Understanding Incrementality in Paid Search and Its Impact on Organic Search

Incrementality in Paid Search refers to the additional outcomes—such as sessions, conversions, or other metrics—that are a direct result of a marketing strategy. These are the outcomes that would not have occurred if the user or lead had not been exposed to the marketing campaign. Incrementality is different from attributed metrics, which may not accurately reflect the true cost of acquiring a customer (CAC) if they would have converted without the paid advertisement.

Measuring incrementality is crucial for understanding the true Customer Acquisition Cost (CAC) because it helps to determine the actual effectiveness of a marketing campaign. For example, if Google Ads reports a CAC of $10, but half of those users would have converted anyway without the ad, the reported CAC does not accurately represent the cost of acquiring new customers. Incrementality provides insight into the additional value created by the marketing efforts, beyond what would have naturally occurred through organic channels.

Paid Brand Search involves serving Search ads on your brand terms, including permutations and typos of the brand name. The risks and benefits include:

• Brand Protection: Preventing competitors from bidding on your brand terms, which could lead to customer churn or loss of potential leads.

• Controlled Landing Page: The ability to direct users to a specific page, such as a pricing page or a targeted offer, which can lead to higher conversion rates.

• Cheap CAC: Paid Brand Search can be used to decrease the blended CAC and meet targets, as it reaches users who are close to conversion. However, it's often considered a net negative strategy because its incremental conversions are typically lower than its attributed conversions, leading to a potential overestimation of its effectiveness.

To measure incremental clicks and conversions in Paid Search, different methodologies can be employed:

• Incremental clicks: This can be calculated by comparing organic and paid search clicks from periods of high and low spending on Paid Brand Search.

• Incremental conversions: This is more complex and can be measured using blackout regions or Marketing Mix Modeling (MMM). Options include running ads in specific locations to measure differences, using open source MMM tools like Google's Meridian or Meta's Robyn, or signing up for an MMM tool like Paramark. These methods help to determine the true impact of Paid Brand Search and other marketing strategies on conversions.