Table of Contents
- Is SEO Important for eCommerce
- What did we do?
- Is SEO alone enough for eCommerce?
- SEO as a source of eCommerce Traffic
- SEO as a Source of eCommerce Revenue
- The Profitability Comparison between Google Paid and Google Organic Traffic in eCommerce
- Profitability of Google Paid Ads in eCommerce
- The Profitability of Organic Traffic in eCommerce
- Other Benefits of Good SEO for eCommerce
- Amplifying Organic Traffic
- Cost-Effective Marketing Strategy
- Enhanced User Experience (UX)
- Building Credibility and Trust
- Improved Conversion Rates
- Leveraging Local SEO
- Staying Ahead of the Competition
- Gaining Valuable Insights and Analytics
- Sustainable Long-Term Growth
- Is Organic the Best Source of Traffic for eCommerce
Is SEO Important for eCommerce
In an earlier article we asked the question, Is SEO Dead? We believe that SEO is still going strong and is a vital part of all Digital Marketing Strategies, but what about SEO for e-commerce, is SEO still important for e-commerce today?
We thought we’d take a look at the data.
The results are extremely interesting.
What did we do?
We took a deep dive into the data of 23 Irish e-commerce companies from various verticals ranging in size from the very small to the Multi-Million Euro corporates. Most of these companies are 100% eCommerce while a few have eCommerce as a part of their business, so we have a wide spread of companies, product or service types and different target markets from which to obtain an overall picture.
The data is taken over 12 months to allow for any seasonality or other peaks and troughs and covers 9.5 million website visitors who generated almost €22 million in sales.
For this article, we are looking primarily at Organic SEO traffic vs Google Ads traffic as the two big players in eCommerce, but we have also included many other sources to provide a more comprehensive comparison.
Is SEO alone enough for eCommerce?
It was quite surprising to discover that quite a high percentage of eCommerce companies, 35%, are reliant on SEO as their primary or only source of attracting potential customers. These are generally the smaller companies that may not have the budget for paid advertising or are content with their current situation.
These companies all fall under € 50,000 per year in revenue and combined make up less than 2% of the total revenue of all the companies analysed. This would imply that while SEO is a vital part of an eCommerce Digital Marketing Strategy it should not be relied on as the only strategy to attract business. The truly successful eCommerce companies are the ones that leverage every possible source to attract and drive potential customers to their websites.
SEO as a source of eCommerce Traffic
For this article, we are primarily interested in Organic traffic that is driven by SEO which in our sample, taken from GA4, drives 17.2% of all the website visitors but we thought it would be interesting to compare it to other sources, particularly Google Paid advertising which includes Search, Shopping campaigns and Display ads.
Based upon the data Organic traffic is the third largest source of website traffic coming in behind both Google Paid and Direct and narrowly beating Social Organic into fourth position. Now you might think that that’s not all that impressive, but there is one more very important fact we need to take into account.
We all know that GA4 is not exactly 100% accurate and doesn’t always report where visitors come from when they arrive on a website. This traffic is often considered “Direct”.
Groupon performed a very brave experiment where they completely de-indexed their website to reduce Organic traffic to zero, this also resulted in a 60% drop in Direct Traffic meaning that 60% of traffic being reported as Direct is in fact Organic.
Allowing for this anomaly in reporting let’s take a look at the figures again. If we take 60% of Direct Traffic and apply it to Organic sources then Organic traffic jumps into a very strong second position close behind Google Paid traffic and Direct traffic plummets to a distant fifth position below Paid Social.
SEO as a Source of eCommerce Revenue
While driving or attracting website visitors is important in eCommerce it’s all about sales – What is driving Revenue?
Before allowing for 60% of Direct traffic as Organic the big three revenue generators are:
- Google Paid 36.1% of the Revenue.
- Direct at 19.1% of the Revenue.
- Organic at 17.3% of the Revenue.
However, allowing for the reporting anomaly in Direct traffic and shifting 60% to Organic the results are very different:
- Google Paid at 36.1% of Revenue
- Google Organic with 28.8% of the revenue
- Unassigned and Email tied in third position with 9.4% of the Revenue
- Direct with only 7.7% of the Revenue.
There’s still more to the story, you would be mistaken for thinking that’s it – Google Paid is the best source of both traffic and Revenue and is thus the clear winner!
But revenue is turnover and turnover is not the most important financial barometer, there’s the old saying “Turnover is Vanity – Profit is Sanity – Cashflow is reality” In eCommerce cash flow is not a major concern as you are paid on order, you’re not waiting for payment so as long as the stocks levels are managed properly we can ignore cash flow in this article and concentrate on Profit as an important metric.
