Drive and Convert

Most online businesses are hooked on traffic. It's like a drug –– they think if they just get more traffic, all their problems go away. Because traffic equals sales, right? On the surface that seems right, but Ryan is here to dig deeper, and explain why that isn’t the whole story. TRANSCRIPT Jon Macdonald: There's a common saying that there are only three ways to increase the revenue of an online business. You get more people to visit your site while keeping your conversion rate the same, or you can sell to more people who are visiting, thus increasing the average order value. Or you can convert more of those visitors coming to your site into customers. There is a reason that more traffic is first on that list. It's where most e-commerce brands focus because usually they can throw more money at ads and see traffic increase. So it's the easy button for them. But most online businesses are also hooked on traffic. It's like a drug. They think that if they just get more traffic, that all of their problems are going to go away because traffic equals sales, right? But on the surface, that seems right, but my guess is that if we dig deeper, that just isn't the whole story. It's safe to say that everyone wants more traffic, but is all traffic good traffic? Today that's what we're going to find out. Ryan, I'm interested to get your point of view on this as always. Ryan Garrow: I'm excited to touch on this one because it comes up in 2020 more often than I thought it would be. And I think it's unfortunate, but it's also nice because I get to help redirect thoughts and how people are coming to that conclusion. But it's always surprising when companies come to me and they're like, we just need more traffic, go find traffic. Interesting. Okay. Let's dig into that. Jon Macdonald: It should be fun. Okay. Look having optimized websites for conversions for a decade plus now, I think I know the answer to this, but let's just start high level. Is all traffic, good traffic? Ryan Garrow: Hopefully most people in organizations listening to our podcast and they've gotten this far down the road already know that not all traffic is good traffic, and it's not all the same. There's different purposes, for different types of traffic, different purposes for driving traffic to different parts of the page. So, no, it's not all the same. I find a commonality, and this is probably something that's been consistent for a very long period of time. That's why it stays consistent. But companies that have investors or they're chasing investors are constantly talking about site traffic. They fall into that first point you made I think all the time like. The site is going to convert traffic. We already know that. All traffic on the internet converts at 2%. that's a metric that's been thrown out for, I don't even know how long. I even use it sometimes just to give people a ballpark. Here's what you're going to pay for costs. 50 clicks gets you a sale. At least that's a barometer to start with and most people will be like yeah, 2%, I've heard that number before. When in reality, you know this 2% could be great and 2% could be terrible. Jon Macdonald: Right. It's all relative. Ryan Garrow: It is. But they say sites are going to convert at this rate. All we need is traffic. Please go get us traffic. I'm always confused. Well, my kids probably get on my phone and click on ads so that's tactically traffic, but I'm pretty sure you don't want my three year old on your site when you're trying to sell something to me. So not all traffic is good traffic, or the same quality. Jon Macdonald: That's an interesting approach. It's almost like, I don't want to blame everything on Facebook, but it's similar to their business model where it was just, let's just get as much traffic as possible and then we'll monetize that traffic. But when you're an e-commerce business, you're not selling ads on your site, right? You're trying to sell product. You want qualified traffic, not just eyeballs that can increase your advertising rates. Ryan Garrow: Yeah. I was trying to rack my brain going into this. Is there a space in the e-comm world where just high traffic numbers helps and I couldn't come up with an example. On Amazon, you can combine organic and paid and that helps cause you're driving all kinds of ranking increases. On Google, they're separate. Bing, they're separate. But in no scenario in the e-comm world, could I figure out where just a bunch of traffic would be beneficial to me. Maybe there's some out there, but maybe there's different goals that I'm not aware of in the e-commerce world where generally you want to sell more stuff. Jon Macdonald: Yeah. And it's interesting. I was just having this conversation with our director of marketing at The Good today about our site traffic. We've grown that real steadily and it's a point of pride for us over the years, but we're very consistent with the content and trying to drive traffic. But we were talking about a competitor had posted on LinkedIn today about how much traffic they're getting and how proud they are. And I was like, man, that's like, two or three X what our traffic