PPC & Media

Do Branded PPC Ads Cannibalize Organic Search?

 “Should we be bidding on our branded terms?”

– Every client ever

It is the most common question I get asked as a PPC manager, and one that I have always had to rely on anecdotal evidence, and case studies from major data providers to answer. “Of course you should,” I’d say, “synergy and all that. The sum of the parts is greater than the whole. Bidding on your Branded terms should bring a 40% lift in clicks from those branded keywords.”

Truth be told, it’s a widely accepted truth among those managing PPC campaigns that bidding on branded keywords is the right thing to do, and a widely questioned practice by those skeptical brands that pay for their management services. So what are their concerns? Are they justified? How can we definitively answer this question without relying on ambiguous, standardized data?

Is my agency just using Branded keywords to inflate their stats?

I can’t necessarily answer this one for you. It is true that branded keywords are typically going to be the lowest cost (by virtue of highest possible relevance), highest converting keywords. Your results with a Branded campaign will almost surely be better than without. Does this mean your campaign manager’s intentions are corrupt? Probably not. Most likely they are relying on the best data they have available to them, which suggests bidding on Branded keywords is a good move (more on that to come).

If you truly believe there is some foul play at hand, there’s probably a greater issue of trust that should first be addressed.  Hopefully this can be resolved by improving communication, and establishing where Branded keywords fit within the overall strategy. If that still isn’t enough, consider developing separate goals for Branded/Non-Branded campaigns, rather than a roll-up. Worst-case scenario, you can adjust your contract structure to remove all performance based incentives.

While there may be a few bad apples, I can attest that any of the dozens (hundreds?) of PPC managers I’ve met through my career are doing just what they think is right for their clients.

Kevin Garnett Padding Stats

* Also referred to as ‘padding the stats,’ and widely seen in the worlds of online gaming and professional sports. The most recent tracking of stat padding (‘03-‘04) shows Kevin Garnett to be the most prolific garbage time player in the game. If updated, I’m confident the ’12-‘13 stats would find similar results.

Aren’t we just paying for traffic that we would already get from Organic results?

This is the big one, and it’s a completely valid concern to have. Until recently, there was very little we could do to definitively answer this question. The best tests I’ve seen performed will pause a Branded PPC campaign and take a before/after snapshot to compare total traffic. If the total traffic from both sources was greater than the organic only equivalent, then an incremental lift did exist.

Organic + Paid > Organic only

The problem with this data is that you’re comparing across two completely different date ranges, where variance is bound to occur. Hopefully you’ve picked a fairly steady period in your year where seasonal fluctuations are minimized, but there are always outside influences that are bound to impact your test.

I’ve performed this test myself half a dozen times, as well as quoting the results I’ve seen published around the industry. Google even performed their own research to confirm that ad clicks do not cannibalize organic traffic, though their findings of 89% incremental traffic was a little high (RKG did a study of their own and poked a few holes in the Google sampling). Ultimately I settled on 40% as a reasonable expectation, with enough industry support to back those claims if needed.

Time for more advanced measurement

Last week, we introduced you all to the new Paid & Organic report within AdWords, which combines Paid data from AdWords with Organic data from Webmaster Tools. Now let’s put that report to use to get some real, actionable figures on an Account-by-Account basis.

1. Filter by Branded keywords or Branded campaigns

1.Filter  

or

Filter_By_Campaign

2. Compare ‘Organic shown only’ with ‘Both shown’

One of the major flaws in Google’s study was that they compared traffic of paid keywords that weren’t driving any organic clicks. This, of course, is increased traffic, but not representative of incremental lift in the sense we are attempting to measure. To prevent ourselves from making this same mistake, we need to isolate only keywords that contain both Search Result Types: ‘Organic shown only’ & ‘Both shown’. Sadly there is no way to filter by Result Type, so you’ll have to download into excel and do a little manual sorting.

Ultimately, we’re looking for a total across all (or most) Branded keywords in the following metrics.

Paid and Organic Report

  1. Total queries
  2. CTR of Organic only
  3. CTR of combined Organic + Paid
  4. Organic clicks with Both shown
  5. Paid clicks with Both shown

3. A little math

When a paid ad appears along side the organic results, CTR increase from 32% (#2) to over 47% (#3). That increase of 15% is a pretty significant boost from your highly coveted Branded terms. Applying this to the total queries that occurred over this time (#1), we can see that a 15% increase equates to almost 20,000 clicks!

