Impact of Organic Ranking on Ad Click Incrementality

Posted by David Chan, Statistician and Lizzy Van Alstine, Research Evangelist

 In 2011, Google released a Search Ads Pause research study which showed that 89% of the clicks from search ads are incremental, i.e., 89% of the visits to the advertiser’s site from ad-clicks are not replaced by organic clicks when the search ads are paused. In a follow up to the original study, we address two main questions: (1) how often is an ad impression accompanied by an associated organic result (i.e., organic result for the same advertiser)? and (2) how does the incrementality of the ad clicks vary with the rank of advertiser’s organic results?

 A meta-analysis of 390 Search Ads Pause studies highlighted the limited opportunity for clicks from organic search results to substitute for ad clicks when search ads are turned off. We found that on average, 81% of ad impressions and 66% of ad clicks occur in the absence of an associated organic result on the first page of search results. In addition, we found that on average, 50% of the ad clicks that occur with a top rank organic result are incremental. The estimate for average incrementality of the ad clicks increases when the rank is lower; 82% of the ad clicks are incremental when the associated organic search result is between ranks 2 and 4, and 96% of the ad clicks are incremental when the advertiser’s organic result ranked lower than 4 (i.e., 5 and below).

 While these findings provide guidance on overall trends, results for individual advertisers may vary. It’s also important to note that the study focuses on clicks rather than conversions. We recommend that advertisers employ randomized experiments (e.g., geo-based experiments) to better quantify the incremental traffic and lift in conversions from the search ad campaigns and that they use the value-per-click calculations in the original search ads pause study to determine the level of investment on their search ads.

 For more information, find the full study here.

Search Ads Pause Studies Update

Posted by Lizzy Van Alstine, Research Evangelist and David Chan, Statistician

In July 2011, Google released a study called "Incremental Clicks Impact of Search Advertising" that showed the amount of search ad traffic that is incremental to traffic from an advertiser’s organic search results. In that study, we asked these questions: What happens when search ads are paused? How much does organic traffic make up for the loss in traffic from search ads?

We found that an average 89% of paid clicks are essentially lost and not recovered by an increase in organic clicks when a search campaign is paused. This number - what we call the Incremental Ad Clicks (IAC) - was consistent across all verticals.

In that initial study, we only examined cases where ads were completely paused. In this update, we looked at three additional change scenarios and included new cases up to August 2011, giving a total of more than 5,300 cases.

For the paused cases, the average IAC of 85% was a little lower than the previous value of 89%. We see there was some volatility in this estimate, month-to-month, driven purely by the mix of advertisers who choose to pause their ads in that month.

In the cases where spend was decreased (as opposed to paused), we found that the ads associated with the spend decrease drive on average 80% incremental traffic. This means that 80% of the traffic from those ads would not be made up for by organic traffic. This value is lower than the 85% value in the paused cases, possibly due to advertisers selectively turning down parts of their search advertising which they find less effective.

In cases where an advertiser was already spending on search ads and subsequently increased their ad spend, we also found that the associated ads drive, on average, 78% incremental traffic. In the last scenario, where advertisers were previously not advertising with search ads, and then turned on search ads, the incremental traffic was 79%.

Across the board, our findings are consistent: ads drive a very high proportion of incremental traffic - traffic that is not replaced by navigation from organic listings when the ads are turned off or turned down.

Click here for an infographic.

Studies Show Search Ads Drive 89% Incremental Traffic

Posted by David Chan and Lizzy Van Alstine, Quantitative Management Team

Advertisers often wonder whether search ads cannibalize their organic traffic. In other words, if search ads were paused, would clicks on organic results increase, and make up for the loss in paid traffic? Google statisticians recently ran over 400 studies on paused accounts to answer this question.

In what we call “Search Ads Pause Studies”, our group of researchers observed organic click volume in the absence of search ads. Then they built a statistical model to predict the click volume for given levels of ad spend using spend and organic impression volume as predictors. These models generated estimates for the incremental clicks attributable to search ads (IAC), or in other words, the percentage of paid clicks that are not made up for by organic clicks when search ads are paused.

The results were surprising. On average, the incremental ad clicks percentage across verticals is 89%. This means that a full 89% of the traffic generated by search ads is not replaced by organic clicks when ads are paused. This number was consistently high across verticals. The full study can be found on here.