How Much will Google Reader's Demise Cost your Business?

The impending demise of Google Reader is more than a mere inconvenience to those of us who use it to follow an overwhelming collection of industry blogs, Google Alerts, and xkcd and Oatmeal comics. If you offer RSS as a way to subscribe to your content, whether it’s a blog or some kind of feed, then you stand to lose a chunk of your traffic on July 1.
BradsDeals.com is no exception. We offer three different RSS streams on our main site - the BradsDeals blog, the Black Friday blog, and a feed of all of the deals that we post throughout the day. Since Google Reader subscribers follow our deals (and presumably purchase them from time to time), we wanted to know exactly how big of an impact the loss of Google Reader might have on our revenue. Here’s how we did it.

How many subscribers do we have?

The first item of business was simply to see how many subscribers we have. So we opened up Google Reader and searched for BradsDeals as though we weren’t already subscribed.

Try this for yourself: Click on “Subscribe”, enter a brand keyword that’s sure to bring up your blog, and click on “Add”. Here’s what we see for BradsDeals.

So our RSS feed of deals stands to lose 1,137 subscribers on July 1, assuming they don’t make the switch to an alternative service. But before we start panicking, who are these subscribers? Are they engaged users? How much revenue do they drive? Should we be worried? These are all questions we needed to answer before deciding on a course of action that would divert development and marketing resources from other projects.

How much traffic do those subscribers drive to our site?

The next step was to isolate referrals from Google Reader via custom reporting in Google Analytics. I was primarily interested in seeing visits, bounce rates, and goal conversion rates.
Alas, Google Analytics sampled the data beyond all usefulness. (Curse you, sampled data!) I ran the report by Rachael Gerson for ideas on how to refine the data, and she suggested using actual bounces and goal conversions instead of percentages and calculating rates by hand from smaller data sets. You can grab my custom report configuration at the end of this post, but the key is just to use a filter on the Full Referrer to isolate google.com/reader. Next, we pulled the numbers day by day, which allowed us to get our sample sizes above 85% and in some cases as high as 98%.


A few simple spreadsheet formulas later and not only did we have a reasonable estimation of the number of visits referred from Google Reader, we also knew those subscribers were were significantly more likely to convert than the sitewide average. It’s a small but highly engaged group.
Note that while I also pulled unique visitors, this was not a terribly useful metric when looking at day over day traffic. It does, however, show that most of our referrals are not repeat visitors later in the day.

What is that referral traffic actually worth in dollars and cents?

Ahh, the big question. How much could Google’s decision to drop Reader actually cost us? Once we had total visits and goal conversions, we only needed to know our average order value to calculate how much daily revenue Google Reader brings in. Let’s play with some data. Google Reader drove 2,528 visits over 109 days with a goal completion rate of 70.33% and an average sale of about $100.

If we get 8% commission on that amount as affiliate marketers, that works out to a loss of $130.50 per day once Reader shuts down. That may or may not sound like much depending on the size of your business, until you realize that totals out at over $47,000 per year.
That’s not the end of the story for BradsDeals, though. These figures are based on goal completion data coming straight out of Google Analytics, and because this is affiliate revenue, goal completions only count clicks through to a third party site - where a sale may or may not occur. These numbers are only accurate if 100% of those goal completions result in a sale, and realistically we know that’s not true. Assuming that 1 in 5 goal completions results in a sale, we’re probably looking at a loss closer to $26 per day, or $9,500 per year. Every company is going to have a different set of unique circumstances to consider, so make whatever adjustments you need to get in the ballpark.

But won’t those users just convert to a different service?

Maybe, maybe not. The savviest users will find their way to other services quickly. Others will be caught off guard, decide that the transition is just too much to think about, and throw in the towel. And keep in mind that of the 1,137 subscribers we found, only a small percentage click through to the site on any given day, so many of those are probably zombie subscribers who aren’t driving any value to us anyway. Plus, every site is different. It’s going to depend on the strength of your audience’s commitment to your content and their level of technical competence. I’d venture to guess that SEOs are flocking to alternatives in droves while the folks who still use AOL email addresses are probably going to be slower to adopt anything new. If you’re not sure what your audience is likely to do, it may be a good time to think about constructing some user personas.
For BradsDeals, my guess is that if those few users driving traffic through Google Reader really are that engaged, they’ll miss us and will find alternatives on their own pretty quickly. The zombies will drop off, and we won’t miss them.

Convert as many users as you can ahead of time.

The good news is that we have until July 1st before the doors slam shut. That means we have plenty of time to find ways to reach our RSS audience and encourage them to move to a different news reader. I’m rather fond of Feedly, myself, but which Google Reader alternative they choose is less important than keeping your news feed in front of them however you can - so long as it’s worth your time to do so.
Bottom line: Crunching the numbers now is giving us time to create and execute a strategy to retain our RSS subscribers. It sure beats the heck out of explaining to the CFO that she needs to adjust growth projections downward because Google decided to kill a service she’s never heard of, right?
Or maybe you’ll discover that channel wasn’t driving much value anyway, so you can stop your panicking already. Either way, it’s worth finding out.


Reference:-http://www.seomoz.org/ugc/how-much-will-google-readers-demise-cost-your-business

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