Does Google Ads cannibalise on organic traffic ? A study with Google Analytics data for ecommerce

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 ecommerce accounts were put through Google’s Analytics grinder.
We will be expanding on the results in this document.

Bear in mind though, we are talking about accounts that have had more than one touchpoint.
So, if a client were to hypothetically, to 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 layman 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.

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.

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.

This in a little clip to understand why its necessary to understand organic traffic in relation to how you can optimize paid traffic.

If you enjoyed that preview, watch the entire webinar here.

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.

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.