D&C Episode 48 – Referral Traffic – Feature Image (WP Featured Image)

Drive and Convert (Ep. 048): Referral Traffic: An Untapped Growth Channel?

In this episode, Ryan and Jon talk about referral traffic, one of the most commonly misunderstood and often overlooked growth channels for online businesses.

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About This Episode:

Most marketers are used to digging around in Google Analytics to review their website traffic from organic search, social media, and email marketing, but far fewer dedicate time to analyze their referral traffic – often to their own detriment.

In this episode, Ryan and Jon talk about referral traffic as one of the most commonly misunderstood traffic sources and highlight why failing to dig deeper into the quality and sources of your website referrals could mean leaving money on the table.

Listen to the full episode if you want to learn:

  1. What referral traffic is and how it is categorized in your website analytics
  2. Common issues with tracking referral traffic and how to fix them
  3. What referral traffic data can tell you about your marketing efforts
  4. How analyzing referral traffic can uncover ripe opportunities for growth

If you have questions, ideas, or feedback to share, hit us up on Twitter. We’re @jonmacdonald and @ryangarrow.

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Episode Transcript:

Announcer:
You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon MacDonald and Ryan Garrow.

Jon:
Ryan referral traffic to a website is just often overlooked and it’s not focused on by most digital marketers, I believe. And I think this leaves opportunities for brands to push harder in this channel. Especially when a lot of other traffic generation methods are really kind of just collapsing lately to say the least and my team and I you know very well. We look at Google analytics all day and our focus is generally on those large channels that paid organic, direct social, email. I know there’s a default channel in Google Analytics called Referral, and many times it’s low volume, or there’s just an issue with tagging, that’s sending another channel’s traffic to referral incorrectly.
But because it’s in Google analytics as a default channel, I assume, and correct me if I’m wrong, that there’s some value there, but almost no mid tier or small brands, or really even bringing this channel up or I don’t hear about it very often from them. So I used to hear about it more when you hosted those LPX events and there would always be a couple partners there could help out with this, but I’m interested to hear more about this. What is it, and what do brand owners and marketing teams need to know and be worried about? I suppose.

Ryan:
Referral is, as you have expressed, it’s an often overlooked channel there that it ends up becoming kind of a collect of stuff that never gets open because so many of the conversations that we even have at LP is often on the paid search or the organic or social side and direct is generally, Hey, we know what exactly that’s people is typing to the browser going there. We like to see it. It’s the one rate above other generally. It’s like other, that’s just a bunch of craft that we don’t know where that comes from, or just stuck in there. But referrals, general lead links coming into your site from channels that don’t fit easily into one of the other ones. And they’re not often UTM parametered. And so it’s a collection of, Hey, if you got mentioned on somebody’s blog, it probably goes into referral traffic.
If a lot of times tweets will come into your referral traffic and you have to uncover them and really decide where to put them in our, how to you want that going out. It can be a valuable source of traffic. And if you see it increasing too fast or overnight, you might want to jump in there and make sure that like a PayPal, isn’t all of a sudden starting to show up in there and sending you traffic when it’s actually used to conversion site. But I think companies, to start moving the needle more in 2022, they’re going to have to start looking at opportunities that are not as easy to uncover. You know, it’s easy to say, I need to hire someone to push paid search up. I paid socials lagging, but some of that’s attributed to Apple iOS updates. But you know, I want to beat this competitor. I think the referral traffic and the channel on in Google analytics is going to be one of those ways. You can start to push competitors out by focusing more on it.

Jon:
We see this PayPal issue quite a bit where it’s referral coming from PayPal and our clients are like why is PayPal referring things to us? And it’s like, no, no, no, no. After they check out it sends you back to the site and that counts as referral traffic, if you don’t segment it out appropriately. So yeah, that’s typically when referral traffic comes up in our world is-

Ryan:
That’s an easy way to understand it too. Like PayPal is sending a link to your site. Okay, that’s a referral. Cause it’s not coming from a search engine, which would be organic or paid. It’s not direct. It’s not coming from a search or a social like Facebook, Instagram. I think Twitter’s more social, but a lot of tweets that aren’t coming like from your social profile on Twitter are going to be like, Hey, I was talking to Ryan at joyful dirt. And you know, they send a link from their tweet. That’s going to come up in a referral. But it’s basically unearned media a lot of times, which is what I like to look at it.

