Sounds like...
Sounds like the new traffic you're getting isn't quality / qualified traffic. More traffic doesn't mean it is more people wanting what you offer.
I remember the good old days, when every website under the sun stuffed sex related keywords into their meta tags just to ge more eyes to their website. I'm sure it didn't do anything for sales, but rather just gave a whole lot of people higher bandwidth usage bills.
You'll need to examine your logs to see what phrases people are searching on to get to your site, then make adjustments to talk to that audience - unless it's the wrong audience all together.
Brian.
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