What is the Best Source of Traffic for E-Commerce

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If you have then you are not alone.

I can tell you immediately that the most successful e-commerce companies do not rely solely on one or a few sources but invest in multiple sources and platforms to drive and attract potential customers. Doing this makes them more likely to cover the entire Buyers Journey more effectively and encourage repeat business.

I took a look at the data across 23 Irish e-commerce companies, these companies come from different industries and verticals. Some are quite small while others are multinational, so we have a good spread of data to learn from.

Over a 12 month period these companies received over 9.5 Million website visitors and generated almost €22 Million in Revenue.

 

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Let’s first look at how many website visitors each source attracts:

Website Traffic by Source Graph

The data has been adjusted to allow for 60% of Direct traffic reported in GA4 to be considered Organic, as proven by 3rd party experiments.

Looking at the above graph, we can see that certain sources are dominant and ranked as follows:

1: Google Paid drove the largest number of Site Visitors at 30.4%, this includes Banner Ads, Search Ads and PMAX or Shopping Ads.

2: Very close behind in the second spot is Organic traffic with 28.7% as a result of SEO, the vast majority of this traffic comes from Google and the remainder from other Search Engines such as Yahoo, Bing etc.

3: In third place with 16.1% is Social Organic, taken across all Social Media platforms, but predominantly Facebook.

4: Social Paid advertising comes in 4th spot with 8.8% of the traffic.

5: The fifth spot is taken up by Direct Traffic with 7.7% of the overall traffic.

Email and Unassigned attracted 3% and 2.8% respectively.

It’s not surprising that Google and Social Media attract 84% of the total website traffic between them when considering Paid and organic together, but looking at the two platforms separately we see a different picture.

Google Organic and Google Paid attract virtually the same number of website visitors, whereas Social Organic attracts almost twice as many website visitors as Paid Social.

Website visitors are only one part of the equation next we need to look at how much revenue each source generates.

 

 

The purpose of an e-commerce website is to sell products, while website visitors are important we need to look into revenue in more detail.

eCommeerce Revenue by Source.

The revenue by source paints a slightly different picture to traffic by source:

1: Google Paid is the clear winner generating 36.1% of e-commerce revenue across all the sites we examined.

2: Organic traffic as a result of SEO comes in second position with 28.8% of the overall revenue.

3: In third place with 9.4% of the generated revenue is Unassigned traffic, so just because Google doesn’t know where the traffic is coming from doesn’t mean it’s poor quality traffic.

4: in joint third place with 9.4% of the total revenue is Email. Given that Email only attracted 3% of the overall traffic yet it generated 9.4% of the revenue is proof that Email marketing works extremely well and offers an incredible Return on Investment.

5: In fifth place with 7.7% of the traffic is Direct. Direct can be a good source of quality traffic.

And bringing up the rear, we have Social Organic, Social Paid, Referral and Others with 3.3%, 3%, 1.6% and 0.8%, respectively.

Between Social Organic and Paid sources they attracted almost 25% of the website traffic but unfortunately only contributed a combined 6.6% to revenue proving that Social Media is great for Brand awareness and driving traffic to a website but it’s normally quite poor quality traffic.

 

 

We have examined traffic sources in terms of website visitors and revenue individually but we need to look at the figures together to determine the quality of the various sources. We can do this simply by expressing the value as a ratio of revenue to visitors. The higher the ratio the better the quality of the traffic.

1: Google Paid attracted 30.4% of the website visitors and generated 36.1% of the revenue giving it a revenue-to-visitor ratio of 1.19.

2: Organic traffic attracted 28.7% of the traffic and generated 28.8% of the revenue giving it a ratio of 1.

3: Social Organic attracted 16.1% of the traffic but only generated 3.3% of the revenue giving it a ratio of 0.2

4: Social Paid attracted 8.8% of the traffic and generated 3% of the revenue giving it a ratio of 0.34.

5: Direct attracted 7.7% of the traffic and generated 7.7% of the revenue giving it exactly the same value as Organic at 1.

6: Email only attracted 3% of the traffic but contributed 9.4% to revenue giving it a very healthy ratio of 3.13.

7: Unassigned traffic only attracted 2.8% of the overall traffic but also contributed 9.4% to revenue, making it the best quality traffic with a ratio of 3.36. Given the high quality of the unassigned traffic, it could be the result of email campaigns that are not being tracked properly, but given that, we don’t know the origin and the small numbers it’s probably best to exclude this from the results. If we don’t know where it’s coming from we cannot optimise and improve it.

Looking at the above we can agree that Email marketing attracts the highest quality e-commerce traffic, but the small numbers prevent it from being the best overall source of e-commerce traffic.