is. And I know that competitor is a lot smaller than us. So I was like, okay, all traffic is not qualified traffic. If we're not getting qualified traffic, they could be sending your three-year-old to their site and it's not going to matter. They're not going to have more business from that. That's proof right there that it's not the same. Ryan Garrow: Yeah. It takes no skills to find people to come to your site. Anybody can do that. You want to pay me some money, I will get traffic to your site at a cheap cost, but it's not going to be anything relevant. Anybody can put a simple display ad on. A great one would be mobile apps. That's a display setting on Google. They have a massive network of mobile things. If you're running some display, a remarketing and you haven't eliminated the flashlight app on Google Display, that person that developed that app has made probably seven figures and Google knows numbers and nobody at Google has been willing to tell me, but it is a significant number of flashlight app clicks. You have an app to click on a flashlight. Well, I don't know why you would even have that app anymore, but the number of people that have it and are using it and accidentally clicking ads is astronomical and kudos to that guy. It was just probably one of the greatest inventions of the last 10 years specifically for money making. It's the simplest app, I'd go into the phone, open the flashlight app, and click ads accidentally, and I get paid. So traffic is easy, but if you're getting a bunch of traffic that spends less than one second on your site, what's the point? They didn't intend to come to your site, but you technically go into analytics, have a lot of sessions and a lot of users. If you have an unsophisticated investor, I guess, that only they want to see is you had 1 million visitors to your site last week. Yeah. Guess what? I paid $10,000 for it and I got zero out of it. But yeah, I got a million visitors. not going to any good. Jon Macdonald: Right. So ROAS is really important here. That return on the ad spend is really the metric you should be looking for? Ryan Garrow: I think it is. I've talked a lot of companies recently that are launching and it's an important for them to get eyeballs when you're launching, even though, you know you're probably not going to get some conversion out of it. But you want some metric that you can track that says that you're getting the right eyeball. And so there's a beauty brand that's launching that's going to be a very high end, very, very high end, very exclusive. We're talking like the Oprahs, the Michelle Obamas, that level. The founder was talking to me about how they were going to get traffic. And I said, you know what, I can get it for you, but it's not going to be traffic that's going to be valuable based on your price point and what you're trying to accomplish and exclusivity. You're basically going to come to us and we could spend money for you, but you're going to get almost zero. If you're expecting to be able to spend at a return, not good. But you need to be able to say, all right, we're trying to figure out who this product relates to. And who's at least showing some interest and what are their demographics look like? Because we go in and we have an idea and so even if they don't buy, we know that women in San Francisco, in New York are spending, and I'm making this up, a minute and a half on the site. Maybe men in West, Texas are coming to the site and spending three seconds on the site. Okay. Well, great. We've at least seen something we can decide what is more or less valuable in that traffic and eliminate traffic that is most likely less valuable and try to enhance what is valuable. The wonderful thing about e-commerce is that we can track everything. It's phenomenal. That's what I love about e-commerce. There is so much we can track. You probably realize this too, that the more we track, the more we realize we can't track. The more I know, the more I realize, I just don't know. It's crazy, but we are light years beyond what we were even 10, 15 years ago, as far as what we can track and the value of that. If you can track it, you can improve it and you probably should be. So not looking at all your traffic as being equal. Jon Macdonald: How does a brand see sources of traffic that are not converting then? Ryan Garrow: They're probably just mad at their agency that's sending the traffic or they're mad at their CRO company where they didn't think that's actually not the problem. It's different depending on the person or group leading that company. We'll have some companies that come and see traffic that's not converting. And they're like, okay, well we have a product problem, not a traffic problem. Because we're getting the eyeballs, now we just have to figure out why the product isn't selling to them or find the product their selling. Okay, well we know our product. The product is good. We're getting the wrong traffic. So let's look at the audience, let's look at a different way of getting traffic, but the right audience of traffic. Whether that's from a search perspective or whether that's from a demographic, geographic