In the sports shoe example, the TAM could include everyone in the world who buys sports shoes, whether they shop online or in-store.
This overall market might include professional athletes, casual gym-goers, and even occasional joggers, spanning all sales channels like ecommerce sites, retail stores, and third-party marketplaces.
You then also have the fashion and collector markets, who see sports shoes as casual everyday wear or as a monetary investment.
While TAM is more theoretical, it sets the foundation for evaluating the overall potential of your industry.
TAM Vs. SEO TAM
“TAM” represents the total revenue potential if a company captures 100% of its market. “SEO TAM” narrows this to the revenue achievable by reaching all potential customers through search engines.
It represents the potential revenue attainable by engaging all customers who could discover your product via search engines, where their intent aligns with the value of your content or product/service.
I wrote an article exploring the SEO TAM more here.
The TAM Trap
The alignment of your value proposition to what the user is looking for is important, even more so now than ever.
The “TAM trap” in calculating your potential SEO market happens when you assume that everyone who searches a specific keyword shares the same intent.
Keywords can have multiple interpretations; some you would class as having multiple common interpretations, some more dominant interpretations, and others potentially lesser common interpretations.
A number of factors can influence these interpretations, including time of the year and the searcher’s location.
Some common examples involve brands, such as Jaguar: Are people searching for the car, the animal, or the sports team?
A less common example I’ve experienced was a variation of the term “WAF.”
The dominant interpretation of this search term (globally) is Web Application Firewall, but our rank trackers picked up that on Texas IPs, for around a month, Google alternated between our CDN client and the World Apostolate of Fatima church.
This was around the time of a religious festival, so, for a short time, the most prominent interpretation of the queries in that locale changed to users wanting details for the church. This impacted our WAF rankings from the top three to lower page one.
After the two-week period, when the change in demand subsided, the SERP “reset” to reflect the regular interpretations.
This is important to note, as just classifying queries by intent isn’t always enough when estimating audience size – especially when big marquee head terms are involved – as not all 10,000 searches of the query will come from users with the same interpretation, same prior knowledge levels, or same end-intent.
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