was calculated. And only about a year or two ago, probably last year, did I figure out what it was calculated. And the calculation of traffic value is how much money it would cost you to spend on paid ads to rank for those same keywords. So the thing to not confuse is, traffic value is not the estimated value of the traffic coming to your website, because that is really ambiguous. Because depending on your business, it can be very different things. If you sell a big ticket item or a low ticket item, the traffic value will be very different.

So saying all of that, what traffic value does measure, again, is the value of the alternative paying for paid ads or search ads to rank for those same keywords. And so that's what traffic value is. Now, here's where I'll do a little bit editorializing, is that a lot of firms do use traffic value to validate to their clients why the SEO is doing a great job. I haven't gotten there just yet, because one, I'm not in love with the traffic value metric. I don't think it's always the most accurate. And the second, I think traffic value will show a client like, "Oh, this is how much money it would have cost you to run ads with the same keywords," but it doesn't really communicate to the client, "but this is worth it."

To me, I think there is a little bit of a separation between, "Yeah, it would have cost you this much to pay ads to rank for the same keywords." And that's great, but it doesn't mean that the keywords still makes sense, if you understand what I mean. So what I'm talking about is, at the end of the day, the most important SEO metric is the business getting more traffic that's leading to more conversions, and then getting more business. That's the most important. And I may change my mind in the future. This is something that I feel like I'm willing, I'm happy to... Please email or comment your opinion on this. But at this point I would encourage you, don't get too confused by traffic value. It is not the value of what your SEO is bringing to your business in terms of sales. It is just the parallel alternative to how much you would have had to spend on PPC to get the same rankings for those same keywords.

So, that's kind of the way that you would use it. A lot of firms do use it though to validate to clients that their SEO is paying off. Because, "Hey, look how much money you would have to spend on ads. But you didn't have to spend that money on ads, because you just spent it on SEO and this is how much money you're saving." That's how a lot of firms use it. I haven't used that just yet because I'm a little bit more focused on traffic to the site and conversions. But the point is of this video, not to tell you which one's better or worse, I just want you to understand the traffic value metrics. So if you decide to use it for your own internal understanding or your own reporting, understand what it truly means before you start telling... Or yourself or anybody else like, "Oh, this is the value of SEO in terms of the sales we're getting," because that's not what that traffic value metric means. I think a lot of people think that, and I want to film a video to clarify that today.

But I'm going to go ahead and cut the video there. It's a pretty short video, just a quick explanation. As always, look up the definitions also on the software's themselves. SEMrush, [HRS 00:04:06], and the other tools out there. They'll have better definitions. I'm always very unacademic with my definitions. I just kind of tell it how I understand it. But if you guys found the video valuable, please like and subscribe. And I hope to see you guys again soon.

Thanks everybody.

Jason Khoo

Jason is founder and CEO of Zupo, which is an Orange County based SEO consulting agency helping construct powerful long term SEO strategies for our clients. Jason also enjoys multiple cups of tea a day, hiding away on weekends catching up on reading and rewatching The Simpsons for the 20th time.