perspective. I would generally say that it's better to focus on the type of traffic or it's easier, at least for businesses, I think to focus on the type of traffic than it is changing their product mix. It really depends on where you're at in the business cycle. What you're willing to do or what you're trying to do. My brand, for example, on joyful dirt. We'll send traffic and I know all of the metrics around our conversion rates, traffic coming from social versus coming from being, versus coming from Google. Our Amazon traffic is in another bucket and the search engines are pretty easy. I know that if they're looking for houseplant food, I know what product they're generally going to see, where they're going to land and what I can expect from a conversion rate and return on ad spend. But if we're releasing a new product, like we're going to come out with a vegan blend because we found out from social and interacting with people there that, Hey, we really need a vegan blend because it turns out plants really like bone meal, because it's an organic matter that plants thrive on. We've had to test and measure, come up with some new product around vegan. If I happen to target a bunch of health and wellness people on social, that does encapsulate a large portion of vegans, generally speaking. And that traffic doesn't convert as well. It's not necessarily a traffic problem because we still do really well with that group of people. But it's partially because we didn't have a product that solved that problem. So I had to go listen to that group of people and honestly have our social manager go out and like, okay, we're getting people in this industry coming to us. Why isn't it working? There were just random comments we could see in the feed and on our posts that were like, Hey, we want a vegan. We want vegan. We want vegan. So we changed the product mix or added to it, I guess. I can eliminate on Google people looking for vegan because I know I don't have that product yet. And so that becomes, I can eliminate the traffic there, but if I'm going to get it because they're in the same bucket, I don't know how, and maybe it's because I'm not as good on a socials as others. I don't necessarily know how I'd completely eliminate all people that would be interested in a vegan plant food. Jon Macdonald: There's a difference between search traffic and shopping traffic. There's people out there who, if you're not eliminating these audiences, you're just going to be wasting your money. But there's also people who are landing on a category page versus perhaps a product detail page. Those who are ready to buy and it's that intent to have somebody who's ready to buy versus those who are just browsing. Ryan Garrow: Yeah. Sure. All of these traffic sources when they're showing intent. I kind of break it down into, If I'm looking at a funnel almost all the time when I'm talking to people in my head. And you've got at the bottom of the funnel is people that are searching for your brand. They know you, they're going to come buy. Then you have remarketing on top of that. Then you have your search and your shopping of non-brand stuff. And then generally above that gets bucketed, social and display. Because people on social generally are not going onto social and searching for your product on a social network. They're not for that. They're for connecting with people, posting political opinions in fact has been very popular on social sites for some reason. When you're putting an ad in front of them, you're kind of interrupting and trying to convince them to break away from whatever they were doing on social. Whereas, on the search engines, they're trying to find you, or they're trying to find your product or service. You're capturing them at the point where they're actually showing some intent. Facebook, I don't know if you guys have all seen the social dilemma, but Facebook has a lot of data. If you didn't know that already Facebook has creepy data. It makes your experience on social better, which is good and I appreciate that point. And they've got a lot of signals that say is this person in the position to probably buy your product? And they actually have some settings within social ads that you can say, Hey, there's a high intent to buy. Let's show them an ad. Facebook wants to make money from me as an advertiser so they know I'm going to need to see sales to continue advertising on Facebook and Instagram. All that to say, there's some good traffic there from social, but it's just going to be very different from Google. If we go on the Google path it breaks into two streams where you have text ads and shopping ads. And shopping ads, pretty simple, most people understand that if you click a shopping ad, you land on that specific product. On a text ad, you can land them wherever you want. I can land that person on a homepage, on a category page or on a product page. If I have a choice as an e-commerce brand, almost 100% of the time, I want to land a text ad on a category page because the conversion rates are better. If somebody is looking for again, I'll think about if somebody does a search for plant