In his tutorial from May, Jay gives estimates for earning with a keyword. So here is what he gives:
And here are the faces of the audience when they hear such a low value:
I am going to argue here that the reality is much worse. How I know? I apply it on my own sites, and so can you too.
1. Searches are rarely so high, instead of 1000 realistically it is below 100. His own examples show that; "football snack helmets" are with 64 only, and one of his helmets "baltimore ravens football helmet" is with only 72 monthly searches.
Note, we go after long-tail keyword, so naturally searches are lower. So take 1/10 of his value (at best). This is 100.
2. Commission rate on Amazon is always below the assumed value, but OK keep this as it is, Amazon is not the only one.
3. He speaks about 17% of traffic if you are ranked on the top position (or within the top 3). But how many people can count on the ranking positions 1-3, and for how many posts?
4. Further, the mentioned 2% conversion rate. This is too high. Say you have 10% click on links rate, and 10% of these who click will buy something. These are very high numbers in both cases. The result is that 1% of visitors will buy something. Realistically, it is probably lower, say 0.5%.
So here are my results:
a) $100 value of the item. This is probably close to my stuff.
b) Commission rate 10% gives $10.
c) 100 people searching for the keyword (instead of 1000).
d) 17% of them come to your site. This is 17 people out of 100 who search for the keyword.
e) 1% "convert", which means 0.17 people.
f) Monthly Keyword Profit is b) multiplied by e). This gives $1.7 or even half of it for Amazon commission rate.
When I apply these numbers to my 2 sites with 30% and 15% posts ranked in the top 3 in Google, I get that they are too-pessimistic roughly by a factor 5. So the value should be around $7 - $8.
But remember, there are also other posts, in fact the majority, that are not top-ranked and that are not included here. They also may bring some traffic and bring me closer to my own values of $7 - $8 (but not much closer).
So my own case is 5 times above my estimate, and it is 4-5 times smaller than Jay's estimate, it is roughly half-way in between the two estimates.
So the bottom line is: it is terribly hard. You need a lot of stuff, hundreds or thousands of posts, and many of them top ranked. My own ranking is very strong and yet the results are not so great. Check your own.