August 4, 2009, 12:00 AM

Paid search is more likely than organic to bring in buyers, study shows

Visitors who arrive at retail sites from paid search ads convert 2.03% of the time compared with 1.26% for those arriving from natural search results, a new study finds. But consumers who navigate directly to a retailer’s site convert 7.38% of the time.

Visitors who arrive at a retailer’s site from paid search ads are 50% more likely to buy than those who come from clicking on a natural search link, according to a new study by search marketing firm Engine Ready.

The conversion rate from paid search is 2.03% versus 1.26% from organic search, according to the study, which is based on traffic to 26 e-retail sites in the 12-month period that ended June 30. “This could be a reflection of a more tailored landing page for the paid traffic visitors, or a greater intent to purchase when a web user clicks on a paid ad versus an organic listing,” says the report, “SEO vs. PPC-The Final Round.”

But most likely to buy are consumers who navigate directly to a retailer’s site by typing in a URL or clicking on a bookmark, as their conversion rate registered at 7.38%. And consumers who came to an e-commerce site from another site or an e-mail converted at 6.58%, the study shows. The overall conversion rate was 3.6%.

The study also found:

  • Paid search visitors bought the most, with an average order value of $117.06 versus $109.27 for those coming from other sites, $106.64 for visitors from organic search and $95.29 from direct referrals, such as from a bookmark or direct entry of a URL.
  • Average order value for all retailers in the study was $104.21, down 31.7% from a previous Engine Ready study that analyzed data from a two-year period that ended December 2007. The economic downturn likely is the cause, as retailer clients say average order values from all channels have declined in the past 12 to 18 months, says Brian Lewis, Engine Ready vice president.
  • The average time on a site per visit increased 5.8% from the previous study to 4 minutes, 33 seconds. Consumers who navigated directly to a site spent the most time, 5 minutes, 8 seconds. The study found consumers who spent more time on a site were more likely to buy, but that their average order value was not higher than that of other buyers.
  • Site visitors on average viewed 5.2 pages per visit, up 15.6% from the previous study. Those who came directly or from other sites or e-mail viewed the most pages, 6.2 on average.
  • Average number of seconds on a page dropped 9% from the earlier study to 53 seconds, which could be a sign “marketers are doing a better job of presenting information on their pages in a more easily readable format,” the study says. Paid search visitors spent the most time on a page, 66 seconds on average.
  • 43.9% of all visitors left after viewing just one page, down slightly from 44.5% in the earlier study. Organic search produced the highest bounce rate, 48.5%, and direct access the lowest, 39.2%.
  • Direct access produced the largest share of site visits (40%), followed by other referring sites and e-mail (27.9%), paid search (19.8%) and organic search (12.3%).
  • Returning visitors accounted for 25% of all visitors. However, the true figure might be closer to 40% when taking into account consumers who regularly delete tracking cookies from their browsers. Lewis notes a comScore Inc. study from 2007 found that 31% of U.S. computer users clear their cookies on a monthly basis.

The report is based on an analysis of 20.8 million visits and 108 million page views to 26 e-commerce sites from July 1, 2008, through June 30, 2009. 21 of the 27 companies in the latest study also provided data for the earlier Engine Ready study.

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