Search Engine Optimization: What Drives Organic Traffic to Retail Sites?

26 Pages Posted: 20 Jan 2016

See all articles by Michael R. Baye

Michael R. Baye

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Babur De los Santos

Clemson University

Matthijs R. Wildenbeest

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Multiple version iconThere are 2 versions of this paper

Date Written: Spring 2016

Abstract

The lion's share of retail traffic through search engines originates from organic (natural) rather than sponsored (paid) links. We use a dataset constructed from over 12,000 search terms and 2 million users to identify drivers of the organic clicks that the top 759 retailers received from search engines in August 2012. Our results are potentially important for search engine optimization (SEO). We find that a retailer's investments in factors such as the quality and brand awareness of its site increases organic clicks through both a direct and an indirect effect. The direct effect stems purely from consumer behavior: The higher the quality of an online retailer, the greater the number of consumers who click its link rather than a competitor in the list of organic results. The indirect effect stems from our finding that search engines tend to place higher quality sites in better positions, which results in additional clicks because consumers tend to click links in more favorable positions. We also find that consumers who are older, wealthier, conduct searches from work, use fewer words, or include a brand name product in their search are more likely to click a retailer's organic link following a product search. Finally, the quality of a retailer's site appears to be especially important in attracting organic traffic from individuals with higher incomes. The beneficial direct and indirect effects of an online retailer's brand equity on organic clicks, coupled with the spillover effects on traffic through other online and traditional channels, leads us to conclude that investments in the quality and brand awareness of a site should be included as part of an SEO strategy.

Suggested Citation

Baye, Michael Roy and De los Santos, Babur and Wildenbeest, Matthijs R., Search Engine Optimization: What Drives Organic Traffic to Retail Sites? (Spring 2016). Journal of Economics & Management Strategy, Vol. 25, Issue 1, pp. 6-31, 2016. Available at SSRN: https://ssrn.com/abstract=2718665 or http://dx.doi.org/10.1111/jems.12141

Michael Roy Baye (Contact Author)

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-855-2779 (Phone)
812-855-3354 (Fax)

Babur De los Santos

Clemson University ( email )

228 Sirrine Hall
Clemson, SC 29634
United States
864-656-3953 (Phone)

HOME PAGE: http://babur.people.clemson.edu

Matthijs R. Wildenbeest

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-856-5067 (Phone)
812-855-3354 (Fax)

HOME PAGE: http://www.kelley.iu.edu/mwildenb

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