In the fast-paced world of online advertising, Pay-Per-Click (PPC) campaigns are a cornerstone of digital marketing strategies. However, many advertisers face the challenge of budget cannibalisation, where different campaigns or keywords compete for the same budget, leading to inefficiencies and wasted spend. To maximise your return on investment (ROI) in PPC, it’s critical to understand the causes of cannibalisation and implement strategies to prevent it.
This comprehensive guide will explain how budget cannibalisation occurs, how to detect it, and what steps you can take to optimise your PPC campaigns. Additionally, we will explore the tools and techniques that can help you improve your ROI and boost your share of spend while adhering to Google Ads’ best practices.
What is PPC Budget Cannibalisation?
PPC budget cannibalisation occurs when two or more campaigns, ad groups, or keywords in the same Google Ads account compete for the same audience or search terms. Instead of working together to drive traffic efficiently, they fight for the same clicks, leading to increased costs, reduced effectiveness, and missed opportunities.
Why Does Cannibalisation Happen?
Cannibalisation typically arises from several factors:
- Overlapping Keywords: When multiple campaigns target the same or similar keywords, they can compete for the same search queries. This overlap causes bids to increase, and the cost-per-click (CPC) can become unnecessarily high.
- Broad Match Keywords: Broad match keywords, which trigger ads for a wide range of related searches, can lead to unintended overlaps between different campaigns or ad groups.
- Poor Campaign Structure: Without proper campaign and ad group organisation, similar keywords might be included in multiple places, inadvertently causing internal competition.
- Automated Bidding: Automated bidding strategies can sometimes distribute the budget inefficiently, especially when multiple campaigns bid on the same or similar keywords.
To resolve these issues, it’s important to understand the structure of your account and take proactive measures to prevent internal competition.
Signs of PPC Budget Cannibalisation
Detecting budget cannibalisation early is crucial to maintaining an efficient PPC strategy. Here are a few indicators that your PPC campaigns might be cannibalising each other’s budget:
1. Higher-than-Expected CPC
If you notice your cost-per-click rising despite seemingly stable performance, your campaigns might be competing for the same audience or search terms.
2. Reduced Ad Impressions
When campaigns overlap, they can reduce the visibility of your ads. You may see a decrease in ad impressions, even if your budget is sufficient to cover more clicks.
3. Decreased Click-Through Rate (CTR)
Internal competition between ads can cause your CTR to drop. If users see similar ads in response to their searches, it can lead to fewer clicks.
4. Ad Rank Fluctuations
Ad Rank is calculated based on bid amount, quality score, and expected impact. If your campaigns are competing for the same terms, your ad rank can fluctuate, leading to inconsistent performance.
By monitoring these signs, you can quickly identify when budget cannibalisation is affecting your campaigns and take steps to mitigate it.
How to Avoid PPC Budget Cannibalisation
There are several proven strategies to avoid PPC budget cannibalisation and maximise your ROI. Let’s explore these strategies in detail:
1. Segment Campaigns Based on User Intent
The most effective way to avoid cannibalisation is to segment your campaigns based on user intent. By grouping keywords according to the purpose behind the search, you can ensure that each campaign targets a unique set of users, which will prevent internal competition.
- Transactional Intent: Keywords that indicate users are looking to make a purchase or take immediate action. For example, “buy luxury watches” or “best smartphone deals.”
- Informational Intent: Keywords for users who are seeking information, such as “how to care for leather shoes” or “how to clean stainless steel appliances.”
- Navigational Intent: Keywords targeting users looking for specific websites or brands. For example, “Apple official site” or “Nike online store.”
By segmenting your campaigns this way, you can avoid overlap and allocate your budget more effectively to match the user’s search intent. This method also improves ad relevance, which in turn boosts the Quality Score in Google Ads, helping to lower CPC.
2. Use Negative Keywords
Negative keywords are crucial for preventing your ads from showing up for irrelevant search terms. This ensures your budget is spent only on relevant clicks, helping to avoid budget cannibalisation between campaigns.
For example, if one campaign targets “high-end men’s watches” and another focuses on “affordable men’s watches,” you should add “affordable” as a negative keyword to the high-end campaign to prevent overlap. Similarly, for location-based ads, you can add negative keywords for other regions if you are targeting specific geographical locations.
Adding negative keywords also helps eliminate wasted spend on searches that are not likely to convert, further optimising your PPC performance.
3. Refine Ad Group and Campaign Structuring
A key element of preventing cannibalisation is the structure of your campaigns and ad groups. Ensure that each campaign and ad group has a unique focus, and avoid grouping dissimilar keywords together.
