The Impact of referral channels in Online Customer Journey

This study scrutinizes the predictive relationship between three referral channels, search engine, social medial, and third-party advertising, and online consumer search and purchase. The results derived from vector autoregressive models suggest that the three channels have differential predictive relationship with sale measures. The predictive power of the three channels is also considerably different in referring customers among competing online shopping websites. In the short run, referrals from all three channels have a significantly positive predictive relationship with the focal online store’s sales amount and volume, but having no significant relationship with conversion. Only referrals from search engines to the rival website have a significantly negative predictive relationship with the focal website’s sales and volume. In the long run, referrals from all three channels have a significant positive predictive relationship with the focal website’s sales, conversion and sales volume. In contrast, referrals from all three channels to the competing online stores have a significant negative predictive relationship with the focal website’s sales, conversion and sales volume. Our results also show that search engine referrals explains the most of the variance in sales, while social media referrals explains the most of the variance in conversion and third party ads referrals explains the most of the variance in sales volume. This study offers new insights for IT and marketing practitioners in respect to better and deeper understanding on marketing attribution and how different channels perform in order to optimize the media mix and overall performance.