Is it better to have keywords in the URL path or filename?
Why Webmasters Stack Exchange recommends it
Webmasters Stack Exchange answerers link it as a quick, authoritative statement from Google that folder versus hyphenated URL structure makes little ranking difference and that user experience matters more.
Recommended by 1 people across 1 different months, 2012 to 2014.
What it is
A roughly two-minute 2010 Google Webmaster Help video in which Matt Cutts answers a viewer question about whether keywords in the URL path (folders) or in the filename (hyphenated) matter more for Google ranking. He says there is little difference and points to user readability as the bigger factor.
What people said
Recommends panindra · 2012-09 · Webmasters Stack Exchange · on “Using subdomains or directories for main categories?”
I think creating sub folders : example.com/en/ or example.com/us/ etc for different languages and different countries is the best option. I use this method and it works very well for me and you can observe some top branded websites also using the very the same method. SEO point of view As an SEO point of view it is much preferred just watch this video with the Google Team explaining on this issue [this video] with tips and advice.
Cites David K. · 2012-04 · Webmasters Stack Exchange · on “Is it better to use slash or hyphens for SEO”
This video by Matt Cutts from 2010 claims there aren't that of a great difference in search ranking between the two ( [this video] ), but from my personal experience and just by cross checking search engine results POST-panda, there is definately a trend in using dashes instead of slashes IF the corresponding page does contain these keywords within the context of the page. For categories and such, I'd still go for sub-folder. I.e. [LINK] ...
Cites BizNuge · 2012-04 · Webmasters Stack Exchange · on “Is it better to use slash or hyphens for SEO”
Actually there's a Matt Cutts/Googlewebmaster vid on youtube at [this video] that rubbishes the whole damn theory... He does however go on to say that from a useability point of view, the hyphen method looks kinda spam-a-lam-a-ding-dong.... That'll be the one that DKOATED already posted then will it... yup... I'll get my coat...
Cites adam-asdf · 2012-08 · Webmasters Stack Exchange · on “In terms of SEO, is it better to have a URL broken down by folder, or with dashed names?”
Based on the wording of your question I'm guessing you have seen this: [this video] Where Matt Cutts of Google (approx 2 mins.) addresses this very issue. However my gut feeling from experience says that all things being equal, it is the title tag of the page in question that would be significant. To this day, I see spammy sites with optimized page titles rank well, presumably because search engines like exact matches. Descriptions tags are important too but Google often generates them dynamically based on the query from page content, which is what @panindra was referencing above.
Cites MrWhite · 2012-11 · Webmasters Stack Exchange · on “Is placing one or two keywords in the URLs still good for SEO?”
Including a few keywords in a URL can help "a little bit" (Matt Cutts, Google). It can also help identify links to users. But, as Matt Cutts suggests, it is only a very small factor. Great content, titles and link text all play a far greater role in SEO. Changing your URL structure to include different, perhaps more targeted keywords, might help, it might not - it's debatable. I think I have heard/read Matt Cutts say that if you already have a link structure in place then don't change it. A couple of related Matt Cutts videos: Does the position of keywords in the URL affect ranking? [LINK] Is it better to have keywords in the URL path or filename? [this video]
Cites adam-asdf · 2012-11 · Webmasters Stack Exchange · on “Multiple URL's going to same page - Kosher for Google?”
If looking for a Mexican restaurant, which would you be more likely to click on? Without getting carried away, urls that contain keywords are muy bueno: This isn't totally on topic but it's related and it's from Matt Cutts of Google: [this video]
Cites dan · 2013-07 · Webmasters Stack Exchange · on “Do directory names and URL's paths make a difference for SEO?”
This video from Matt Cutts describes the SEO effect and user-impact of the URL variations that you're contemplating: Is it better to have keywords in the URL path or filename? [this video] According to that, there wouldn't really be any SEO advantages for one URL over the other. However, users can more easily identify (i.e., read) shorter directory names, and hence are more likely to click on them in your SERP. So considering this, your first URL seems to be the clearest one: site.com/cars/audi/convertibles/red/
Cites user399666 · 2014-07 · Webmasters Stack Exchange · on “which url is better for google SEO, recursively or directly?”
Long URLs look spammy. If you watch this video [this video] from Matt Cutts, you'll see that he talks about how users may be less likely to click on URLs that are too long. In regards to SEO, he says that he doesn't think that there is "much difference" between the two (take from that what you will). From his perspective, it is all about the user experience.