$100,000 is a lot to lose in 4 months, but that is the case. In fact, it’s a conservative estimate. I’ll show you how that happened and do the math below.
A while ago, a company I’ve worked with decided to combine their online store with the company that provided their brick and mortar POS (Point of Sale system). They were also impressed by a large SEO company who could take over their SEO and launch a new PPC campaign simultaneously. I certainly understand the desire to make life easier. Unfortunately, their decision proved to be a very costly mistake.
I know this company well. They are in a large market niche with great, long-tail traffic and general traffic. In searches in their niche, they always came up in position #1 for a single keyword and hundreds of specific, long-tail keywords. The site was easy to navigate, their primary audience was familiar with the site layout and ordered a lot. The product pages were set up specifically for their products, were easy to use, loaded quickly, and had a high conversion rate.
We looked at data starting a couple months after their transition, from January 1 through May 10, of that year compared to the same period the previous year.
Here’s what happened.
They started a Google AdWords PPC campaign from which they are now bleeding money. This one is pretty easy to see. The AdWords campaign generated $12,530.00 in sales, but it also cost them $12,231.00 in click fees for a net increase in revenue of only $299. Right off the bat, they’ve lost close to $12k.
This doesn’t even take into account how much they’re paying this other agency to “manage” the campaign. I know the agency and let’s estimate they paid $1000/month to this agency (this is also a fairly conservative estimate). That’s $5,000 they paid for 5 months of whatever they’re not doing.
And if you use the model of doubling the wholesale cost to get to the retail cost that retail companies use for pricing, then half of their sales, or $6265 is also lost.
Here’s the Adwords math:
Campaign Cost: $12,231.00
Estimated Wholesale Product Cost: $6,265.00
“Management” Fees: ~$5000.00
Revenue Earned: $299.00
Total cost of earning $6,265.00 (the amount of profit on sales): $23,197.00
Or, to put it in simpler terms, this company paid $3.70 to earn $1.
They have several ads running that all use some variation on this generic content for the main part of the ad, and link to the home page:
And, they’re trying to take on local SEO by using primary keywords with a city after it when they have no presence in that city. Then they link people to their website and then they link everyone to the home page of the website!
SEO and Direct Traffic
Looking at current YTD compared to last YTD and see an almost 35% drop in organic and direct revenue which equates to over $77,000.00 drop in YoY revenue. They also showed a 36% drop in transactions, almost 40% drop in New Users and a drop of 2.07% for the ecommerce conversion rate).
Overall traffic (excluding PPC) dropped 35%
Google Organic traffic dropped 39% and revenue dropped 29%
Bing Organic traffic dropped 31% and revenue dropped 18%
Yahoo! Organic traffic dropped 44% and revenue dropped 37%
The most interesting part is looking at Direct Traffic. They’ve lost 15% of their direct traffic, but lost a whopping 45% of revenue from their direct traffic. This is huge and tells me that they’ve made it difficult for their current user base to purchase and have alienated a lot of them. I would imagine that their competitors are laughing all the way to the bank…
So how did this happen? It’s simple really, they broke all the rules.
- All their page URLs changed. We recommended keeping them the same, but they changed every, single, one. And they didn’t redirect ANY OF THEM! We had well organized, category and name-based SEO friendly URLs. They changed all of them to domain.com/itemnumber. At one point there were over 120,000 pages of their new site reporting 404 errors and well over 5,000 pages with errors in them that caused them to be broken. Instant loss of revenue.
- We had images named by their product name and recommended keeping them that way too, but they changed all image file names to item number that of course no one knows.
- They changed and watered down all their content, including description tags and the most important Title Tag. All effort put into this was lost.
- They complicated their home page and hurt the Google Juice of the home page by removing content, having too many large images with not very SEO friendly URLs, many image file names are product IDs and some are words without separators and some have spaces, and ALT tags without keywords. Pageviews on the home page dropped by 39%, Unique Pageviews on the site dropped by 47% and entrances to the home page dropped by 49%. Revenue generated from the home page as a landing page is down 40% and exits on the home page increased 65%!
- Remember that single keyword for which they ranked number 1? Sessions generated by that single, most important keyword dropped 75%! Sessions from users typing some version of their company name dropped between 55% and 80%.
- Product detail page is spread out too much with content too far apart and not organized well. Definitely a much poorer user experience.
- Oh, and they promised a responsive site, but it is most definitely not responsive. They built a completely separate mobile theme, which ironically, is better than their desktop theme, but that’s not saying much.
- Code isn’t optimized as average Page load time increased by 59%
- Overall Referral revenue is down 46%
- Returning visitors are dropping faster than new visitors which means they’re losing their best, easiest source of revenue.
Organic Traffic and Conversions
Looking at 3 different comparisons, you can see how serious this is.
First, we look at Organic growth from April to May of 2015, their busiest time of the year. Of course we see fairly drastic growth in traffic and revenue (I can’t show you actual numbers for obvious reasons).
Now we look at Organic growth from April to May of 2016, this year. Revenue has actually gone down!
And finally, organic traffic comparison from 2016 to 2015 to show how drastic their loss of revenue is:
I could go on and on, but I think I’ll leave it at this.
They’ve moved their site and made pretty much every mistake they could make in moving their site away and redesigning it. It’s easily costing them close to $25,000 per month and probably more. Unfortunately, it will continue to cost them thousands of dollars and possibly cost them close to $300,000 this year.
All of this was preventable had they only listened and migrated their site the correct way. If you’re thinking about migrating your site or rebuilding your site and want to make sure you do it the right way, please contact me so I can help you.
Steve Chitwood says
Great article. – and a very relevant warning. In a pat role, I succonmed to the allure of a more sophisticated large SEM agency in NY with a class-A client roster, strong industry relationships, seasoned professional teams and mature, technology-driven processes and moved a multi-million dollar PPC account away from a smaller focused firm that really knew and was passionate about my business and cared about the details. My experience was similar – conversion rates down, traffic slid, and costs rose. Fortunately, we had protected ourselves well in the contracting with baseline performance standards and termination triggers and were able to make a change. None the less, we lost revenue, momentum and had to endure the distraction of moving accounts twice. And yes, we went back to the vendor we had used previously.
Mark Peesel says
Hey Steve, Good to hear from you. And thanks for commenting. Sounds like quite the experience. There’s something really nice about the small business that listens and is successful. I did eventually get a call from the client saying I was right (of course, not wanting to hear an “I told you so”) and that they’d since changed vendors again. They’re slowly crawling they’re way back up, but overall revenue is still down 25% YoY in every Source/Medium from pre-switch days.