I get asked the question "What type of traffic converts the best" often enough that I thought I would write about my response, and answer the question once and for all. Over the years, there have been multiple studies on traffic and conversions. Some have been comparing ppc vs. organic, some have been comparing social media, press releases, ppc, direct and organic traffic. The one thing these tests and research studies have in common is that they are usually only performed on one site, or in one industry. This tends to skew data in favor of a particular source of traffic. There has only been one broad study done across 27 different sites over 2 years, on the conversion rate of direct traffic sources to your site. The study found that direct traffic for these sites had the highest conversion rates over all other traffic sources.
Direct traffic can be simply defined as visits from people who type in your URL directly, or have your site bookmarked. This type of traffic converts very well most of the time, although direct traffic typically originates from other online marketing efforts like your ppc, seo, email, or offline marketing efforts.
From my own tests I have noticed some conversion trends amongst my clients sites: For a client in the travel industry, organic traffic over the course of 1 year (from Google, Yahoo and MSN) converted at an average of 19.23%. Google Adwords PPC traffic converted at around 8%. Social and press release traffic didn't convert at all. Traffic from referring sites converted at about 22.55%. Direct traffic converted at 13.59%. So what conclusions can I draw from this data? None really. There are too many variables to definitively claim, "For all sites, organic traffic will convert this percent higher than this type of traffic, and direct traffic will always be 10% more than that".
For a client in the software industry, while running PPC ads at the same time as having strong organic rankings on the first page of Google, Yahoo and MSN, the Google Adwords ads converted at almost the exact rate as Google organic. Direct traffic converted lower than both of the previous sources. Organic traffic from MSN and Live converted at almost double the rate of Adwords and Google organic. Conclusions? Sadly, again this is dependent on the industry, the type of visitor, and economic factors.
I hope I've made you more aware of the fact that depending on your industry and demographic of site visitors, different types of traffic will convert at a higher or lower rate. There is no one definitive source of traffic from which you can always expect higher conversions (although direct traffic seems to be the winner for a lot of sites). However, there are some things you can do to increase the conversion rates of all your traffic sources.
You'll notice that direct traffic tends to have the highest conversion rate. But how do people learn about your site in the first place so they know what your URL is? They must research your industry, company, or product online or through a friend. So the better you show up for terms that are relevant to your audience, whether in ppc or organic listings, the more likely your site visitors will be to return to your site if they didn't happen to convert through one of your online marketing efforts. Also note that when you are tracking conversions and traffic, keep in mind the fact that there are phases in how people search for things to buy, or services to use. It's called the Web Conversion Cycle. Essentially, people search, shop, then buy. During each phase of searching, people will use different keywords based on what phase of the Web Conversion Cycle they are in. And here is a great little tool to help you determine what phase of the Web Conversion Cycle people are in when they perform a search.
Now that you know that all types of traffic convert at different rates based on many variables (such as industry and demographics) it should come as no surprise that all your online marketing efforts have a direct impact on your conversion rates. You should now also understand the value of testing your site structure and wording constantly to help improve conversions for each type of site visitor.