Incrementality is a term that is associated with how many PPC ad clicks are caused by a lack of similar organic results. In other words, if you have a PPC ad that targets a specific keyword phrase and you receive 100 ad clicks in the absence of an associated organic result, 50 of those are said to be incrememntal if they are not replaced by clicks on organic results when those organic results are present.
Let’s take a concrete example.
Let’s say you are targeting the keyword phrase “red banana.” If you have a PPC ad that you run periodically targeting that phrase and you get 100 clicks a day on that ad when there is no organic search result for your landing page, we’ll consider that your base of comparison. Now, let’s say you have an organic search result that appears alongside your PPC ad. If you get 50 clicks on the organic search result when it is present and 50 clicks on the PPC ad, then you do not have any incremental clicks on the ad. However, if you only get 25 clicks on the organic result and 50 clicks on the PPC ad, then 25% of your ad clicks are said to be incremental.
Google recently performed a study concerning incrementality on ad clicks.
The interesting thing about this study is that it shows that 50% of ad clicks are incremental when the advertiser has the top ranking for the targeted keyword phrase. If your organic result is in the 2nd, 3rd, or 4th positions, then advertisers’ incrementality rate is 81%. The incrementality rate is 96% for advertisers whose organic rankings are in the 5th position or lower.
While Google is careful to point out that individual advertisers will have differing results, this is a telling study. For one thing, it illustrates the importance of high organic search rankings. But it also says that PPC advertising is more important when your organic search rankings are lower.