food, and at Joyful Dirt, we have four varieties right now on our website of plant food. I don't necessarily know which one they're looking for when they say just plant food. On a shopping ad, they're going to land on all purpose or succulent or tomato and herb or houseplant. If they were looking for an herb plant food and they land on my house plant, either they're going to keep searching my site or they're going to bounce back to Google. The conversion rate generally is lower on shopping than it is if you went from a text ad to a category page that had all of my plant food on there. It's very easy to see, Oh, he's got four plant foods, okay, this is great. He's always got a one pound or he's also got a mix and match three pack. There's just more options on a category page. Generally, there is more value there and if I could land some shopping ads from those general terms on a category page, I'd be a pretty happy camper. Hopefully Google is listening and they're going to start testing that. Being able to land different terms at different points in the funnel on my site. But then even beyond that, once you've got that traffic, a certain percentage is going to convert, whatever that happens to be on your site, your return is what it is with those, and then on your ad spend. But then you have remarketing and then you can go chase the people that didn't convert and bring them back. So you have a different source of traffic of people that have already been to your site. Even that traffic is going to convert at different rates. What a lot of people unfortunately don't do on remarketing, is segment their remarketing by category page visitors, product page, visitors, shopping cart abandoners. A lot of them have a shopping cart abandonment like RLSA list, but even having those buckets in your remarketing lists, you're going to be bidding different on them. Because as you move from shopping cart abandoners up to product page visitors, up to category visitors up to homepage visitors. Your conversion rate on remarketing goes down as you move up that. There's less intent to purchase from you. The less depth they had on the site closer to purchase. It's fascinating data that allows you to really start increasing return or focusing on the best types of traffic to your site. I think you want as many levers as possible on Google ads, Microsoft ads now, generally speaking. That's one reason I don't often recommend the smart shopping campaigns because you lose a lot of that data that allows you to push and pull a lot of those levers within your site or within even the shopping campaigns. Because it includes your remarketing, it includes some display and Gmail things in there as well. And you can't separate out that brand versus non-brand. So I would even say smart shopping traffic is a much different type of traffic than a regular shopping campaign traffic. Jon Macdonald: Interesting. I kept thinking as you were going through that, which is all really helpful that, consumers, again going back to this, consumers are really only at your site for two reasons. They're there to research and understand if your product or service can solve their pain or need. That's really the first step. And if you can't do that, they are going to bounce. That's where the different types of really come in, where are they in that research process? Are they pretty deep into that? And then once they've determined that you can help them, and that's where that category page might happen. Where it's versus just one product. Once they see that, okay, I landed on the house plant, but I really want the tomato fertilizer. Then it goes a little bit deeper of, okay, now they're ready to convert. You just have to make that easy to do. That different types of traffic there definitely, definitely makes sense to me about why people would convert more coming into a category page versus a individual product. Ryan Garrow: The crazy thing about what we do is that you're never going to get to a spot where you're done. You'll never have a conversion rate that was good enough. You'll never have traffic on your site that's qualified enough. One thing is you're never going to get a 100% of your traffic to convert. Unless you get one click and one purchase accidentally for the entire month, you're not going to be there. Because even if people are looking for your brand plus product, you don't get a 100% conversion rate. I've never seen it at least. I'm not saying it's impossible, but I'm just saying the chances are unlikely since I've seen a lot. Jon Macdonald: The only way to have a 100% conversion rate I've seen is to send one visitor to your site and give them the credit card number. Ryan Garrow: Yep. Exactly. Hey, my wife needs to go test my site. Go test my site and buy something. Oh great. I bought something for myself, 100% conversion rate. In that little window of time. All traffic, not the same. If you're an e-commerce business, why would you not want to find qualified traffic and I guess see your traffic differently? I haven't met an e-commerce business yet that doesn't conceptually understand the sales funnel. Your job is to push people