Jon:
Oh, that’s a great way to look at it and call it. You should have Google rename that I think most small businesses would better understand it. So how do you understand knowing all of this? Some of the unique ways that traffic is in there is tagged since you can’t use UTM parameters. Obviously you can’t control what is referring to you, so you can’t control that link necessarily. So how do you understand the unique ways that traffic in there is tagged?

Ryan:
I think step one is going there and start playing around. Like if you’ve never gone in there and looked at it, start clicking around in there. You can eliminate some of the stuff in there that shouldn’t be there. Like some of your multi pays your PayPals by using referral exclusions. That can be another topic, but those aren’t complicated. Just exclude those from being counted. So the credit will go back one channel up. So some of you listening to this are probably losing some of your attributed revenue from paid search, organic direct PayPal or an after pay or an affirm. So step one, get those out. So you can actually look at what’s coming to your site and there’s some ways to understand some of the more complex ones. Well, generally, I’ll talk about some of the easy ones, but if you want to get really complex and really understand the minutia behind some of these uneasy to find blog on that is from a guy named Neil Patel who just breaks it down pretty easily.
You can just actually Google referral traffic breakdowns and Neils’ blog article will come up. Understanding what’s coming in there can allow you to find ways to push harder, to get more of that traffic. Like once you start seeing some revenue show up in there, that’s not coming from a PayPal or an affirm, Hey, how do I scale that? How do I push more of that? A great example came from Joyce dirt. Actually, we had a bunch of referral traffic show up one week. We’re like, whoa, that’s unique. There’s a few hundred bucks sitting in there. What? We didn’t do that. So going in there, we were able to see, oh my gosh, this lady, Martha Stewart sent us some traffic like wow, how do I meet her? How do I get more Martha Stewart on this? So we actually had to, we went in there, saw it, went back and you can open the links to see what link led to this.
Well, she actually called us out for house plant food. And then which had another blog article about succulent food and the pages themselves consistently don’t send traffic and we can use SCM rush to see how much organic traffic those pages actually get. And it’s pretty low. Like, okay, well, why did all these people this one day, all of a sudden come there. And so I was talking to my mother-in-law about this, cause I was kind of bragging to Martha Stewart mentioned us, what kind of a big deal? She’s like, oh yeah, I got that article. And my I email, I was going to mean to tell mean to tell you that. Yeah, she was talking about house plant food and it was in the email. And so we could basically in our referral traffic go see that, oh, every time Martha Stewart’s marketing team, probably not actually Martha Stewart sends an email, we get sales.
It’s like our own email database, but one we can’t control unfortunately. And so for us it was, well, how do we go back to Martha Stewart’s team and say, Hey, we’d like to pay for more of this because there’s value to us. And so we went through trying to figure out who was actually doing the work and what team was working for finally found the right people got in contact with and was like, Hey, we’d like to be able to give you an affiliate link so you can actually get paid on these cause you’re doing the work. And if you want to do more of it, we’ll pay you more type thing.
And unfortunately Martha’s team wants to have real integrity and transparency in their callouts for product reviews and products. And so they don’t actually accept money. So if Martha’s talking about her under site, you can believe that they’ve actually tested it and they actually believe it does what it does. And they’re not getting paid cause I to pay them. But you take that same model and if somebody else is calling you out, that is willing to take an affiliate link. Why not? And so that’s one area I would say, Hey, look at that and see if you can push on things that are already working and pushing some of that volume for it. And that can work well.

Jon:
So as a side note here, what are you your thoughts on Martha Stewart and Snoop Dogs’ budding friendship?

Ryan:
I think it’s awesome. I just laugh because you like that is not something you would’ve ever predicted in the nineties. When I was listening to Snoop Dog rap and Martha Stewart was doing cooking shows that’s those people are never coming together, but never say never.

Jon:
Got a lot of stuff going on right now. I know that’s rather entertaining.

Ryan:
I actually bought my mother-in-law some of her gummy. So I was like, you might need to relax to some of these. So here’s some gummies. She felt guilty every time she ate one. So she stopped it.