For instance, if you’re selling a range of products such as watches, bags, and shoes, create separate campaigns or ad groups for each product type. This will allow for more precise targeting and budget allocation, reducing internal competition. Within each ad group, make sure to target keywords that are closely related to each other to further streamline the budget allocation.
Additionally, ensure that your ad extensions (like sitelinks, callout extensions, and structured snippets) are tailored to the specific focus of each ad group. This improves relevance and helps you stand out from competing ads.
4. Optimise Bidding Strategies
When using manual bidding, you have more control over how much you’re willing to pay for each click. By adjusting your bids based on performance, you can ensure that your budget is spent efficiently. Monitor the conversion rate, CPC, and quality score for each campaign to optimise bidding.
For automated bidding, such as Google Ads’ “Maximise Conversions” or “Target CPA” (Cost Per Acquisition), Google’s algorithms determine how to allocate your budget based on your goals. However, these algorithms can sometimes cause budget cannibalisation, especially if multiple campaigns target the same keywords. In such cases, it’s important to regularly monitor campaign performance and adjust your settings as needed to prevent internal competition.
5. Monitor Search Impression Share
The Search Impression Share metric shows you how often your ads are shown compared to the total eligible impressions. If you notice that one of your campaigns is losing impression share due to budget limitations, you may want to increase the budget allocation to that campaign. Conversely, if a campaign is overspending without providing a high return, it may be worth reallocating some of its budget to other high-performing campaigns.
Tracking impression share helps you optimise your ad spend and ensure that your budget is being used as effectively as possible. You can find this data in Google Ads under the Auction Insights report.
6. Use Ad Scheduling to Optimise Budget Spend
Ad scheduling allows you to show your ads only during specific hours of the day or days of the week when your audience is most likely to convert. By fine-tuning your ad schedules, you can allocate your budget to peak performance times, reducing wasted spend and preventing unnecessary competition between campaigns targeting similar keywords at the same time.
For example, if your data shows that your audience is most active during lunch hours, increase your bids or set a higher budget during those times to maximise visibility. Similarly, if certain days of the week perform better, you can allocate more spend on those days.
High-Volume Keywords for PPC Campaigns
Effective keyword selection is crucial for driving the right traffic to your website. By focusing on high-search-volume keywords, you can ensure that your ads are displayed to a larger, more relevant audience. Below are some high-volume keywords that can help boost the effectiveness of your PPC campaigns:
Keyword | Monthly Search Volume |
Search budget optimization | 1,500 |
Avoiding PPC cannibalisation | 900 |
Maximising PPC ROI | 2,300 |
Keyword overlap in paid search | 1,200 |
Google Ads bidding strategies | 3,100 |
Negative keywords for PPC | 2,000 |
PPC ad spend management | 1,800 |
Search term analysis in Google Ads | 1,400 |
By strategically targeting these keywords, you can ensure that your campaigns are seen by a larger audience, ultimately improving your chances of generating conversions and maximising your ROI.
Tools for Optimising PPC Campaigns
Several tools can help you optimise your PPC campaigns and avoid budget cannibalisation. Here are some of the most effective ones:
Google Keyword Planner
Google’s Keyword Planner is an indispensable tool for keyword research. It provides insight into search volume, CPC estimates, and competition for specific keywords. By using this tool, you can find high-traffic keywords that align with your goals and help you optimise your campaigns for better performance.
SEMrush and Ahrefs
Both SEMrush and Ahrefs are powerful tools for competitive research and keyword analysis. They can help you identify gaps in your strategy, analyse your competitors’ keywords, and discover high-performing keywords to target in your campaigns.
Conclusion
Avoiding PPC budget cannibalisation is crucial for maximising the efficiency of your campaigns and ensuring that your advertising spend delivers the best possible results. By understanding the causes of budget cannibalisation, monitoring key performance indicators like CPC, CTR, and impression share, and implementing best practices such as keyword segmentation, negative keywords, and ad scheduling, you can significantly improve your PPC performance.
Incorporating strategies like refining ad group structures and using automated bidding tools can help optimise your budget allocation, leading to higher conversion rates and a better share of spend across your campaigns. Additionally, leveraging tools such as Google Keyword Planner and SEMrush will give you valuable insights into keyword performance, ensuring that you’re targeting the right audiences.
By regularly analysing your campaigns and adapting to emerging trends, you can continue to refine your PPC strategy, reduce wasted spend, and ultimately maximise ROI. Avoiding budget cannibalisation not only improves your ad spend efficiency but also helps you stay ahead of the competition in an ever-evolving digital landscape.
If you follow these steps and remain proactive in optimising your campaigns, you will position your business for long-term success in the competitive world of online advertising.
