I have an event listing service where events are still showing up after years of being over. I want to archive these and either show a page not found, or redirect to the events listing page.
What would be the best action for SEO purposes?
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If you don't mind the event URLs going away, then there shouldn't be anything wrong with letting them 404. If they had links or traffic worth keeping, the page would be worth keeping.
So in other words if you get a bunch of 404 errors you probably took down the wrong URLs. You could track 301s also, but again that takes effort to set up and 404 is the code you should get when content was removed and not moved to a new URL.
Google considers redirecting to a non-equivalent page to be a soft 404 error. Google tries to treat redirects to parent pages the same as a 404 error. It is unlikely to help your SEO to redirect the URLs to the directory listing page rather than let them return a "404 Not Found" error.
It would help your SEO if you could redirect old events to a similar current event. For example redirecting the page for the "2020 blue widget conference" to the page for the "2021 blue widget conference". It is even better for SEO to re-use the URL for recurring events from year to year.
When you remove a page from your site, it is best to use the "410 Gone" status instead of "404 Not Found". Search engines give 404 pages a 24 hour grace period before removing them from the search index, but 410 pages get removed as soon as possible once search engine crawlers find them. Using a "410 Gone" status also gives you the opportunity to write a custom error page for users that explains why the content has been removed and allows users to find current content.
Even for SEO, you're better off thinking about your users' experience IMO.
If a user experiences a 404, it's frustrating and your user may leave your site entirely. What if you redirect them to a page that says, "This previous event is no longer available. For a list of future events, see the list below." or something similar?
When you approach SEO from your users' experience, you will both solve your historical data issue. Additionally, because the page answers the user's question (i.e., you didn't leave them with a 404, but have shown them a current list of events), you should improve your SEO.