Jon:
Are there some referral channels you’ve seen that drive more value than others? Like where should you really kind of focus?

Ryan:
For sure. There’s all I think in almost every brand is going to be a referral source in there. That’s going to be more valuable than others. So across the board, there’s probably not going to be a one size fits all because every brand is so unique and price points are all over the place. But at a high level, I have seen some winners that I can at least direct some people. I’ve seen some of our brands that target men find some pretty good results with men’s health and even pay to play on there and saying, Hey, they’ll review your product and give you some display placement. And some of their digital articles, I didn’t know, this site existed before a friend of mine almost accident bought placement on it, but Pink Bike turns out it’s a massive site for people that like outdoor sports and specifically around mountain biking.
So I mean, they’re really large. They get over a million visits a month. And so he actually did a paid product review there before holidays, for gifting. And it actually worked really well. It was mid in top funnel. It wasn’t a direct response. Hey, we’re paying 5,000. We’re going to get 25,000 in profit, but it was great for awareness that we saw months later actually had some value there. And I think that’s where referral traffic generally should be bucketed. And I’ll find this before I dive into more. I’ll find a lot of smaller brands specifically are trying to get pay a and get $10 in profit. That’s generally where their mind always wants to go. But when you’re building a brand, that’s going to be around longer or be worth more. You’ve got to be thinking in terms of longer term in part of like you’re going to bid building a Nike that didn’t happen by saying, Hey, we’re going to spend a dollar on product development and we’re going to get 10 a profit next week.
It was real long term vision. So I think referral traffic works best when it’s seen higher in the funnel than like a Google shopping ad where I’m going to get a click in a buy type thing. So we’ve seen some good stuff from Pinterest, but Pinterest is not at the level that I would say like in this Instagram or Facebook is, and we’ve touched on Pinterest before and how I’ve wasted money there trying to get direct response. But it’s an awareness campaign that you can go in and see what pins have actually been driving traffic. In fact, again, just saw one today. I have a Google alert on joyful dirt where I went in and saw, oh, one of our partners, Zulily had posted a pin about it and they didn’t have it right now in stock, but they had a pin on our product and that’s generating some awareness and some traffic still to the site.
And so definitely not a bad play. A tricky one is influencers. Influencers, everybody wants them to work, but it’s a lot of trial and error for most brands. And so you’ve got to go in. If you’re going to and referral traffic from influencers, that’s them mentioning your brand and them coming your brand to do something or be aware of it. You’ve got to understand number one, what the platform is like the people that are looking on Pinterest are there for very different reasons than Instagram for example. I personally go to Pinterest for recipes and that’s it, like if I’m cooking something for breakfast that I haven’t done before, I’m going to go find a recipe on Pinterest. I’m on Instagram, not for cooking breakfast. I’m on there to laugh at stupid memes, basically. That’s my social media right now. It’s just, I go there to laugh.

Jon:
The algorithm, as you figured out.

Ryan:
They do well. And the people I follow, it’s just small group that just make me laugh. But, but Pinterest is generally higher up the funnel because of that for people, it’s a DIY platform, generally speaking. And so if you’re trying to give somebody a completed product, Pinterest may not be the place for that yet. I think they’ll gradually figure it out. Like, Hey, you want to build this bookcase? Great. It’s going to be lots of bruised thumbs feeds your hammer and a few hundred dollars or you could buy it already done on IKEA for a hundred and it’ll deliver it next week. That’s probably where Pinterest is going to be moving further and further towards. But influencers at the end of the day, understand not just that they hit your demographic. And this is where I failed before is, oh, they have my demographic. Therefore, I want them to post about me.
Not the case. Not sure if I talked about it on here or not, but I’ve told quite a few brands that I’ve, that are looking at influencers, how I messed up, where I thought I decided to pay an influencer that was an architect or home rehab person that was redoing. I mean, beautiful photography that she would redo a room before and after walk everybody through the process, she was a phenomenal photographer and got a lot of interactions on her Instagram posts. So I was like, this is great. She’s hitting my target demographic perfectly, everybody that sees her posts likes it. So I’m going to get a lot of eyeballs. This is great. Did not work. It was a complete fail, I think I paid her 1200 bucks and it was a complete loss.
I think I got maybe $14 in sales and what I realized through the trial there from my brand, at least Joyful Dirt, it was people following an architectural person for inspiration is going to get very different likes than somebody that’s generating followers based on working through a health issue or they’re being followed because they give parenting tips.
The people that are liking those posts or interacting with them have a very different reason to follow them. And so you, as a brand need to understand, as you’re looking at those followers, why are they there? Are they there for the pretty pictures or are they there for the things that are in the pictures? So we’ve had great success, much cheaper influencer purchases for somebody that was saying, Hey, I’m actually going through a health thing trying to eat organically. And I’m using this product to grow my tomatoes or do this product to grow my leafy greens. And that was way better for us.

