January 31, 2006 | Comments
A study of data from WebSideStory shows that brand-led direct navigation produces the best conversion rates online, followed by links from search engines.
When it comes to driving conversions, the power of having a brand can't be beat, according to new data from WebSideStory.
Using data from more than 30 business-to-consumer e-commerce sites on its HBX Web analytics platform during the last three months of 2005, WebSideStory found that those who navigated directly to a site, either by typing in a URL or using a bookmark, were most likely to convert. The next-best conversion came from users following search engine links, and then other Internet links.
"These data show that there's a lot of value to branding. A lot of times when you're trying to promote your product, you may not see immediate results, but in the customer's mind, that campaign may be contributing to some of these bookmark conversion rates later on," Ali Behnam, senior digital marketing consultant for WebSideStory, told ClickZ News.
According to Behnam, visitors to a site can be segmented into three categories, according to where they are in the purchase funnel, a model of the behaviors a customer would be expected to follow on the way to a sale. The first, and lowest-converting group, is casual Web surfers who come across a site's link in a banner, on an affiliate site, or elsewhere. These users converted at 0.96 percent.
The next level is made up of people who have an idea of what they want, are in the market for a specific product, but don't necessarily know where they want to get it. These users generally turn to search engines to find what they're looking for. Search engine links converted twice as well as other links, at 2.30 percent.
The third, and best-converting group, is made up of people who know what they're looking for, and know where they want to shop to get it. These users arrive at a site via direct navigation, by typing in the site's name or using a bookmark. These kinds of users converted almost twice as well as those using search engine links, with a 4.23-percent conversion rate.
"Search engine marketing is a very effective means to reach customers who have made up their minds about what product they're looking for, but don't necessarily know you. Search engines are a very effective channel to reach these visitors who are in research mode," Behnam said.
Sites studied were put into the five categories: apparel, toys, computers & electronics, sports & leisure, and other. Direct navigation converted the best in all categories except the catch-all "other," where it was bested by search links by .35 percentage points. Search links performed best in the toys category, where conversions reached 4.16 percent to direct navigation's 4.85 percent. Search was weakest in the computers & electronics category, where its 1.35-percent conversion rate was dwarfed by direct navigation's 3.66-percent rate.
"It makes sense that search engine users, who arrive at sites they may not be familiar with, are much less likely to purchase a big-ticket item, such as a computer or television, than they are for a toy," Behnam said.
The data set has some limitations, since it only counts same-session conversions. Additionally, non-Web-based email links and poorly implemented redirects are lumped into the direct navigation category. But according to Behnam, those factors do not significantly affect the results, since conversion rates in the same visit or across sessions typically correlates within a few hundredths of a percentage point, and email and bad redirects make up a very small part of the overall results.
WebSideStory declined to name sites whose data was included, but Bloomingdale's, Brooks Brothers, Hasbro, Lego, Best Buy and Palm are among its e-commerce clients.
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