Additional Clicks

Unfortunately, though, we’re not done there. The sad fact that we must be aware of is that those PPC ads probably took a few clicks that would have otherwise gone to the organic positions. This is the infamous ‘cannibalization’ we’ve referred to before, where searchers don’t pay particular attention to which link they click, and by virtue of the top position on the page, ad extensions, or pretty colors, they click the ad instead of the organic link. We can see that when the ad appears along side the organic result, Organic CTR (#4) decreases by 3.5%

Stolen Clicks

But there is good news. We generated more clicks than we stole. Proof that there’s value to this approach. How much value, exactly?

Incremental Value

Holy crap, 40%!! Maybe not on the dot, but validation none-the-less.

What did we learn?

Cannibalization absolutely does occur when bidding on Branded keywords, but it may not be as significant as you think. In this instance, the cannibalized traffic only accounted for ~11%. We can consider this an 11% markup on our Branded CPCs, and easily establish new goals based on this information.

A 38% incremental gain in traffic from our highest value, lowest cost, most qualified keywords? I don’t know of an advertiser who wouldn’t want those results.

The real takeaway from this analysis is not a new number to reference. Performing this analysis across all of our clients, we’ve found a range from 10%-65% of incremental traffic. Results will vary with every account, with different levels of competition, organic rankings, conversion rates, etc. The real finding is a repeatable, data-driven process that can answer one of the tougher questions we’ve faced for years. Should we be bidding on Branded keywords? Depends. Let’s find out.

Craig Galyon

Craig Galyon - Digital Media Team Manager

Craig Galyon (pronounced "Craig") is the Digital Media Team Manager at SwellPath, with a background in PPC, Display, Rich Media, and Social advertising. When he's not managing killer media strategies for his clients, you'll find Craig brewing beer and playing competitive kickball. Rarely together.

16 Responses to “Do Branded PPC Ads Cannibalize Organic Search?”

  1. Nick Piermp

    Excellent evidence for what I assume most of us just kinda presumed.

    Another good reason to bid on your brand is to make it more expensive (and less appealing) for your competitors to do so.

    Reply
  2. Roman Maeschi

    Hi, great article on cannibalization, thanks a lot for sharing.
    Points 2, 3 (and 4) in aren’t CTRs but clicks/search query…which can be substantially more than the CTRs as depending on the keyword settings (broad, exact, etc.) the amount of impressions may vary significantly.

    Reply
  3. Sara

    Craig, Thanks for the awesome article. Quick question – what would cause the organic shown only NOT to show in the report? Only ad shown only and both shown show up. (Specifically for branded terms.)

    Reply
    • Craig Galyon

      Hi Sara,

      Most advertisers who have bought in to paying for Branded terms will have campaigns running 24/7. For the purposes of this test I had to look at a period of time where the Branded campaigns were actually paused, and Organic Only data was able to accrue, but that typically isn’t the case.

      Another reason would typically be that your site simply doesn’t rank highly enough in Organic results, but if you’re saying they are Branded keywords, then that option seems unlikely.

      Reply
  4. Mickael

    Hi, excellent article !
    You didn’t mention if the test had any impact in your global quality score of your account, if you saw a big increase in your cpc, big decrease in your ctr and conversion rate, … only for ppc.

    Reply
  5. nTurn

    I noticed something interesting. organic clicks/query was 0.62%. when we put the query as a negative and ran the report a week later, organic clicks/query was 4.6%. So when both are running, it looks like adwords wouldnt show ads to some traffic it knew probably wouldn’t click resulting in a very poor “organic only” click/query. That’s the only thing I can think of as the cause.

    Reply
  6. Mike

    As a Google PPC ninja once told me, it is important to constantly split-test new ads so that messaging is consistently being refined in a competitive marketplace. That happens on at least two levels: 1) The ads themselves, inside Adwords. It has easy split testing for ads and reports optimal performance. 2) On your landing page itself. That’s where a lot of people miss the boat on conversions. They blame the ads but don’t split test elements or versions of their landing pages. There are lots of ways to do this, but it’s kind of technical and as a business owner I couldn’t really be bothered with learning the details, but I can refer you to Simon. Call him – 302-401-4478.

    Reply
  7. Andries

    This article is a great start to the story. However, what is missing is the fact that the incremental measurement is only Google vs Google. You are securing more clicks from Google by running brand SEM alongside organic, but the missing piece is that the user searching the brand term is not incremental (the have already seen your brand through other channels and likely already visited your site). So therefore, the true ROI of your brand term in SEM is very low when measured effectively (not last click).

    Reply
    • Craig Galyon

      Hi Andries, thanks for the comment, and excellent point!

      This article is definitely very narrowly focused on a single calculation/analysis, but you’re absolutely right, you certainly need to fill the funnel with first-click touch points to drive increased volume of Branded searches. Hopefully what we got from this article was that of the searches that do occur already, you can actually still improve the clicks/visits to your site. We could spend another 10 blog posts discussing attribution across all clicks, and non-branded efforts to scale your brand impressions.

