March 12th, 2012 | Published in Google Research
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.