through the sales funnel on a site or through remarketing or just through general logic, that there are different places that people enter into the sales funnel. You should be looking at that sales funnel differently. And then the traffic sources beyond that, that's coming into your site. And so general display traffic, or I don't eve know how you would do it. But if you paid for somebody to find a bunch of people in India to go click on your site, you can do that. That's one reason we have click fraud companies that protect against that because there are companies that will do that. Those are bots coming to your site. That's technically traffic. That bot is not going to buy from you. That bot is coming for information to go feed it back to the search engine, to feed it back to somebody that wants to see what's going on on your site type thing. Jon Macdonald: What I'm hearing from all of this today, Ryan to summarize a little bit is, it's not about traffic. It's about the quality. It's not about the number of visitors, even if you're trying to raise money, et cetera. It's really about the return on that ad spend. Then you're looking at, okay, my ROAS is pretty high. There's a good chance that I could invest a little bit of more money here and get more good traffic. But there's a point at which, do you have diminishing returns of just throwing cash at traffic of any type? You really need the scalpel that type of traffic into what's good for your brand. And then on top of that, you really need to bring the traffic into the right place so that they convert higher, like a category page versus a product detail page in most cases. Did I miss anything else here, Ryan. Ryan Garrow: I would say there's exceptions to every rule as well. And I also default generally in my businesses to start putting things in motion and directing it to fix it as we go. In many ways I'll just build the car as I'm driving it. I'd like to be able to direct something in motion, because I know that I'm not going to come up with the best car sitting in the garage. I might find out that I need these wheels as I'm driving. Like yeah, those are bad wheels, let's put new ones on. I understand to a degree some of the thought process of let's just start getting traffic to the site to see what they do and not a terrible idea. But like I was, again, I was talking to a client this morning that she's got a great product. She's got a market she wants to target, but it was clear that there needed to be some improvements to the site because I would not spend my money to send traffic to that site. I don't think it's going to convert well enough. She needed to get a product builder on the site to be able to show swatches on our products because her competitors had it and she had that type of customization available on our site. It just wasn't done right. A lot of people that are investing in companies tend to want a return and they're going to be impatient. So they're like, all right, you can delay all you want in trying to get a perfect site. But at some point you're just going to have to turn on the traffic. And that is true, but also just running that through a lens of logic, to a degree being like, okay, you know, we could send the traffic that would be appropriate, but it's not going to work yet. Let's at least get what some experts would say is a good starting point and then go and then understand that you might be paying a little bit more for quality traffic, but in the e-commerce space, quality is much better than quantity, as far as the traffic perspective. Jon Macdonald: Well, yes. I don't know about you, but I don't like throwing money away. If it's not quality traffic, then I'm basically throwing my money away. Ryan Garrow: Yep. I would agree with that. I don't know where that thinking always came from. All traffic just go to the site. It must've happened before I jumped into the industry a decade ago, but I would challenge that most of the time. Jon Macdonald: Yeah, well, I think an e-com entrepreneur, if you're following the general entrepreneur communities that are out there, they're all about just get eyeballs, get eyeballs, get eyeballs. But that works if you're trying to build some type of platform where you eventually want to monetize that platform, but that's not the goal immediately. The goal immediately is to get awareness, et cetera. That's where I think in my opinion, that might be where that comes from, but it's shortsighted for e-commerce. Right. It doesn't really work in that way. Well, Ryan this has informative as always. I appreciate the conversation. Each week we're continuing to remove some of the errant ways of thinking that are out there and the things that we hear every day that we're like, no, no, no, no, that's wrong. Don't think about it that way. Let's try to convince them otherwise. And so I'm glad we're able to do that. And hopefully we were able to convince some folks today that they need to take a step back and think about traffic a little bit differently. Ryan Garrow: Yeah, I hope so. Love helping people not waste money. Jon Macdonald: On that note, thank you, Ryan. Ryan Garrow: Thanks John.