89% Uplift from Paid Search Clicks

by on November 15, 2011

Popular article republished from my Back Azimuth company blog. The above is the headline of a nice shinny object that Google is dangling in front of marketers. One that is being used out of context and I am sure has resulted in significant money being pissed away in paid search. Now, I am not against paid search in any way – I think it is a great tool and works even better when it is in collaboration with organic listings. That is what I advocate – co-optimization. How do we make them work better together.

Over the past few weeks I have heard that 89% quote in four countries, at every conference and at least 20 times alone at SMX in New York. So where did it is come from?

This is essentially the findings of a research study released recently by Google employees titled “Incremental Clicks Impact of Search Advertising” that said the following:

A meta-analysis of several hundred of these studies reveals that over 89% of the ads clicks are incremental, in the sense that the visits to the advertiser’s site would not have occurred without the ad campaigns.

Immediately this was translated by the market place as the following headlines in articles and blogs with the first being my favorite “doom and gloom” heading:

  • “Danger – STOP Paid Search Advertising & Lose Up To 89% Of Your Web Traffic!”
  • “89% lift when Paid Search is added to Organic Search”
  • “Studies show search ads drive 89% incremental traffic”
  • “Paid Search delivers 89% more traffic than organic SEO alone”
  • “Google Study: 89% Uplift from Paid Search Clicks”
  • “Google: Search Ads Drive 89% Incremental Traffic”
  • “Google Research Shows Paid Search Ads Get 89% More Traffic Than Organic Search Results”

Google went on to create an “idiot proof” Paid Search is Great video that showed that in some cases 98% of the traffic

For those of you that actually read Google’s study other than the half-assed paraphaseing blogs you might have noticed the “your mileage may vary clause” in the last paragraph of Section 3:

A low value for IAC may occur when the paid and organic results are both similar and in close proximity to each other on the search results page. This increases the likelihood of a user clicking on an organic result as opposed to a paid result.

Close proximity occurs when the ranking of the organic result is high, placing it near the paid results. Organic results triggered by branded search terms tend to have a higher ranking on average and this may lead to a low IAC value.

Matt Van Wagner scared me for a moment with the headline in a recent Search Engine Land article Google Study: PPC Ads Do NOT Cannibalize Your Organic Traffic fortunately Matt was not another Google fanboy and strongly suggested that people actually test the data. As I mention on my personal blog, New Venture Announcement – Voice of Consumer Data Management System I have done a few surveys and found only a few people actually combining the data and doing anything with it.

Brad Geddes has been talking about this the longest and a recent post on his blog goes into the mechanics of doing the testing of paid vs. free clicks. I had already added this specific testing into my tool and it starts to show some very interesting results.

One of the biggest reasons I found as to why people don’t do it is it is too hard to do for most.  In Brad’s post he simplifies it but what if you have a lot of keywords?  This is one of the key elements that I have built into my tool. I have only found a few companies that even know if they are ranking for key paid listing.

Below is a screen capture from my tool that shows that for the 20 most expensive words by Cost Per Click they did NOT rank on even on the first page. In this case, yes, Google’s study holds true – if you have no exposure in organic search then the only exposure you will get is from paid ads.

In this case they are paying $10.00 or more per click, their highest CPC and they are not ranking well.  We can’t even get to a collaboration scenario until we have the organic rankings.   This company was not aware of this problem since they were not looking at the data collectively.  Immediately after learning about this they went to work optimizing the pages to try to get these to rank better.  In a few cases, there were not important and they reduced their average CPC.    This is the opposite reason people use PPC – to make up for the shortcoming of their organic performance. Maybe they can redo the study and show what happens when they have organic rankings.

To help companies understand once they have an organic ranking and a paid search rankings what is happening.  I have built into the application a simple ROI calculator. For your PPC Loyalist and Co-Optimization Haters – yes there is no message context or any other variables other than the fact this word had a negative ROI.

In the example below, we have a keyword that everyone thought was performing acceptably well.  When we actually do some analysis we see that it has a negative ROI and is loosing the company $11,825 dollars in the current month the the organic term was generating $6 million.

To be fair, we can look at a positive ROI example where the paid and the organic have generated a positive ROI.

In this case organic still does out perform PPC but PPC has a positive ROI. In further tests when this PPC ad was day parted to appear less frequently, Organic did not pick up the additional clicks. This showed us that in this specific case, paid and organic were collaborative and having paid search resulted in incremental visits and clicks.

There are a few things you need to do and consider when looking at the analysis.

You don’t have to do all of your keywords.  You should decide if they are the brand name, branded product names or if they are general category or specific non-branded words you are looking at.

The tests you want to do are the following:

What happens when we have paid only?  This is a good test to do before you optimize content and do not have an organic position.

What happens when we have organic only? You can day part of pause the paid search for a period.  Most of the times a few days or a week is sufficient.

What happens when we have paid and organic? Once you rank well you can start the comparison.  This will tell you what is happening when they are both together.

We are NOT trying to eliminate paid search for all words.  Only those words there there is not an incremental lift if clicks.  If we turn off paid search and all or most of the clicks and conversions that went to paid increase the organic clicks and conversions then paid is NOT complimentary but cannibalistic.  If the clicks and conversions do not increase we can assume that they are collaborative and simply un-pause the paid ads until you can do a message test.

The point of this is just test it and see what is happening.  If you want to better understand our analysis tools send us an email and we would be glad to give you a demo.

 

Be Sociable, Share!
Paul Beck November 18, 2011 at 5:51 pm

Bill
Great insight as per usual. One clear lesson here is that actual expertise and work in this area can drive profound impact an business. Real impact is more likely to occur here on a dollar spent than almost anywhere else and is based on actual measurable human behavior. Taking headlines at face value can be misleading from the posting, tweeting and retweeting machine set. Thanks for the deeper dive.

Comments on this entry are closed.