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Saturday, November 26, 2005

The Dreaded "No Referrer"

If you're selling big, bulky items that cost in the hundreds or thousands of dollars -- especially if it's a business-to-business transaction -- you probably know it's impossible to accurately track every sale or lead back to the initial online search that ultimately generated the sale. We can discuss the obvious reasons in the technology and user behavior: cookie deletion, latent purchases, difficulty of tracking phone sales, users with multiple computers, etc.

But for some reason, after doing all that, we go ahead and misinterpret our stats anyway. We still discount or downplay the latency in major purchases. For example, looking at the sales we do have data for, we can see that 90% of our conversions happen within two days. The remaining 10% are spread out over weeks later. Maybe 0.5% happen near the end of our (let's say) 60 day cookie period.

So we take that 0.5% and twist it around to suggest that 99.5% of our sales come in a fairly short time period after the first ad view (even when that makes no intuitive sense). And we stop thinking about the 50% of our conversions that say simply: "no referrer." Are they direct navigations? (If so, why? Who?) Is it a problem with the analytics package?

Plain and simple, I'm convinced a lot of these are latent conversions and word-of-mouth referrals and they are direct navigation.

Throw in a twist. I finally got around to proceeding with the purchase of a bulky $700 item for the office. Because my bookmark was on the office desktop, and not my laptop, I needed to do a search to remember the name of the best company in that space... one that I'd discovered after a bit of research. I immediately saw them in the "blue background" sponsored listings, in 2nd spot. Knowing that spot is probably costing them $2/click, I probably didn't want to cut any further into their $200 profit margin. I had already cost them $4 with previous clicks, after all. So instinctively I opened a new tab and navigated directly to their site. Depending on how sophisticated their analytics is, I became a dreaded "No Referrer" customer.

The original (and subsequent) referrer, beyond a shadow of a doubt, was Google AdWords.

Posted by Andrew Goodman




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