Jon:
That’s amazing.

Ryan:
Have a filter as you’re looking through that.

Jon:
We should definitely do an episode. I’d love to get your thoughts on influencers. I think we could definitely-

Ryan:
Just call Ryan wastes money, see how he waste his money.

Jon:
I’m noticing a theme here. I feel like we learn about that quite a bit. But it’s awesome. You’re willing to share.

Ryan:
But in marketing, you’re testing and measuring constantly, like you’re not going to bat a thousand, but if you’re not swinging, you’re definitely not going to hit one. And so that’s where I go out and my partners at least trust me to learn quickly, which is, I think what you have to do with the referral traffic is learn quick, because you’re not going to get it right every single time you’re going to see something that looks like it has a lot of potential. You go with it and then you realize, mm, that actually is not going to be something that works long term.

Jon:
Everybody listening on behalf of them, I’ll just say that. Thank you for being willing to burn your money so that everyone else and can learn.

Ryan:
Yes. If I could save you some money, just Venmo me, my wife will be appreciated.

Jon:
There we go. The call is out.

Announcer:
You’re listening to Drive and Convert the podcast focused on E-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with E-commerce brands to help convert more of their visitors into buyers and Ryan Garrow of Logical Position, digital marketing agency offering paper, click management, search engine optimization and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on apple podcasts and sharing it with a friend or colleague. Thank you.

Jon:
So are there any that are easier to set up then knowing, okay. Influencers might be a more difficult one.

Ryan:
I would say it’s the pay to play or simple display ads. Almost like if you see a source of traffic that allows you to reach out and say, Hey, I’d love to put a display ad. Like there was an article and you can see display ads on there. Like that Pink Bike example was a really good one because they allowed easy display ads. They were fairly inexpensive. I thought for the traffic source Pink Bike, if you’re listening, you could probably charge more sometimes, but then it’s figuring out who already likes you or is sending you traffic. And then you try to find more influencers or people like that. And so it’s, even if it’s just one or two, it doesn’t matter if you, how small your site is like I’m looking at, let me see. In real time, I’m looking at a referral links for a company that sells supplements and they got some sales from a site that says deal spotter.
So they had some referral sources coming from there. People that wanted to get a deal, say to coupon code that went out there, then you would go to, I would go to that and say, Hey, let’s see, can you pay to be promoted better within deal spotter? Or since there’s already people coming from there or are they just hijacking somebody else’s coupon code that you gave out for a completely different reason that may be something to look at. Obviously that’s a discounts and we want to be careful of how you’re discounting your brand and margin drain. But depending on what you’re in, that’s actually a supplement so that our margins are like at 85%. So margin trade may not be terrible because you’re just looking for lifetime value on those anyway.

Jon:
Well, and if you’re playing the game, you might as well play it correctly.

