Google says that the Competition tab describes how competitive the paid placement will be. Is it also a good indicator of how difficult it will be to rank for this keyword as well?
The simple answer is 'yes' but it is not the complete answer.
As you rightly highlight, the 'Competition Tab' is an indication of how difficult it would be to 'rank' for the search engines' Paid Listings (PPC).
Ranking being assigned based on each bidders' sum of:
Cost Per Click Bid x Quality Score = Ad Position
Volume of Bidders
Simply put, the 'Competition Tab' is an indication of how many bids a particular Keyword is receiving.
- Low: Not many
- Medium: Fair few
- High: A lot
Pretty straight forward.
How does this help?
As far as insights go, that is as far as the 'Competition Tab' metric goes. Furthermore, said tab is specific to Paid Listings and not Organic Listings. As such, it's scope if limited with SEO.
That said, it does help us to answer the following question:
How popular is this Keyword?
The answers being …
- Not popular
- Fairly a popular
- Very popular
These are very broad answers and doesn't give us any quantitative answers; but it is still useful. Just ensure that you use this metric, early on in your Keyword research, rather than during the concluding phases. Look at this metric as a means to 'weed out' potential Keywords rather than being central to your Keyword Research.
How is this useful?
Once you have established your Keywords, and their popularity (competitiveness), the next question you could ask yourself is:
Why is this Keyword popular?
When an organisation invests in Paid Listings, they are looking for some kind of return. Unsurprisingly, the overriding return would be financial. After all, there is only so much time you can continually invest in a loss campaign. Returns can be delivered in many forms. To name a few …
- Brand Awareness
- Phone Calls
- Lead Generation Forms
If a particular Keyword is Highly Competitive, across the Paid Listing platform, then we can assume that the Keyword is:
- Delivering a positive Return on investment.
How can we make this assumption?
Simple … If the Keyword delivered poor returns on investment, then organisations would eventually stop bidding for the Keyword. This would then reduce its 'Competition' metric from High to Low.
The simply answer to "Why is this Keyword popular?" is ...
Because, in some capacity, the Keyword is delivering a positive return on investment. Such a return on investment, is allowing us to keep our Campaign(s) running, in our efforts to meet our campaign objectives.
SEO v PPC Competition
Broadly put, there are 2 types of Advertisers within the Paid Listings:
- Those who are not organically ranking for the Keyword
- Those who have achieved high organic rankings but want to ‘eat up’ more screen space
Let's assume you want to target a highly competitive Keyword, according to a search engine's Paid Listing 'Competition' metric. You know it is competitive across the Paid Listing platform but what about organic listings?
Here, we ask ourselves:
Why would an organisation invest time and money in a Paid Listing but not in organic listings?
After all, organic listings produce free* traffic whilst paid listings can be quite expensive; especially for high commercial intent Keywords. So much so, Paid Listings are often out of reach for many people/organisations.
The bottom line is, if Paid Listings are generating a positive return on investment, wouldn't you want to try and rank well organically?
The broad answer here, is:
Regardless of who you are, you will want to compete for Keywords, which deliver a positive return on investment. Those with a budget, will want to compete with Paid Listings as well as organic listings. Those without a budget for Paid Listings, will also want to compete for the same Keywords. Since they lack the budget for Paid Listings, their only option is organic listings.
A search engine's Paid Listing 'Competition' metric is not an SEO metric, it is purely for their Paid Listings. That said, it does give an indication of a Keyword's return on investment, based on how many organisations want to bid for the Keyword. A bid is basically saying ...
This is a valuable Keyword, potentially worth competing and paying for.
If a lot of organisations are willing to compete and pay for a Keyword, why would that level of competition not transfer to the 'free listings'?
When performing your Keyword research, for organic listings, use the Paid Listing's 'Competition' metric as a means to 'weed out' target Keywords with high commercial intent, rather than during the concluding phases of your Keyword Research.
*I say free, loosely. Sure, you do not pay for any clicks, within the organic listings, but you need to invest a lot of time to rank well in search engine's organic results. It can also cost money, in bringing on board an SEO professional.