Is Your Paid Search Campaign Cannibalizing Your Organic Clicks?

    July 23, 2011
    Chris Crum

In case you’re wondering if your paid campaigns are cannibalizing clicks from your organic search results, the answer is: not so much. That is If you take Google’s word for it anyway.

Google says its statisticians have run over 400 studies on accounts with paused paid search campaigns to gain some insight into how paid search affects organic clicks for websites.

“In what we call ‘Search Ads Pause Studies’, our group of researchers observed organic click volume in the absence of search ads,” Google’s Quantitative Management team said in a post on the Google Research Blog. “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,” the team added. “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.”

Hmm. Sounds like you should really be spending money paying for Google ads…at least according to Google.

David X. Chan, Yuan Yuan, Jim Koehler, and Deepak Kumar explain in the report:

In order to determine the incremental clicks related to search advertising, we quantify the impact pausing search ad spend has on total clicks. Indirect navigation to the advertiser site is not considered. Each study produces an estimate of the incremental clicks attributed to search advertising for an advertiser. To make comparison across multiple studies easier, we express the incremental clicks as a percentage of the change in paid clicks. This metric is labeled \Incremental Ad Clicks”, or \IAC” for short.

IAC represents the percentage of paid clicks that are not made up for by organic clicks when ads are paused. Conversely, when the campaign is restarted, the IAC represents the fraction of paid clicks that are incremental. Since we do not assume a positive interaction between paid and organic search in our analysis, the IAC estimate is bounded at 100%.

The team does acknowledge that it has not conducted enough studies to determine the impact of seasonality on the results.

The full report can be read here (pdf).