While the Social platforms attracted 25% of the overall website traffic, they only contributed 6.6% of the revenue making them easily the poorest quality ecommerce website visitors.

Google Organic and Google Paid sources are both excellent at attracting large numbers of site visitors and, combined with positive revenue-to-visitor ratios of 1 and 1.19, respectively, should be considered the best sources of e-commerce traffic. Google Paid traffic just pips Organic to the top spot with better Revenue figures.

We’ve looked at how many website visitors and revenue each source generates and from this we can deduce that Google Paid Advertising is the best source for e-commerce, but is this really the full story?

 

 

Looking at which sources attract the most website visitors and generate the most revenue is great but it only tells a part of the story, more Revenue or Turnover is fantastic, but it only makes good business sense if it’s profitable.

For this exercise, we are going to exclude the cost of labour/expertise in running the various platforms as all of these require some degree of set-up and management, we are interested only in the direct costs involved.

For Google paid advertising, we determined that the overall direct cost was equal to almost 50% of the revenue generated, so for every €2 generated in revenue, it required €1 in advertising spend. I think this figure is a bit high as any company making less than 50% Gross Profit on the sale of a product would be running at a loss.

These figures are mostly likely skewed by Banner Ads because Search Ads and Pmax campaigns normally provide considerably better returns. I have managed campaigns that returned over 1000% ROAS.

Google Advertising Spend vs Revenue graph
Google Paid Ads Revenue vs Costs

 

We don’t have the exact figures for the spending on Social Media advertising, but given the very poor ratio of user to revenue experienced, I cannot imagine that it is much better than Google Ads.

Email Marketing will have a minimal direct cost as the platforms charge according to the size of the database or the number of emails sent per month, but this amount will be very low compared to the almost 10% of total revenue generated by Email Marketing, this makes Email Marketing a highly profitable platform to utilise offering extremely high ROI’s. I wish more e-commerce companies would make better use of this platform.

Although Social Organic doesn’t attract any direct costs, it is very labour-intensive for such low returns meaning that it cannot be considered the best source of traffic for e-commerce.

This leaves us with Organic Traffic, which not only attracts almost 30% of the overall traffic but also contributes almost 30% of the total revenue with zero direct costs. I think this makes it the number one contender for the best source of website traffic for e-commerce.

 

 

I will repeat what I said at the beginning of the article: the most successful e-commerce companies make good use of all platforms and strategies, they are all interdependent. So, while SEO and Organic traffic may be the “Best” source of website traffic for e-commerce websites, it works better when used in conjunction with all the other sources, you will struggle if you are relying on Google Organic traffic only.

It is important to break down the data by platform to monitor and optimise individual performances. It’s a bit of fun to see which platform performs better than others but it’s important to remember that each platform feeds off the other in the buyer’s journey in most cases a customer requires more than one interaction with your brand before making a purchase, sometimes 7-9 interactions are required.

I strongly advise building a legally obtained email list and making use of email marketing, but driving traffic to your site from all other sources helps to build this list faster.

Making good use of Social Media platforms creates brand awareness and drives traffic to your website; these people may join your mailing list or come back later through Organic means to make a purchase. Linking your Social Media platforms on your website will also increase followers.

Driving traffic through targeted Google Paid Ads not only drives traffic and revenue, but it is also directly linked to Organic traffic, people are initially attracted to your website from a Google Ad, but return later through Organic or Direct means to make an actual purchase or perform further research towards making a purchase.

There is a strong correlation between Paid Ads and Organic traffic. I have seen it happen when a company spent 57% less YoY on Google Ads; this caused a corresponding 9% drop in Google Organic traffic and a 72% drop in Google Organic Brand searches for that company over the same period, not to mention a 62% drop in revenue from Google Ads.

Making good use of all available platforms helps to boost the other platforms; in my analysis of the 23 companies, I could see that the more successful and faster-growing companies made use of most if not all, platforms while the smaller ones that were struggling to grow were relying on only one which is normally Google Organic as this is the only source that happens naturally just by having a website, but they weren’t growing because they weren’t performing any SEO activities or driving traffic to their site from other sources.

 

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About Author

Steven Dunlop, ePresence Digital Marketing

Steven Dunlop

Steven has a Diploma in Marketing Management and is a Certified Digital Marketing Expert. He has extensive experience of both Traditional and Digital Marketing, together with strong Sales skills and expertise. Originally from a technical background, Steven has worked in a variety of industries ranging from Telecommunications, Industrial Automation, Electrical, Lighting and Lighting Control and Audio Video but is equally at home working with clients in the hospitality, online training or other industry sectors. Steven prides himself on achieving results beyond his client’s expectations.

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