How does paid search incrementality affect SEO (is 1 + 1 = 3?)

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No less than four times a year, every year, I hear, “If I’m doing well organically, I shouldn’t have to pay for these keywords.”

Or, more often, it’s: “I’m at the top of the page for my brand name, so I don’t need to bid on my brand’s keywords.”

And every time I hear that, I let the little fit of internal rage pass before I respond.

This response usually looks like this: “Well, sir / madam / madam. X, let me tell you about the paid search incrementality theory, or as it’s often coined, the 1 + 1 = 3 theory. “

After I finish explaining the rule to them, 90% back out of their request to stop the keywords, 9% ask to test the theory, and 1% ask me to stop talking.

I recently accidentally tested this theory and will share my findings in this article.

First, please note the following disclaimers:

  • This is not related to the public policy theory of incrementalism or the law of incremental improvement.
  • There is no official name for this law / theory, so it will be referred to as incrementality in this article if necessary.
  • The data presented in this document were not done as part of a scientific study. The scenario that leads us to do this data analysis has come down to us by pure chance. This is real data but did not have a formal test location, control group, etc.
  • Every situation is different, so if you choose to test this theory for yourself, do so in a controlled and planned manner.

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What is the paid search incrementality?

The concept itself has been around since at least 2009. Melissa Mackey wrote an article in DMNews (now defunct) in March 2009 called Guide to Search Marketing, showing the benefits of SEO over SEM.

The funny name “1 + 1 = 3” was coined later, but the theory has been published and documented many times.

And not just by search engines, but also by industry experts and academia.

(If you have the time, here is a fascinating read of the scientific study carried out in 2010 by Sha Yang and Anindya Ghose for NYU: Analysis of the relationship between organic and sponsored search advertising: positive, negative or no interdependence.)

The theory itself is that when you just do SEO or SEM on their own, they will deliver a visitor to your site, each.

But when done simultaneously, SEO and SEM produce a halo effect. Instead of having two visitors to the site, you end up with three.

Net-net together they drive incremental growth.

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Based on this theory, if you’re doing SEO work for a site, SEM should be part of the marketing mix as well.

In short, SEM and SEO work best together. 1 + 1 = 3.

Paid search incrementality in practice

In January, one of our clients found himself in a difficult situation. For some strange reason, their billing method has been disabled for Google Ads.

This, in turn, led to the closure of their campaigns.

To make matters worse, it took a while for the resolution to become available, which left their Google Ads account offline and dead in the water.

Until then, Google Ads and organic Google accounted for 23% and 23% of their site visits, respectively, or 46% of combined site traffic.

The vast majority of traffic and sales, both paid and organic, are for brand keywords.

Therefore, one would assume that when the payment is taken offline, the bio would increase to the level of 47% of site visits contribution, or at least 40% of total site traffic.

But it was not.

Organic only increased to 36% of total site traffic.

How does paid search incrementality affect SEO (is 1 + 1 = 3?)

The deeper dive

The growth (or lack thereof) of organic visits suggests several things:

  1. SEM actually cannibalizes organic traffic on the brand’s keywords, but that’s not necessarily a bad thing.
  2. Organic traffic will increase, but the conversion rate really won’t change much.
  3. There is a degree of incrementality that comes from SEM and SEO together that cannot be replicated by bio alone, which helps confirm the theory of 1 + 1 = 3.

See high level data on how we arrived at these results:

(To note: Data for all three periods is the same number of days, same days of the week, with no change in sales or promotions.)

Paid search incrementality test

The main observation is that the total contribution of visits and / or sales, when SEM is offline, is not something that bio alone is able to make up.

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To better understand how the data came out, here are the changes:

How does paid search incrementality affect SEO (is 1 + 1 = 3?)

IMPORTANT Notes:

  • The subsequent period does not immediately follow the period of the SEM shutdown. There was a gap of about a week between the two due to a Google Shopping outage, so we had to adjust the post-SEM shutdown period, to make it as apple-apple as possible.
  • There was a total drop in traffic and sales in the post-period compared to the pre-period. This has been observed at similar levels in all incoming traffic to the site. This gap is not reflected in the numbers, but is reflected in the analysis, making the contribution levels more important to focus on.
  • The post-scan period saw a 19% drop in sales, impacting all incoming media.

Analysis:

That SEM is cannibalizing organic traffic was immediately clear.

The amount of organic traffic jumped as soon as SEM was out of the market.

But with nothing else changed, it was clear the bio couldn’t handle the full load of Google search traffic.

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As a result, the total traffic has decreased.

Do you know what else fell? Sales.

When SEM returned to the market, organic traffic declined to a level similar to the pre-stop level

SEM, meanwhile, returned to a level of contribution to total site traffic that was also observed previously, which explains the total decrease in site visits of 19% handicap.

When SEM is in the market with SEO, the incremental growth in traffic is between 30% and 40% (the majority of which comes from branded keywords).

This resulted in an increase of 22 sales (on average) when both were in the market, or $ 2,310 in revenue (assuming an average order value of $ 105).

The media cost of this additional traffic breaks down to ~ $ 800, resulting in a 277% ROI on additional sales.

We assume that when SEM and organic are visible on the same query, there is a boost in searcher confidence.

This leads to the brand having a higher chance of getting the click, compared to having only organic products.

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Key points to remember

Let me present the highlights and key takeaways here:

  • When SEM runs in conjunction with organic listings, you are more likely to get additional traffic to your site than if your organic listing were alone.
  • Yes, SEM ads will steal a bit of the “free” traffic from the bio. But it will overproduce and generate additional traffic, beyond what organic could generate on its own.
  • Incremental traffic will lead to additional sales, but you should value the sales on the additional amount, rather than the total amount of sales.
  • There is actually a validation and a purpose as to why you should bid on keywords when you rank well organically.
  • Further growth and scale beyond the organic level requires investments in SEM.

Organic traffic, provided you rank well, will get you somewhere. It’s up to you.

We have found that if you want to answer the age-old question “How can I get more?” and if you’ve maximized your organic opportunity, investing in SEM is a smart move.

This will generate additional traffic, beyond your original organic volume.

The idea of ​​shutting down your SEM traffic can be stressful, but testing this process (in a controlled and purposeful setting) can help reinforce the value of your SEM efforts.

Try it on a segment of your campaign, and the results may end up justifying higher levels of investment.

More resources:

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Image credits

All screenshots taken by author, March 2021





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