In difficult economic periods, online advertisers are tempted to slash PPC budgets. But PPC doesn’t act in a vacuum — it also influences online traffic and conversions from other channels.
Historically, December has been a strong month for one of our clients. This year, they asked us to pause pay-per-click advertising in December, due to budget constraints. On the surface, this looked like a smart move — even with the lack of PPC, online conversions increased in December from November.
But, the lack of PPC presence had the unintended effect of reducing non-search traffic — over 80% of the client’s total online traffic — resulting in lost conversion opportunities not only from PPC, which converts at more than twice the rate of other online channels, but from non-search traffic as well.
We analyzed traffic and conversions based on historical data, and found that, due to the lack of PPC, non-search traffic fell 30% in December vs. November, resulting in 26% fewer conversions. Most of the client’s traffic comes from non-search traffic, so total online conversions saw a fall of 23% from projections.
Non-search traffic had trended upwards since September. But the pause in PPC caused this trend to reverse, with unspecified traffic dropping 30% in December from November levels. Again, this resulted in those lost conversion chances, because of the heavy dependence upon non-search traffic noted above.
In January, the client resumed PPC, at a reduced budget level. Online conversions increased by 25% overall in January upon the resumption of PPC — when normally conversions decrease from December’s holiday pace.
Predictably, PPC traffic increased in January after the campaign was paused in December. However, organic search traffic and non-search traffic rebounded along with it — up 36% and 34%, respectively. This illustrates how important PPC presence is.
Impressively, non-search conversions increased by 30% in January, commensurate with the 34% month-over-month increase in traffic. Last year, non-search conversions were flat from December to January — indicating that maintaining PPC presence in 2009 helped bolster conversions from not only PPC, but non-search visitors as well. Certainly, lost sales as a result of stopping PPC can far exceed the amount saved in advertising costs.
