Last year, researchers at Google released a meta-study quantifying paid search’s incremental value based on organic rank. They found that, on average, even when an advertiser ranked in the first organic position, 50% of ad clicks were incremental. More recently, Google made available paid and organic reporting giving marketers a tool to measure their own incremental value and identify traffic acquisition opportunities.
Despite the availability of data, establishing incremental value with confidence is challenging. One of the most common forms of this question relates to brand queries: how should we value brand paid search when we already own the results page from an organic perspective? This is a fair question for megabrands making huge advertising investments that lead to unaided brand awareness… but it’s only one way to look at the issue.
Paid search is also an optimization problem that shares similarities to other disciplines like product. It can be approached with the same thought process Amazon has when they work to decrease checkout process abandonment or AT&T’s call center team optimizes their IVR to increase answer rate and other success metrics.
Take a look at the results page for several large advertisers who use paid search to complement organic results. They’re able to exercise control over what searchers see and, through self-selection, direct them to relevant content. Sure, someone could click an organic result and, with a few more clicks, probably end up on the same page but you’d never hear a product manager apply that logic to a sign-up or checkout process.
Relatively trivial CPCs are a small price to pay for the ability to harvest commercial intent and align visitors more closely with the content they seek. To take these examples a step further, look at brand modified terms for a company like FedEx. When appending [locations] or [freight] my results change as FedEx is able to translate query into intent and direct me toward more relevant content—content they have invested resources to develop and distribute.
Disclosure: I work at Google but these thoughts and opinions are my own.