Friday, October 27, 2006

Traffic or Conversions?

A couple of years ago, when I worked for a search engine marketing and analytics company, I was speaking to a potential client about his paid search engine marketing efforts. He was explaining to me how excited he was that he had just increased the traffic to his e-commerce web site by about 10,000 visitors.

After listening to how he used Google AdWords and Yahoo to improve his ad rankings, I dropped a bomb on him. I explained how great it was that he was getting more traffic, but I finally asked him....

"So what's your conversion percentage for those keywords you bought?"

He said, "My what?"

I said, " Do you know which keywords work well and which ones don't ?"

There was a pause.....he didn't know the answer.

I then asked, "How do you know if the money you're spending with Google and Yahoo isn't being wasted?"

He said, "Because I'm getting a lot more traffic."

I then told him, "Do you realize that you can be spending $0.50, $1.00, or even $2.00 per click on keywords that don't lead to a sale for you? By focusing on the successful keywords (the ones that drive sales) and weeding out the non-successful keywords (the ones that don't drive sales), we can optimize your PPC advertising so that you're left with nothing but keywords that drive sales for your business. We can save you money and drive more sales at the same time."

He said, "We'll, how do I track them?"


The reason why I bring this story up is because many companies are still too focused on driving traffic to their sites and they're not putting enough energy towards improving their conversion percentages (ppc keyword conversion, internal search keyword conversion, site conversion, etc).

Rule #1: Don't assume just because you get more traffic that your leads or sales are going to increase.

The large online electronics company I consulted for had millions of visits per week but their sales conversion % was only around 0.7%. Based on the amount of traffic that this site received, I soon realized that if I could just improve their sales conversion by even 0.1%, then that increase could lead to thousands of dollars in additional earnings for the company. At that point, I began optimizing the web site to improve sales conversion.

This electronics site also had traffic that was increasing month-to-month on their home page. I soon found out that the #1 most trafficked area on the home page was their internal search box. And after digging deeper, I learned that 33% of the internal searches led to a "No Results" page. This of course meant that one third of the internal search keywords being used (by visitors) weren't very effective at converting browsers into buyers. With this information in hand, I began optimizing internal search conversion.

In the examples above, there were two totally different situations where 'conversion' needed to be optimized (sales conversion and internal search conversion). When web analysts talk about 'actionable data', this is what we mean. We're gathering data from the web analytics tool and then taking action to improve low order totals or conversion percentages for example.

Don't get me wrong, we all want more traffic because it means our site is getting visibility on the web. But remember to always keep a very close eye on how well your site is converting on all aspects (online advertising, internal search, etc.). Monitoring conversion and taking action to improve it is the key to a successful online business.

As Eric Peterson once said, " do you know you’re successful if you’re not measuring your success?" You can't put it any simpler than that.

1 comment:

Eric said...


Sometimes "simple" is what works best. Thanks for the kudos.

Eric T. Peterson