Analytics & Data

How Traffic Sources Impact Online Sales

How an online shopper finds a product or store impacts conversions. Thus optimizing for sales might start well before a prospect reaches a product detail page.

Conversion optimization is complicated, as the authors of “Leading Online Shoppers to the Finish Line,” a 2023 Shopify and Boston Consulting Group study, found. For starters, ecommerce merchants use varying attribution methods and buyer-journey definitions.

For example, conversion optimization typically focuses on the checkout but differs on, say, page 1 or page 3. Some methods include mobile-first payments, while others don’t.

To be sure, the checkout process is the most significant in an ecommerce conversion. But it’s not the only driver of sales.

Traffic sources — i.e., paid versus organic search — impact conversions and provide top-of-the-funnel insights.

Organic and Paid

Most online shops employ both paid and organic traffic to attract potential customers. But which one works best?

The channels can have vastly different costs per conversion. Marketers generally disagree on which source — organic or paid — works best.

Part of the disagreement stems from a marketer’s economic interest. For example, an article published in March 2023 on a site that sells paid search tools cited a 2009 guest post — yes, 14 years old — from Moz stating that paid search converts 35% better than organic. This dated citation implies search engine optimization isn’t important or effective.

More recently, the Boston Consulting Group study, which considered sales data from more than 220,000 ecommerce stores, concluded that organic traffic sources in general — think search, social, and word-of-mouth — outperformed paid traffic sources.

Your business should likely use both but not mindlessly. Understand how traffic sources interact and work together to drive sales.

Traffic Measurement

Many if not most ecommerce conversions stem from multiple shopper interactions, whether it’s first-time or repeat buyers.

Regardless, optimizing traffic sources starts with measuring and analyzing. It requires capturing information to understand how the source impacts sales.

Photo of a laptop computer with bar graphs on the screen

Optimizing traffic sources starts with measuring and analyzing.

Segment conversions by traffic source. Track the traffic source for each sale. Use a first- or last-touch attribution, but keep all the touch-point data along the buyer’s journey. Experiment with multiple attribution periods, such as 28, 14, or 7 days.

Your traffic segments could be:

  • Direct,
  • Referral,
  • Organic search,
  • Paid search,
  • Organic social media,
  • Paid social media,
  • Other advertising,
  • Affiliate marketing,
  • Email marketing,
  • Direct mail.

Measure conversion rates by customer type. Building on your traffic segments, track new versus repeat customers. For example, how many returning customers query Google for your store’s brand or products and then click your ad in search results to reach the store?

Get some form of multi-touch attribution. Merchants should measure how traffic sources work together and how customers access the various channels before purchasing. For instance, a customer might first come through a social media ad, then return to sign up for the newsletter, and finally convert after clicking an email offer.

Track micro-conversions. A newsletter subscription is a micro-conversion that impacts future sales. How more or less likely is a prospect to buy if she is an email subscriber?

Monitor customer cohorts. Assemble the metrics above and build customer cohorts to analyze over time. Pay attention to each cohort’s average order value, lifetime value, and return on investment.

Use What You Measure

Use the traffic-source info to make marketing and operational decisions. Here are examples.

  • Planning. If email marketing leads to more repeat sales, find ways to get more subscribers. Or if organic search traffic converts higher, emphasize SEO.
  • Allocating budget. If the goal is new customers, invest in paid social if it drives more of those buyers.
  • Changing offers. If new customers from paid social have a lower average order value, bundle or upsell products.
  • Respond to cohorts. If a cohort, such as repeat customers from direct traffic, has higher lifetime values, try to replicate the journal of those shoppers.

Finally, iterate. Continue to measure and tweak the relationship between traffic sources and sales. Did your data-driven decisions last month have the expected outcome? Are changes necessary?

In short, traffic sources shape conversions. Tracking those sources and their impact is vital for ecommerce conversion optimization.

Armando Roggio
Armando Roggio
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