In the past, we’ve talked about the many challenges related to interpreting the results of Google Analytics data.

A new analysis conducted by the folks at Groupon throws another curve ball into the mix, concluding that much of the traffic that websites analytics programs classify as being “Direct” traffic in fact should be credited to organic search traffic.

Indeed, up to 60 percent of the website traffic Groupon looked at that was attributed to Direct turned out to be SEO traffic. The analytics programs had it all wrong!

You can read the analysis yourself but here’s the short story on this remarkable SEO study.

Gene McKenna, Director of Product Management at Groupon and leader of the company’s SEO efforts, long suspected that his SEO team wasn’t getting the credit they deserved.

Gene kept seeing Direct traffic coming to certain landing pages that he thought were highly unlikely to get so much direct traffic. To have their visit qualify as a Direct visit, the site visitor typically has to key the full URL into their browser or bookmark the page and come back to it.

But do people really key in super long URLs? Not usually, and, to Gene, it seemed unlikely that so many people were bookmarking the long-URL pages. He theorized that some of this Direct traffic was being misclassified and that it actually came from organic searches in Google and other search engines.

That’s a big problem for a guy like Gene, who is in charge of SEO for his company.

It’s the equivalent of hitting a home run in a baseball game and having the umpire tell you you can only go to second base. In other words, his SEO team is doing great work, but he wasn’t getting full credit for it because of the bad data.

To prove his point, Gene did something that’s a little crazy: one day, he removed all of his web pages from Google’s search indexes for several hours.

For those several long hours, organic traffic from Google dropped to nearly zero, as was expected.

But the surprise finding, the one that confirmed Gene’s hunch, was that, during those same hours when the SEO traffic spigot had been turned off, Groupon’s so-called Direct traffic to long-URL website pages also dropped considerably — by 60 percent!

The only sensible explanation is that 60 percent of Groupon’s Direct traffic was in fact Organic SEO traffic from Google. Why else would Direct traffic disappear at that exact same time?

A gutsy move to prove his point, but it worked! Fortunately, Gene was able to get the Groupon site re-indexed in Google after finishing up his SEO study, so he kept his job and managed to publish this great SEO analysis. (One hopes and assumes that he had the blessing of management before he did the study!).

I’d be remiss if I ended this blog post by giving you the impression that this is a flaw in Google Analytics or any other analytics software (Groupon uses its own proprietary tool). The root cause of misclassified SEO traffic is more at the individual PC and browser level. That’s where an HTTP header is created that feeds the analytics programs. It’s at that point that these errors are getting introduced — the analytics software just reports on the data that it gets, doing its job just fine.

For Groupon, this analysis gave them a better picture of what was really driving website traffic, but there are lessons for the rest of us as well.

Key Takeaways for the Rest of Us

The big takeaway on all of this is that SEO is probably much more important to your company than you realize.

Whatever you think you are getting in terms of direct traffic — based on the stellar quality of your brand or whatever — that number is a myth. It’s pure and unadulterated fiction.

Knock it down by 40 percent or so to get the real number, and credit the balance to SEO.

It’s best to do this only on long-tail traffic, since that’s what the Groupon study covered. Of course, you’re not Groupon, are you? But even if your numbers are not exactly like those of Groupon, they are probably similar. Without a doubt, all of us are overestimating Direct traffic.

Another important point is this: if you’re a marketing manager or CEO who is being stingy with the SEO budget or not giving the SEO manager or SEO agency a big pat on the back for work well done, it’s time to re-run your numbers.

Odds are they are doing a much better job than you realize!