How to Avoid Paid Search Cannibalization

Your field is competitive and the market is saturated. Getting organic traffic to your site has been difficult, so you turn to paid search advertising to pull in more traffic. You’ve seen your competitors make successful plays with this marketing strategy, and as a result, they’ve driven up the amount of traffic to their website and have boosted their conversion rates, leading them to a greater ROI.

As a small business owner who is getting his feet wet in paid search advertising, and who has had some success, it’s tempting to want to run multiple paid search ad campaigns and have them bid for the same key terms. It just makes sense, right? Shouldn't it give you double the return?

Actually, you risk cannibalizing one of your ad campaigns.

The problem is you are competing against yourself, advancing one campaign at the expense of the other. What you end up doing is driving up the bid price and increasing your ad spend. It’s one of the biggest forms of waste.

Avoid this mistake.

In this article, we’ll tell you why two competing ad campaigns is a bad idea, how to get around it, and how to determine whether one campaign is “eating” the other.

Why One of Your Paid Search Campaigns is Devouring The Other

“I’m cannibalizing my paid search campaign? One is devouring the other? That just doesn’t make sense. Why does that happen?”

We explained a moment ago the cost of running two campaigns and having them compete for the same keywords, but these scenarios will give you a better picture.

Scenario #1

Let’s say you own Pacific Palisades Realty. You want to broaden and diversify your business, so you develop a second company within the same industry called John Lander’s Realty, and you create a website for it.

You have an offer you deem to be valuable on the new site. You want to draw in more leads and get them converting. Since you’ve seen the ad campaigns for your original site do well, you want to reap the same rewards, so because they are the same industry and perhaps provide the same types of services, you have built paid search ad campaigns for each and have placed bids for the same keywords.

Not long after doing this, you see no improvement in traffic or conversion rates or, worse, you see a dive in both.  

Rather than owning more real estate within the search engine results pages, one of your paid search ad campaigns is stymying the other’s ability to rank. This is called cross-domain cannibalization, and it can result in you losing traffic, diminishing your ad rank, and increasing your ad spend.

Scenario #2

Now you just own Pacific Palisades Realty, but you want to run multiple campaigns under that domain and vye for the same keywords. Your end result may prove to be no different from scenario #1--in both you are running two paid search ad campaigns in the same race...one will lose.

You Can’t Outwit the Google Bots

Ok, you’re probably still wondering how exactly cannibalization impacts your ranking, traffic, and spend.

Let’s just say it: Google’s search engine is smart, like really smart. It uses site crawlers to automatically find and scan websites by tracing links from one webpage to another.

This all goes to say that Google is able to determine whether the ad campaigns that are bidding for the same keywords are coming from the same domain or related domains.  

With the one of the best tracking systems, Google knows by the following tell-tale signs:

• Duplicate content
• Same registered owners
• Same servers
• Duplicate ads, templates, landing pages or webpages
• Backlinks

You’ve left them a trail. Once Google recognizes this (which btw doesn’t take long), should there be a search query using your shared keywords, the search engine will determine which of the two campaigns to advance, which is often the one deemed most profitable for them, not you. They will choose the ad with the highest cost-per-click (CPC). Your second ad then gets put back in the pool and matched against your real competitors who, if they have a better quality score and/or a higher cost-per-click bid, will move up the ranks.     

You have cannibalization issues in your midst. You are essentially driving traffic to one ad campaign and losing traffic on the other. You are also increasing your CPC.

Google’s AdWords is an auction; it is a bidding system. If your campaigns are vying for popular keywords and are among a crowd of others vying for those same keywords, the cost per click will spike. Throwing an additional hat into that ring will only increase your CPC as both ads must beat the highest bid to rank in one of the coveted ad positions. What you are doing is paying twice, and you are at risk of losing on at least one campaign.

If you drive up the cost and begin to run out of ad spend as a result, you no longer have the budget to maintain your ranking. As your ad spend reduces, your rank position lowers and your ad will appear fewer times. This will result in less traffic to one or both campaigns.

How to Avoid Paid Search Cannibalization  

Avoiding paid search cannibalism is easy, but it does require a sacrifice on your end. To keep from overspending and hurting your rank, traffic and conversion rates, you will need to do one of the following:

• Select one ad campaign to bid for the shared keywords. It would behoove you to choose the best performing campaign
• Rotate campaigns for the shared keywords. It is typically advised that you run one for a three-month stretch before rotation occurs.
• Split the shared keywords between the campaigns. Rule of thumb is to use no more than 25 keywords per ad group, so if you do 12/12 you will need to choose additional keywords to fill the gap. We recommend long-tail.

How to Determine Whether Cannibalization is Impacting Your Paid Search Ad Campaigns

Whether you are running two competing campaigns under the same domain or under a related domain, you need to know how much impact cannibalization is having, otherwise you could lose big. And if you aren’t pulling and analyzing data around your campaigns, you wouldn’t even know it.

To determine the full impact cannibalization is having, you will need to extract data for both campaigns and compare the numbers side-by-side. The analysis part will be key to helping you select your next steps.

The metrics you should specifically look at, include:

• Click-through-rate (CTR)
• Ad position
• Conversion rates
• Cost-per-acquisition (CPA)
• Cost-per-click (CPC)
• Return on ad spend (ROAS)

For a full list of metrics you should calculate and how to calculate them, go here.

Pro tip: If you started one campaign before the other, you should pull data from as far back as six months ago or, if that campaign hasn’t been running that long, as far back as the start.