Image from: Sergey Mironov / Shutterstock
Have you ever thought how great it would be to have a remote controlled helicopter? Sure you have. I assume it’s the lifelong dream of every (wo)man-child across the globe, but, similar to the G.I. Joe/Barbie life-size electric toy cars, such items remained woefully out of reach during my youth. I had long given up such juvenile thoughts, until a co-worker informed me that you can buy an R/C helicopter for only $20 on Amazon. Needless to say, two days later, a childhood dream was realized. Now, this face-to-face referral to Amazon is what led me to that particular site and admittedly that would have been the first place I looked anyway, but that is because I buy nearly all of my possessions from Amazon. However, I’m sure many others would have used Google to search for R/C helicopters because, let’s be honest, besides a hobbyist, who really knows online vendors for R/C vehicles off the top of their head? Searches on Google generate two types of results: the paid results at the top of the page and the natural results found lower on the page. Now I usually skip over the sponsored links out of habit, but in the case of R/C vehicles, where my knowledge is slim to none I actually found myself clicking a sponsored link or two because I’m quite the daredevil like that.
Thus a blog idea was born: for smaller specialized markets, like the one for R/C vehicles, how much of a difference does utilizing sponsored links affect the overall traffic to a given site? For this analysis I searched on a variety terms to see which sites are prominent in the sponsored results section and which were not. From the results I chose to look at towerhobbies.com, horizonhobby.com, and bananahobby.com. Their unique visitor traffic is shown in the graph below and what is clear is that whatever market advantage Tower Hobbies had is being chipped away at by Horizon Hobby and Banana Hobby as the gap between the three retailers is a fraction of what it was just a year or two ago.
I selected these three sites because both Horizon Hobby and Banana Hobby heavily utilize sponsored links on Google while Tower Hobbies did not show up at all. I wanted to explore this breakdown a bit more so I went to Compete.com to see if the search referral data shed any light on the unique visitor data. It turns out that search referrals make up a large portion of the overall traffic for all three sites, which is illustrated in the graph below that shows the yearly share of search referred traffic (as a percentage of total visits). This data is telling in and of itself because it shows what I had previously speculated about, that many people do not know about random hobby sites off the tops of their heads, for something like a radio controlled car, truck, plane, or helicopter there appear to be two markets: the hobbyists who already frequent a certain number of sites and know what to expect and then others (like myself) who merely want to fly a helicopter around to live out childhood dreams.
After looking into overall search data I explored the difference between paid and natural referrals and what I found provided a bit more context to the tightening trend of the market among these three sites. What we see is that Tower Hobbies utilizes little to no sponsored links while Banana Hobby and Horizon Hobby get a fairly significant portion of their search referrals from their sponsored links, especially in the past two quarters. So while I may usually skip over the sponsored links when I’m using Google, the analysis here indicates that sponsored links can make significant contributions to shifts in certain markets, which can be even more pronounced when it is a smaller, more specialized market.
Now one thing to note is that even though search referral shares are significant for all three sites, there is a year over year decline for Banana Hobby and Horizon Hobby, while Tower Hobbies has risen. Given what we know about overall unique visitor traffic this might indicate that the decrease in traffic from Tower Hobbies (and conversely the increase in traffic to Banana Hobby and Horizon Hobbies) might be from the hobbyist group of shoppers who do not utilize a search engine to shop for R/C vehicles. Therefore there may be other contributing factors to the shift in the market beyond the utilization of sponsored search results, but for now I must depart to take a few minutes out of my day to enjoy the marvelous gift of remote controlled flight.