Ryan:
You go all in. Yeah. So and again we kind of talked about long term view. Like if you’re playing the top of funnel game, you’re not just going at it because you’re going to spend a thousand now and get a thousand dollars. And so kind of going against my influencer model, like to a degree, I would say, well, how are we playing that long term game as Joyful Dirt? Does that influencer actually have value? Even if it didn’t come through right now? Potentially like the architect probably didn’t make sense for my brain. And I should have probably realized that at the beginning, but if I’m going to be jumping into influencer game, like I want to nurture that long term. Think about it as large brands, don’t always have the answers, but there’s a lot of data behind getting eyeballs on NASCARs. Like, but if you get your logo on a NASCAR, you’re not going to probably generate revenue immediately from putting a logo on a NASCAR.
But you know that you’re building something bigger than that just NASCAR. So look long term. So I would hate to have a small brand say I spent a hundred bucks on this and it didn’t generate anything. Well, at least see if the traffic came or you being able to nurture remarketing lists out of that, build up more value to your site, because especially if you can get follow links again, if you’re doing SEO, that’s falls to a degree in this and how you’re getting traffic, your site and linking. But I would just think more than the next month when you’re looking at some of this referral traffic. Oh, and I will say too, there are some of these multi-pay things that you would eliminate from your referral traffic like Affirm or Afterpay. And generally, if they’re connecting on your site and transacting and coming back, obviously you don’t them getting credit.
But what a lot of them are doing now that I think is pretty valuable is they’re saying, Hey, if you have Afterpay or Affirm, you can go to these sites and use us. And we are actually seeing good referral traffic from those which blew me away. Cause I was like, oh yeah, ate that. And then I was like, wait a second. That’s actually not normal conversion traffic. So I followed the rabbit trail back to, I think it was a firmer after pay, but they actually had a whole database that was actually generating traffic. They were sending emails kind of like Martha Stewart saying, Hey, here’s some deals you might be interested based on what we know about you and your transaction history. You buy a lot of gardening things or you buy a lot of video game things. Therefore, we’re going to send you sites that use our platform and will set you up very easy to use our system. So it benefits Affirm and Afterpay as well, but also the retailer.

Jon:
That makes a lot of sense. I’m wondering though, what does the company need to do to make sure that they’re looking at clean referral traffic?

Ryan:
So as often as possible, I would say you want to obviously eliminate the ones that are showing up there. That shouldn’t the PayPal’s, that’s pretty basic. We cover that. But if somebody does have a link coming through that’s maybe should be going somewhere else or you want to understand it better. Somebody in a blog may be willing to do UTM parameters on their link. Like if you send it to them and say, Hey, I’d love for you to do this so I can track it long term. I mean, I would be willing to do that if somebody sent me a link, oh yeah, I can change it out real quick and no harm to me.

Jon:
Especially if your end goal is to make money from advertising, then you can hopefully they’ll come back to you and say, oh, okay, we’re seeing some good results here lets amp it up.

Ryan:
So if I was going to use Pink Bike, for example, I would say, look, if there’s pay to play on there, make sure you’re using UTM parameters. Like you get to control the link that they’re sending from that display, you actually input it in their platform. So make sure you’re using the UTM builders and you can’t do this soon enough. Like if you haven’t been doing it all, just Google, UTM builder, and Google populates it for you and tells you exactly what your URL should be. So that’s basics and then double down on one that aren’t working

Jon:
There you go. Well, Ryan, thank you for educating me on referral traffic. I had no idea that there was a whole rabbit hole here stuffed with all these goodies. So thank you for letting me know. And I definitely want to dive into influencers eventually, because that’s something I’m just in. I had somebody the other day I was on a podcast and they called me an E-commerce influencer and I was like, Hey, I’ll take it.

Ryan:
You sure are one, I looked at your LinkedIn Profile.

Jon:
I never considered it, but I’ll take it. I’ve never been called an influencer to my face before. And I was like, I don’t know if that feels weird or should I be like calling my mom, I don’t know.

Ryan:
And she calls you and says, Hey honey, I saw you then you know, it’s getting real.

Jon:
My mom tracks me. I will say online. So she probably already sees, she’s probably listening to this podcast knowing her.

Ryan:
I think my mom makes sure I’m alive by listening. What I’m doing online.

Jon:
There you go.

Ryan:
Still clicking, still good.

Jon:
Oh, how times have changed. All right, Ryan. Well, thank you. Have a wonderful rest of your day.

Ryan:
Thanks Jon

Announcer:
Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you could subscribe at www.driveandconvert.com.

About the Author

James Sowers

James Sowers is the Director of Marketing at The Good. He has more than a decade of experience helping software and ecommerce companies accelerate their growth and improve their customer experience.