Traffic vs. users
January 10th, 2008 by Benjamin KuoThere’s been a recent trend I’ve been seeing in companies that talk to me about being focused on building web traffic to their web sites. Inevitably, those folks tell me that traffic is more important than monetization, and that they are looking to gain scale first before worrying about their business plan.
That all may be good and well if that traffic results in concrete users to your service and/or website (ie, those are long term users of your web site and not just transient traffic). However, I’m often surprised by the lengths some of these companies go to — purchasing web links, gaming social news sites like Digg and Reddit, hiring firms to push up their web visits, etc.–to drive up traffic numbers, but not necessarily committed customers.
It may go without saying, but traffic is good if:
- The visitors who are visiting your web site are, in fact, real people (a great deal of traffic is generated by web crawlers and automated software).
- Those visitors are visiting you because they’re truly interested in what you have to offer.
- Those visitors are likely to become long term users of your service
- and ultimately, if those visitors can be converted to customers — or, in the case of an ad-supported site, can be sold as an audience to advertisers.
Traffic is bad, when:
- You’re just trying to drive up the numbers with some wishy-washy formula for valuation (ie “X million unique users and pageviews = X million valuation”)
- It’s just traffic, not real users — ie you are paying a firm to boost your traffic, and it’s some software running on a server in Russia, a poorly paid fellow off the street in Mumbai, or someone clicking on your site to earn money from some SEO farm.
- That traffic is transitory — ie short term — based on people who click into a Digg story, from a mention on a trendy blog, or is someone who would not be interested in what you offer beyond that specific page.
