Important YoY & multi-year trends in search & online marketing

I read a study published recently by SEM firm Engine Ready, and which looks at key statistics across paid and organic search, direct site traffic and referral traffic. The data's very interesting, but what's most illuminating is comparing the data to an earlier version the firm put out Jan 2008. NOTE: the recent study's data is based on data for 26 retailers taken from 7/1/08-6/30/09, while for the earlier study 27 retail advertisers' data was aggregated over a 2-year period 2006-2007. 21 of the 26 advertisers in the most recent study were also in the previous study.

Highlights:
1) Conversion rates (CR) have improved mostly in direct access and referral site visitation, and least in paid and organic search. This helps explain why growth in search CPC's has stalled;
2) Retail consumers increasingly know where they want to go, and use search less and less to get there (proportionally speaking);
3) The conversion rate disparity between direct and referral site visitors, on the one hand, and paid and organic search visitors on the other hand, has grown significantly;
4) AOV used to vary widely by traffic source, but has largely consolidated to a multi-channel average

Advertiser Strategy implications:
1) Advertisers testing & targeting efforts should be particularly focused on paid & organic search traffic, as CR has been most stagnant in search;
2) Multichannel attribution measurement is the key opportunity for revenue and marketing gains from CMO orgs, as it alone will allow for a conscious, strategic shift from dependency on lower value, recurring cost paid search channels over to higher value, higher growth direct & referral traffic sources;
3) Brand advertising - social media, search and offline - and with a strong set of visitor engagement metrics is a must to drive growth in the fastest-growing and most profitable traffic segments - direct and referral traffic. Waiting at the bottom of the sales funnel - paid search - for customers is a recipe for disaster;
4) Understanding and optimizing to Lifetime Value is critical, as AOV is a less and less movable needle. LTV, multichannel measurement & optimization go hand in hand.

Kudos to Engine Ready for putting together such interesting data.