Chris Middings, web editor at Seventh Generation, tipped us off to an interesting new study from EngineReady. A two year research product capturing data from 27 ecommerce websites, the report is titled "SEO vs. PPC -- The Final Round." The basic methodology was tracking the dollars of business transacted by each of four traffic sources, and averaging that value on a per-visitor basis. As the report's title suggests, the project aims to resolve the question of whether paid-search visitors are "worth" more or less than visitors entering a site from free, "organic" search.
The study doesn't really succeed in answering that question, in my opinion. But first, here are the dollar values per visitor segment reported by Engine Ready:
Obviously, visitors typing your specific URL or choosing a bookmark from their browser favorites are your most qualified customers of all -- people already familiar with your brand, perhaps they are repeat buyers. Or their interest in your URL has been driven by some offline advertising, such as your direct-mail catalog, television or radio ads. That they represent the highest value-per-visitor is no surprise, and we see the same results among Timberline clients.
EngineReady doesn't explain why "Other Referring Sites" rank so valuably, merely offering that it shows the importance of "link building" above and beyond its SEO benefit. But I think the study's authors largely missed the point here: For many ecommerce merchants, "referring sites" are dominated by two sources:
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Affiliates (assuming they have an affiliate program)
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Recipients of your email newsletter who use web-based email clients like Gmail, Hotmail, etc.
Neither of these are "link building" for SEO purposes. Both will be made up largely of qualified visitors -- people responding to your loyalty email program, or (since so much affiliate traffic is driven by brand-name searches) people stumbling through an affiliate site on their way to find your site. If that's the case, it's no wonder "Referring Sites" yield a value not far off from Direct Entry.
Another omission, to anyone who has done a lot of online marketing, is the failure to segregate brand and non-brand terms in the Paid and Organic buckets. We all know that your brand name performs worlds differently than generic terms. The latter bring you new customers and incremental business, but usually at a conversion rate below your existing customers.
Inspired by EngineReady's research, I took a cross section of Timberline clients and ran the math, but I went the extra yard and segregated the SEO traffic by brand and non-brand terms. Here are my results:
Direct Access: $8.24
Other Referring Sites: $2.46
Paid Search: $4.34
Organic Search (all): $4.24
Organic (brand name only): $9.23
Organic (non-brand): $2.15
Why do Timberline clients differ from EngineReady's numbers? I believe it's because:
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Many have strong brand names within the niches they occupy
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Relatively few have robust affiliate programs
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Many have significant non-commercial content like recipe, articles, blogs and community features
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We do a good job managing paid search programs to high ROI :)
All in all, though, EngineReady's research is compelling, and makes good food for thought. check it out at http://engineready.com/company/trafficstudy.html
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