Thursday, July 21, 2011
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.