Drawbacks of Keyword Cannibalization in Advertising

1. Decrease in Advertising Effectiveness:
Keyword Cannibalization occurs when multiple ads compete for the same or similar keywords, leading to a dilution of effectiveness. This competition can negatively impact key performance indicators like click-through rate (CTR) and conversion rate, resulting in a decrease in the overall performance of the advertising campaign. Each ad may receive fewer clicks and conversions, reducing the campaign's impact.

2. Increase in Cost:
When multiple ads or ad groups bid on the same keyword, it can intensify competition and drive up the cost per click (CPC). As a result, advertisers may end up paying more for the same traffic, leading to increased advertising costs without necessarily achieving better results.

3. Decrease in ROI:
The combined effects of decreased effectiveness and increased costs can lead to a reduction in Return on Investment (ROI). Keyword Cannibalization may cause the advertising budget to be spread too thinly across competing ads, resulting in inefficient use of resources and a potential decrease in profitability.

4. Difficulty in Data Analysis:
When multiple ads are competing for the same keyword, it becomes challenging to accurately measure which ad is performing the best. This overlap complicates data analysis, making it difficult to identify the most effective ads and formulate the optimal advertising strategy. This lack of clarity can hinder decision-making and campaign optimization efforts.

Conclusion:
Keyword Cannibalization can negatively impact advertising effectiveness, increase costs, reduce ROI, and complicate data analysis. To avoid these drawbacks, advertisers should carefully manage their keyword strategies, ensuring that ads are targeted effectively without unnecessary competition within the same campaign.