User Acquisition: The Five Sources of Traffic

This is the first post in a three post series on user acquisition.

The topic of this blog post may seem simplistic to those of you who have been in the trenches, working hard to grow visits and visitors to your site or application.  As basic as it sounds, however, it’s always surprising to me how valuable it is to think critically about exactly how people will discover your product.

In fact, it’s really quite simple.  There are only really five ways that people will visit your site on the web.

The Five Sources of Traffic

With all due apologies to Michael Porter, knowing the five sources of traffic to your site will likely be more important to your survival than the traditional five forces.  They are:

1. Organic
2. Email
3. Search (SEO)
4. Ads / Partnerships (SEM)
5. Social (Feeds)

That’s  it.  If someone found your site, you can bet it happened in those five ways.

The fact that there are so few ways for traffic to reach your site at scale is both terrifying and exhilarating.  It’s terrifying because it makes you realize how few bullets there really are in your gun.  It’s exhilarating, however, because it can focus a small team on exactly which battles they need to win the war.

Organic Traffic

Organic traffic is generally the most valuable type of traffic you can acquire.  It is defined as visits that come straight to your site, with full intent.  Literally, people have bookmarked you or type your domain into their browser.  That full intent comes through in almost every produto metric.  They do more, click more, buy more, visit more, etc.  This traffic has the fewest dependencies on other sites or services?

The problem with organic traffic is that no one really knows how to generate more of it.  Put a product manager in charge of “moving organic traffic up” and you’ll see the fear in their eyes.  The truth is, organic traffic is a mix of brand, exposure, repetition, and precious space in the very limited space called “top of mind”.  I love word of mouth, and it’s amazing when it happens, but Don Draper has been convincing people that he knows how to generate it for half a century.

(I will note that native mobile applications have changed this dynamic, but will leave the detail for the third post in this series.)

Email Traffic

Everyone complains about the flood of email, but unfortunately, it seems unlikely to get better anytime soon.  Why?  Because it works.

One of the most scalable ways for traffic to find your site is through email.  Please note, I’m not talking about direct marketing emails.  I’m referring to product emails, email built into the interaction of a site.  A great example is the original “You’ve been outbid!” email that brought (and still brings) millions back to the eBay site every day.

Email scales, and it’s inherently personal in its best form.  It’s asynchronous, it can support rich content, and it can be rapidly A/B tested and optimized across an amazing number of dimensions.  The best product emails get excellent conversion rates, in fact, the social web has led to the discovery that person to person communication gets conversion person over 10x higher than traditional product emails.  The Year In Review email at LinkedIn actually received clickthroughs so high, it was better described as clicks-per-email!

The problem with email traffic generally is that it’s highly transactional, so converting that visit to something more than a one-action stop is significant. However, because you control the user experience of the origination the visit, you have a lot of opportunity to make it great.

Search Traffic

The realization that natural search can drive traffic to a website dates back to the 90s.  However, it really has been in the past decade in the shadow of Google that search engine optimization scaled to its massive current footprint.

Search clearly scales.  The problem really is that everyone figured this out a long time ago.  First, that means that you are competing with trillions of web pages across billions of queries.  You need to have unique, valuable content measured in the millions of pages to reach scale.  SEO has become a product and technical discipline all it’s own. Second, the platform you are optimizing for (Google, Microsoft) is unstable, as they constantly are in an arms race with the thousands of businesses trying to hijack that traffic. (I’m not even going to get into their own conflicts of interest.)

Search is big, and when you hit it, it will put an inflection point in your curve.  But there is rarely anysuch thing as “low hanging fruit” in this domain.

Advertising (SEM)

The fourth source of traffic is paid traffic, most commonly now ads purchased on Google or Facebook.  Companies spend billions every year on these ads, and those dollars drive billions of visits.  When I left eBay, they were spending nearly $250M a year on search advertising, so you can’t say it doesn’t scale.

The problem with advertising is really around two key economic negatives.  The first is cash flow.  In most cases, you’ll be forced to pay for your ads long before you realize the economic gains on your site.  Take something cash flow negative and scale it, and you will have problems.  Second, you have solid economics.  Most sites conjure a “lifetime value of a user” long before they have definitive proof of that value, let alone evidence that users acquired through advertising will behave the same way. It’s a hyper-competitive market, armed with weapons of mass destruction.  A dangerous cocktail, indeed.

While ads are generally the wrong way to source traffic for a modern social service, there are exceptions when the economics are solid and a certain volume of traffic is needed in a short time span to catalyze a network effect.  Zynga exemplified this thinking best when it used Facebook ads to turbocharge adoption and virality of their earlier games like FarmVille.

Social Traffic

The newest source of scalable traffic, social platforms like Facebook, LinkedIn and Twitter can be great way to reach users.  Each platform is different in content expectations, clickthrough and intent, but there is no question that social platforms are massively valuable as potential sources of traffic.

Social feeds have a number of elements in common with email, when done properly.  However, there are two key differences that make social still very difficult for most product teams to effectively use at scale.  The first is permission.  On social platforms, your application is always speaking through a user.  As a result, their intent, their voice, and their identity on the platform is incredibly important.  Unlike email, scaling social feed interactions means hitting a mixture of emotion and timing.  The second issue is one of conversion.  With email, you control an incredible number of variables: content, timing, frequency.  You also have a relatively high metrics around open rates, conversion, etc.  With social feeds, the dynamics around timing and graph density really matter, and in general it always feels harder to control.

The Power of Five

Eventually, at scale, your site will likely need to leverage all of the above traffic sources to hit its potential.  However, in the beginning, it’s often a thoughtful, deep success with just one of these that will represent your first inflection point.

The key to exponential, scalable distribution across these sources of traffic is often linked to virality, which is why that will be the topic of my next post.