      Thanks again for the comment!

      Reply
  8. Google Week, Day 1: Search marketing - Louis Gudema Blog - Boston sales digital marketing

    […] if your organic link is high on page one, having search ads also will increase your click-throughs. What more proof do you need than this: Amazon, which knows a thing or two about online marketing, […]

    Reply
  9. Jorge

    Hey Craig. Are you sure you’re doing it right? You calculate in first step 47,12% minus 31.57% CTRs from Total Queries.
    But: this means you’re doing math with clicks you never had.
    Your 19,940 MORE CLICKS is nothing but 47,12% of Total Queries minus 15,32% of Total Queries (15,55%).
    What am I missing?

    Reply
    • Craig Galyon

      Gosh, I sure hope I’m doing it right…

      Let’s see. You’re right that the calculation in the first step is measuring based on clicks that never actually occurred. What we’re trying to find in that step is the “what would have been” situation if organic+paid existed for every query, and subtract from it the “what would have been” if only paid existed in every situation. That will provide us with the TOTAL increase in clicks from having paid in the mix. As you mention, this isn’t actual clicks that occurred, just the total potential.

      The second step is more about the allocation of those clicks. If there is a substantial increase, but it comes from shifting too many clicks from organic to paid, then it may not be worthwhile. In this case, though, that drop in organic was pretty marginal compared to the total lift.

      The last step is converting this to a percentage, since we don’t want to confuse the situation using totals that never actually occurred. We’re just trying to come up with some hard figures, as a ratio, to see if this concept is beneficial or not. In this case, it turned out to be so.

      Hope this helps to clarify, thanks for reaching out!

      Reply
  10. Catalina

    Hi Craig,

    Get report! I have been trying to work this out for days now but my stolen clicks keep coming out in negative!

    Unlike your example, when the ad appears along side the organic result, Organic CTR increases in our data instead if decreases.

    I’m trying to get a total figure instead of doing it by individual keyword so we can report top line.

    eg:
    Total queries = 53,127

    Combined stats:
    Both shown clicks to queries = 73%
    Organic only shown clicks to queries = 19%

    MORE CLICKS:
    39,023 – 9881 = 29,142

    Organic only stats:
    Both shown clicks to queries = 37%

    STOLEN CLICKS
    9881 – 19,571 = -9690

    INCREMENTAL CLICKS = 38,832

    Not sure more incremental clicks could be greater than more clicks because incremental clicks should come out of the more clicks yeah?

    INCREMENTAL / ORGANIC CLICKS:
    38,832 / 9881 = 393%

    We have been using the % of incremental clicks against the revenue bought in by PPC to try and get a rough idea of how much income that means. So say PPC bought in $10k as a source, 393% of $10,000 is $39k which is more than the amount PPC bought in.

    Seems illogical!

    Appreciate your help if you could email me :D

    Thanks,

    Catalina

    Reply
    • Catalina

      Further, it doesn’t make sense that Organic CTR decreases when both ads and organic SERPs are shown as we know showing in both places increases the consumers trust so they are more likely to click when they see both an ad and an organic SERP than when they see only the organic SERP…

      Reply
    • Craig Galyon

      Hi Catalina, that’s definitely an interesting problem. You’re right, the one big glaring difference is that when serving ppc ads, your ORGANIC placements jumped from 19% to 37%. Typically we’re seeing this number drop, as some of that traffic actually goes to the paid links instead. So in your case, this would suggest you didn’t see any “stolen” traffic, but instead the addition of ads increased Organic 18% + 36% for your paid links. Win win.

      I think the consolidation of your numbers might be throwing off results a bit. You might be trying to calculate lift based on keywords that don’t actually have paid + organic. That list is comprehensive, so it will show you cases where only Organic ever showed (think some obscure long-tail non-branded keyword that you might not be bidding on).

      Instead, here’s what I’d recommend. Take a few keywords that you think will be representative of each category of keywords, AND that you know for certain have both paid and organic information. So you might make 3 segments, a Branded keyword analysis, non-branded keywords that have high organic placement, and non-branded keywords that have lower placement. Select 2-3 keywords for each, and do the analysis. That would ensure you don’t compromise your data integrity, and give a little deeper insight in how each result might differ.

      Give it a try and let me know if your results differ at all this time around.

      Reply
  11. Kelly Kid

    Here’s a wrinkle; we launched a ppc campaign for a client and are seeing an uptick in branded, organic, and direct search directly correlating to the launch of the ppc campaign. If we’re getting 100 clicks a day, we’re getting 10-100 clicks via other direct typing methods. People see an ad and rather than click, they type in the website directly.

    Reply

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