The Profitability Comparison between Google Paid and Google Organic Traffic in eCommerce
Profitability of Google Paid Ads in eCommerce
While Google Paid Advertising platforms such as Search, PMAX and Display are great tools for attracting targeted visitors to your website and driving sales they do come with a corresponding cost. We were able to obtain a fairly accurate cost of how much these companies were spending on Google Ads and compare it to the total revenue generated by these platforms.
The results were a little shocking.
Only slightly over €2 in revenue is being generated for every €1 in advertising spend. This is quite a low Revenue to Cost ratio meaning that unless these companies are making at least 50% margins on their products they are making a loss. Suddenly the figures for Paid Advertising don’t look so attractive.
The Profitability of Organic Traffic in eCommerce
Let’s take a look at the profitability of Organic SEO traffic.
It’s a little more difficult to track exact costs in SEO so what we did is we took known costs for some companies and averaged them out between all the companies and just to make sure we aren’t underreporting we doubled the total figure.
For every €1 spent on SEO very close to €44 in Revenue is generated, even if we multiplied the costs of SEO by 10 it remains, not only the second largest source of Revenue but a highly profitable source of income.
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Other Benefits of Good SEO for eCommerce
In the competitive world of eCommerce, search engine optimization (SEO) is the unsung hero that can significantly impact your online store’s success. As an e-commerce manager, understanding and implementing good SEO practices is crucial for maximizing your site’s visibility, traffic, and revenue. Let’s dive into the comprehensive benefits of good SEO for your e-commerce website.
1. Amplifying Organic Traffic
Organic traffic is a cornerstone of sustainable growth. By optimizing your site with relevant keywords and phrases, you ensure that your products appear in search results when potential customers are looking for them.
2. Cost-Effective Marketing Strategy
Compared to other marketing tactics like paid advertising, SEO is highly cost-effective. While pay-per-click (PPC) campaigns require ongoing investment, the efforts you put into SEO can yield long-term benefits. Quality content, optimized product descriptions, and strong backlinks continue to drive traffic without additional costs.
3. Enhanced User Experience (UX)
Good SEO practices go beyond keywords and rankings; they also improve user experience. A well-structured, mobile-friendly site with fast loading times keeps visitors engaged. Search engines reward sites that provide a superior UX, which boosts your rankings and leads to more traffic.
4. Building Credibility and Trust
Websites that rank high on search engine results pages (SERPs) are perceived as more credible and trustworthy. This credibility is crucial for e-commerce sites, where customers are often wary of online transactions. By consistently providing valuable content and earning quality backlinks, you can establish your site as an authority in your niche.
5. Improved Conversion Rates
SEO not only drives traffic but also attracts the right kind of visitors. By targeting specific keywords and creating content that addresses your audience’s needs, you increase the likelihood of conversions. These visitors are already interested in your products, making them more likely to make a purchase.
6. Leveraging Local SEO
For eCommerce businesses with physical locations, local SEO is invaluable. Optimizing your site for local searches ensures you appear in local listings and maps, driving foot traffic to your store. This can significantly boost both online and offline sales.
7. Staying Ahead of the Competition
In the competitive ecommerce landscape, staying ahead of competitors is crucial. By regularly updating your SEO strategy and keeping up with industry trends, you can ensure your site ranks higher than your competitors. This competitive edge helps capture a larger market share and positions your brand as a leader.
8. Gaining Valuable Insights and Analytics
SEO provides a wealth of data that can inform and refine your marketing strategies. Tools like Google Analytics offer insights into keywords, user behaviour, and conversion rates. This data helps you understand what works and what doesn’t, allowing you to make data-driven decisions that improve your ROI.
9. Sustainable Long-Term Growth
One of the most significant benefits of SEO is its potential for sustainable long-term growth. Unlike short-term marketing tactics, SEO builds a solid foundation for continuous traffic and revenue growth. Consistently producing high-quality content and earning backlinks ensures your site remains visible and relevant in the ever-evolving digital landscape.
Is Organic the Best Source of Traffic for eCommerce
In a nutshell – Yes SEO is the best source of eCommerce traffic, SEO not only attracts large numbers of site visitors, but it is also a highly profitable source of revenue.
However, to achieve true success in today’s highly competitive eCommerce industry players need to adopt a multi-source approach. SEO and Organic traffic by itself is not enough. SEO works best when it is combined with other sources that complement and support your SEO efforts.
It is very difficult to grow an eCommerce business at scale relying on Organic traffic alone, while SEO is a great source of traffic and revenue eCommerce is spend-driven. Companies that depend wholly on SEO for eCommerce tend to be small and stay small.
SEO plays a crucial role in the buyer’s journey as potential customers may initially be attracted to your website by an advert in a paid campaign but return later via organic means to make a purchase. There is a direct correlation between Paid Traffic and Organic traffic, the two work together to amplify each other.
If you are not getting the Organic traffic you should be getting on your eCommerce store then give us a call, we’ll be happy to help.
