Oscar Sjöstrand

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Do Google Ads cannibalize organic traffic - A study with Google Analyticsdata for e-Commerce stores

Google Ads | 8 Min

A primary query that most clients pose is – “how much traffic will Google Ads thieve
away from organic channels in general.”
This happens to be a major concern for most business owners. Why pay for
something you can get done for free?!
We aimed to figure out that very same puzzle. (You’re welcome!)
Is Google Ads, the Robin Hood to other organic channels or does it take away from
them and keep to itself?
That is the question!
To complete a successful attempt at understanding this enigma, several e-
Commerce accounts were put through Google’s Analytics grinder.
The resulting outcomes are what we will expound upon in the following document.
Bear in mind though, we are talking about accounts that have had more than one
touchpoint.
So, if a client were to hypothetically, punch in the URL to your portal and purchase
some of your ‘merch’, (nice bubble) you aren’t going to find them in the reports we’re
touching upon in this article.
The most common path taken by clients who utilize Google Analytics is that of paid
search x2.
In lame speak, if John/Jane Doe were to click on a paid ad twice before making a
purchase, it would account for 2.5% of the total sales, during that respective period.
The second most common path to conversion is that of a client approaching your
business directly.
As in, if Mr. or Ms. Doe stumbled upon your website by way of a google shopping ad,
and upon learning of your company’s existence, were to come back to said portal
and make a purchase – this would result in a ‘direct sale.’
Although paid search x2 amounts to more conversions, paid search (direct) accounts
for higher revenues.
By how much you ask?
3.4% of the total sales.
And, through Google Analytics, this is flagged as a direct conversion, irrespective of
the fact that the client first found your business through a paid source.path-to-conversion

With further progression down the depicted image, it has been found that paid
search results in direct x2.
You get the gist as to how we got there.
If not, what we’re stating is that, despite a prospect clicking on a paid ad, they ended
up arriving at your portal ‘directly’ not once, but twice.
This accounts for 2.1% of the total sales.
We also found that paid search results in organic search. Slotting itself among the
top five positions.
But it only accounts for 0.8% of the total sales.
The belief that by using Google ads, you’re paying for clicks that you would have
secured for free, and hence the assumption that you’re paying for conversions that
would have been achieved without a penny being spent.
The truth is that you must examine the report thoroughly get the whole picture.
Organic search through paid search accounts for 0.4% of the total sales.
What this means is that organic pathways generate more sales when paid search is
the first point of contact rather than when the organic route is the first touchpoint that
is followed by the clicking of a paid ad.

g-ads-and-cannibalism

Here is a summary of the top 50 conversion paths where paid ads were involved:

  • Paid → Other Channels accounts for 12% of total sales
  • Other Channels → Paid (cannibalism) accounts for 1.5% of the total sales

To conclude - paid search isn’t thieving potential revenue from other respective
channels.
In fact, it’s the other way around.
However, the belief that Google ads are ‘cannibalizing’ on other channels, is true, to
a degree.
But that amounts to a mere 1.5% of the total sales.
A drop in the ocean.
If you’re curious about how the other respective channels for your business are
performing, then follow the given map - log on to Google Analytics, access the
conversions column located on the bottom left.
Once there, go to Multi-channel funnels and then to top conversions.
You will find the report you seek there.
different-channels-working-together

If you have any difficulty doing so or have other related queries, don’t hesitate to give
us a bell and we’ll be glad to be of help.

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