We develop a rigorous and physically transparent theory of enhancement of third-order nonlinear optical processes achievable in plasmonic structures. The results show that the effective nonlinear index can be enhanced by many orders of magnitude, but, due to high metal losses the most relevant figure of merit, the amount of phase shift per one absorption length, remains very low. This makes nonlinear plasmonic materials a poor match for applications requiring high efficiency, such as all-optical switching and wavelength conversion, but does not preclude the applications where overall high efficiency is not required, such as sensing.

• Received 1 July 2013

DOI:https://doi.org/10.1103/PhysRevA.88.053838