Oscar Sjöstrand

Get monthly notifications

Does Google Ads cannibalise on organic traffic - A study with Google Analytics data for E-commerce stores

Google Ads | 8 Min

One question I usually get from our clients is “how much traffic does Google Ads take from the organic channel?” This is a concern I can understand that business owners are having, why pay for clicks that you can get in for free? I wanted to find out one time for all, does Google Ads help other channels get revenue or does it “steal” it?

To evaluate and to do this study, I have analyzed many different E-commerce accounts in Google Analytics. The paths that we’re going to look at are only including paths where there has been more than one touchpoint, so if someone for example just writes the URL of your website in the browser and makes a purchase, you will not find it in the report (since it’s one touchpoint before purchase).

In Google Analytics, I can see that the most common path to conversion is Paid Search x 2. This means that someone clicks a paid ad twice before making the conversion. This stands for 2.5% of the total sales during the selected time period. The second most common path to conversion is Paid Search → Direct. This means that someone first finds your website through for example a Google Shopping ad and later comes back through Direct. Although Paid Search x 2 drives in more conversions, Paid Search → Direct drives in more revenue. This part stands for 3.4% of the total sales. This is revenue that you see in your Google Analytics account coming in from the Direct channel, even though the first click was from a paid source.

path-to-conversion

Moving down the list, we find Paid Search → Direct x 2. I’m sure you know how the procedure looks like by now, but just to clarify, someone clicks a paid ad, then coming back direct not once, but twice. This stands for 2.1% of the total sales. We actually also find Paid Search → Organic Search on the top 5 in terms of conversion paths, but this stands for 0.8% of total sales.

A common belief in this industry is that by using Google Ads you’re paying for clicks you otherwise would have gotten for free, and therefore paying for conversions that you could have gotten without paying anything. We actually need to look a bit further down in this report to find the statistics to back that up. Organic Search → Paid Search stands for 0.4% of total sales for this time period. This actually means that the organic channel is getting more sales when paid search is the first point of contact rather than when organic is the first touchpoint followed by clicking a paid ad.

g-ads-and-cannibalism

Here is a total summary of the top 50 conversion paths that has paid involved;

  • Paid → Other Channels stands for a total of 12% of total sales.
  • Other Channels → Paid (cannibalism) stands for a total of 1.5% of total sales.

The conclusion regarding this is that paid search is not stealing revenue from other channels, it’s more likely the other way around. However, the common belief that Google Ads is “cannibalising” on other channels is true, but it only stands for 1.5% of the total sales.

If you want to look in your own account how the different channels are performing, just log in to your Google Analytics account and press Conversions in the bottom left menu. Then on to Multi Channel Funnels and further to Top Conversion Paths. There you have your report on how the different channels are working together.

different-channels-working-together

Did you get the same results as we did? Feel free to drop a comment below and share your insights!

Similar Articles

Get monthly notifications

X
Dec 19, 2018 03:23:42 PM 8 Min No