Traffic and Conversions: When More Isn’t Better
Recently I’ve been digging deeper into analytics for some of our clients. Analytics can feel a bit overwhelming sometimes – there are so many dimensions to delve into, all of which tell a slightly different story. Lately, I’ve been very interested in demographics and referral data – that is, what type of people are visiting a site, and where are they being redirected from? Combining these metrics and comparing the quality of the traffic from each demographic and source yields interesting results. You may find that a place you receive lots of traffic from isn’t doing as much for your business as you may intuitively believe it is. Let’s take a closer look.
Analytics Terms: A Refresher
First, let’s go over what some of the basic analytics/online marketing terms mean, in case you’ve forgotten. One of the most key metrics we look at is bounce rate. Bounce rate is the rate, measured in percent, at which traffic bounces, or leaves your website after viewing a single page. For many companies, this is critical information. If you’re selling a product online and your prospective customers click away after a single page, there’s a 0% chance you’ve made a sale, as they can’t have possibly viewed and purchased a product without reaching another page. In many cases, bounce rate determines what percent of your traffic may become customers, and what percent is effectively wasted.
Second, let’s talk conversions. Conversion rate is the rate at which you ‘convert’ a user into a customer or lead. A conversion can be many things: for blogs and informational sites that rely on ad revenue, it can simply be staying on a page for a pre-determined amount of time. For most businesses, however, it’s a little more tangible. Conversions are usually set to record either sales or signups, whether it’s for a newsletter, an account, or even a contest or giveaway.
Finally, there are a few important stats that need little explanation. For instance, session duration tells you all you need to know in its name: it’s the length of time the average ‘session’ on your website lasts. Likewise for pages per session and new users.
Two Types of Traffic
Across all demographics, across every metric possible, there are two kinds of traffic: traffic that converts and traffic that doesn’t. That seems a bit obvious and over-simplified, and that’s because it is. However, it’s still an important consideration. Should you care if you get a million visitors a month if 0% of them actually turn into conversions?
That’s not likely to happen, but as a thought experiment, what is that worth? On one hand, a million visitors a month suggests you’ve built impressive brand awareness. Maybe this user group refers a lot of people to your business, or spreads your brand by word of mouth. Maybe you’re able to leverage those users into ad revenue. On the other hand, you’re spending money on huge servers to accommodate a million non-customers. Wouldn’t you rather have a thousand customers a month that all purchase something?
While you’ll never see such extremes in reality, you might be surprised where your best customers are referred from. For instance, let’s say you’re active on social media. You’ve got active accounts with user engagement on Facebook, Instagram, Pinterest, and Twitter, and the views to your website are rolling in. Despite all these views on the front page of your analytics panel, your conversion rate remains stubbornly low – for the sake of argument, we’ll say 1% of your 10,000 monthly visitors are converting. That’s 100 sales a month. On the surface, this could feel like a hopeless cause. You’ve got the traffic without the traction.
Dig a Little Deeper
To use a well-worn analogy, analytics data is like an iceberg – what you see on the surface doesn’t represent the bigger picture very well. If you look further into your demographics, sources, and referrals, you might find the solution to improving that conversion rate.
Let’s say you spend most of your social media energy and budget on Instagram. It’s your favourite platform, your product looks great in pictures, and you’ve got lots of followers there. Try taking a look at your analytics panel under the ‘Acquisition’ tab. You may be in for an unpleasant surprise.
Sometimes, the thing that makes the most intuitive sense isn’t the right thing to do. You may love Instagram, and get lots of traffic from it, but if that traffic has a bounce rate of 75%, you’re only really getting 25% of that traffic to potentially convert. Of course, you probably won’t ever get 0% bounce rate (if you do, your analytics might be broken) but if all your other traffic sources only bounce at 30%, you might be wasting your time on a demographic that just doesn’t care to purchase anything from you.
A Quick Example
Let’s go back to our 10,000 user, 1% conversion rate example. Pretend Instagram accounts for 4,000 visitors a month, 3,000 of which are new. 75% of them bounce, so effectively you are receiving 1,000 potential leads. Additionally, you check your conversions from Instagram. They’re only 0.8%. You’re getting 8 leads a month from the social media platform you spend the most time and money on.
Now, you look at the next biggest referrer. Maybe it’s Twitter. You spend some time here, but it isn’t your focus. You get 2,000 visitors a month, 1,000 of which are new visitors. However, it only has a bounce rate of 30%! That’s 1400 visitors a month who may convert, 400 more than from Instagram, despite having half the total traffic. Not only that, visitors from Twitter are converting at a slightly higher 2%. That’s 28 leads per month on average, 3.5 times more than Instagram.
When you dig further into the data, you see that some referrers have largely ‘bad’ traffic, while a few referrers bring in less, higher quality traffic. When you remove Instagram from the equation, you end up with a 55% bounce rate and 2.1% conversion rate. Not amazing, but pretty solid compared to your pitiful 1% overall.
The Bottom Line
So, it seemed from the surface that our example business had an across-the-board terrible conversion and bounce rate, but there was a wild variance in quality from different traffic sources. By spending more energy on the high quality, low volume traffic sources and less on the high-volume, low quality sources, you may be able to boost your overall conversions significantly. But that’s just an example. Is this a realistic scenario? Yes and no.
I have absolutely encountered this phenomenon of one social network bringing in far more traffic than any other source while producing fewer leads. I’ve also encountered the more predictable demographics differences, where a business appeals almost entirely to a fairly specific demographic (say, affluent males aged 25-35). Even the level of disparity in traffic quality is fairly realistic. The caveat I offer is this: marketing isn’t a simple equation, where you can boost traffic from one referrer and expect your bounce rate and conversions to keep pace with the increased overall traffic. Instead, you’re likely to see the performance increase shrink as overall traffic grows. Why?
It’s pretty simple. You’re broadening the scope of your campaign. As your targeting gets wider, you may get more traffic. Inevitably, if nothing else changes except your volume of posts and investment in advertising on one platform, your message will reach more people, but some of those people are unlikely to become customers. You’re watering down the potency of your follower base. In order to keep pace with (or improve) your current conversion rate from a given referrer, you need to target strategically and grow your traffic in the right demographics. It’s a big balancing act.
Hey, did you know we do cost-per-click and social media advertising? We even do marketing strategy, SEO, and analytics tracking. If you want to boost your conversion rates, drop us a line. We might be able to help.