- What is Paid Search Incrementality?
- Paid Search Incrementality in Practice
- The deeper dive
- The central theses
I hear no less than four times a year: "If I have a good organic ranking, I shouldn't have to pay for these keywords."
Or more often: "I'm at the top of the page with my brand name so I don't have to bid on my branded keywords."
And every time I hear that, I let the little fit of inner anger pass before I answer.
That answer usually goes something like this, “Well, Mr./Mrs./Ms. X, let me tell you about the paid search incrementality theory or, as often said, the 1 + 1 = 3 theory. "
After explaining the rule to them, 90% withdraw from asking them to stop keywords, 9% ask to test the theory, and 1% ask me to stop talking.
I accidentally tested this theory recently and will share my results in this article.
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Please note the following disclaimers first:
- This is not related to public policy incrementalism theory or the law of incremental improvement.
- There is no formal name for this law / theory, so it will be referred to as incrementality in this article if necessary.
- The data presented therein was not carried out as part of a scientific study. The scenario that enables us to perform this data analysis came to us purely by chance. But it's real data did not have a formal test site, Control group, etc.
- Every situation is different. So if you do decide to test this theory for yourself, do so in a controlled and planned manner.
What is Paid Search Incrementality?
The concept itself has been around since at least 2009. Melissa Mackey wrote an article in March 2009 in the (now defunct) DMNews entitled Guide to Search Marketing, in which the advantages of SEO on SEM are shown.
The funny name "1 + 1 = 3" was coined later, but the theory has been published and documented many times.
And not just from search engines, but also from industry experts and universities.
(If you have the time, here's a fascinating read of the scientific study Sha Yang and Anindya Ghose conducted for NYU in 2010: Analyzing the Relationship Between Organic and Sponsored Search Advertising: Positive, Negative, or Zero Interdependence.)
The theory itself is that if you are just doing SEO or SEM on your own, they will each provide a visitor to your website.
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However, when running at the same time, SEO and SEM create a halo effect. Instead of attracting two visitors to the site, you get three.
Net-net together they drive a gradual growth.
Based on this theory, SEM should also be part of the marketing mix when doing SEO work for a website.
In short, SEM and SEO just work better together. 1 + 1 = 3.
Paid Search Incrementality in Practice
In January, a customer of ours found himself in a frustrating situation. For some reason, the Google Ads billing method has been turned off.
This in turn resulted in their campaigns being discontinued.
To make matters worse, the resolution was some time away from being available, leaving the Google Ads account offline and dead in the water.
At that point, Google Ads and Google Organic were making up 23% and 23% of their website visits, respectively, which together accounted for 46% of website traffic.
The vast majority of traffic and revenue for both paid and organic products is from branded keywords.
Hence, one would assume that paying offline would increase Bio to 47% of the site contribution from visits, or at least 40% of all site traffic.
But that was not the case.
Bio only grew to 36% of total site traffic.
The deeper dive
The growth (or lack of) visits to organic suggests a few things:
- While SEM cannibalizes organic traffic with branded keywords, that's not necessarily a bad thing.
- Organic traffic will increase, but the conversion rate won't change too much.
- There is a degree of incrementality that comes from SEM and SEO together and cannot be replicated by organic data alone, which helps to confirm the theory of 1 + 1 = 3.
Take a look at general data on how we got these results:
((Note: The dates for all three periods are the same number of days, same days of the week, no change in sales or promotions.)
The primary observation is that the total contribution from visits and / or sales when SEM is offline is not something that Bio alone can make up for.
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To understand a little better how the data came out, here are the changes:
- The post period does not immediately follow the SEM shutdown period. In between there was a week break due to a Google Shopping failure. So we had to adjust the embargo period after the SEM to get it from apple to apple as much as possible.
- In the subsequent period, there was a complete decline in traffic and sales compared to the previous period. This was observed at similar levels for all inbound site traffic. This variance is reflected not in the numbers but in the analysis, which makes it more important to focus on contribution levels.
- The post-analysis period saw a 19% drop in sales affecting all inbound media.
It was immediately clear that SEM can cannibalize organic traffic.
Organic traffic increased as soon as SEM was no longer on the market.
However, with no other elements changed, it was clear Organic couldn't handle the full load of Google search traffic.
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Therefore the total traffic decreased.
Do you know what else has fallen? Sales.
When SEM came back on the market, organic traffic dropped to levels similar to what it was before it was shut down
SEM, meanwhile, returned to a contribution to total site traffic that was also previously observed and was responsible for the total site visit drop of 19% handicap.
When SEM is in the market with SEO, the incremental traffic growth is between 30% and 40% (most of that comes from branded keywords).
This allowed for an additional 22 sales (average) if both were in the market, or $ 2,310 in sales (assuming an average order value of $ 105).
The media cost for this incremental traffic is ~ $ 800, resulting in a 277% ROI on incremental revenue.
We speculate that when both SEM and Organic are visible in the same query, the searcher's confidence will be strengthened.
As a result, the brand is more likely to get the click than if only organic is available.
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The central theses
Let me explain the highlights and key takeaways here:
- When SEM is spinning around organic listing, you are more likely to receive incremental traffic to your website than if your organic listing was on its own.
- Yes, SEM ads steal a fair amount of “free” traffic from Bio. But it will overproduce and promote incremental traffic, beyond what organic could drive on its own.
- Incremental traffic leads to incremental sales. However, you need to evaluate the value of the sales based on the incremental amount, not the total sales amount.
- There is actually a validation and purpose as to why you have to bid on keywords when you have a good organic rank.
- Further growth and scalability beyond organic require investments in SEM.
Organic traffic, provided you have a good rank, gets you somewhere. Whether it is enough is up to you.
We found that if you want to answer the age old question, "How do I get more?" And if you've made the most of your chances of getting organic, investing in SEM is a smart move.
This results in incremental traffic that is beyond your original organic volume.
The thought of stopping your SEM traffic can be stressful, but testing this process (in a controlled environment and on purpose) can help add to the value of your SEM efforts.
Try a segment of your campaign and the results may warrant a higher level of investment.
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All screenshots by the author, March 2021