Are you wasting your Google Ads budget bidding against yourself?

Imagine this: You are a wealthy art lover seated in a room filled with beautiful paintings and surrounded by other art lovers. You have a numbered paddle in one hand and a glass of champagne in the other. You are at the center of an auction and about to bid against all the other people in the room for the artwork you want.

Now imagine you are blindfolded! The auctioneer’s rapid-fire speech guides you as prices go higher and higher. 

You periodically raise your paddle to make a bid; you assume that those around you are doing the same. But what if they’re not? What if the joke is on you, and you’re feverishly raising your paddle again and again to win the auction while everyone else in the room is motionless, watching you bid against yourself? 

Never forget: Google Ads is an auction. Most of the time, you are blind, unaware of competing bids for the keywords your business needs to win.

At BrandPilot, we call the phenomenon of a search ad with no competition the “Uncontested Paid Search Problem.” 

The Uncontested Paid Search problem 

The BrandPilot definition of the Uncontested Paid Search ad is a Google search where no competitor ad is present across several search terms. Yet, you are still paying for your sponsored ad CPC, even without competition. You are essentially bidding against yourself.

Here’s an example of an Uncontested Paid Search ad. In this case, you can see that the sponsored ad is directly above the organic result, meaning there is no other competition for this search result.

There are two problems with these Uncontested Paid Search ads:

1. Wasted ad spend on organic traffic: A significant number of people simply click the sponsored ad as it appears at the top of their search, unnecessarily costing you money.
2. Overpaying for clicks in paid search: You want people to click on your sponsored ad, but you are unnecessarily paying a high CPC in the absence of competition.

The critical takeaway here is that advertisers are paying high CPC for ads with no competition every hour of every day. The whole point of the Google keyword auction is to bid fairly against your competitors on a CPC for a keyword, so why are advertisers paying the same CPC even when competition is not present?

When do ‘uncontested search ads’ happen?

Instances of uncontested search ads are more pervasive than you might think. While results will vary by industry, data from BrandPilot indicates that Google Ads for:

• Branded keywords face no competition 20–30% of the time.
• Non-branded (general search) keywords experience moments of no competition but at a rate of 5–10%.

This makes sense as there would be less competition for a keyword specifically related to a brand or product name.

How big is this problem?

Uncontested search ads are a silent thief of marketing budgets. While this topic is not widely discussed, it has enormous impacts on the marketing industry.

Here is one way to measure this industry-wide issue:

• Google’s annual search revenue in 2024: $264 billion (Statista)
• Ad budget breakdown: On average, 18% ($47 billion) is spent on branded keywords, while 82% ($216 billion) goes to non-branded keywords. (Dreamdata)
• Estimated wasted ad spend: Advertisers may be wasting approximately $11 billion annually on branded CPC and approximately $16 billion on non-branded CPC.

How much are you spending on search ads? If you could recover approximately 25% of your branded keywords budget and another 7.5% of the non-branded keyword budget, where would you invest those savings?

How to fix the uncontested paid search ad problem

There are really only two options to optimize for searches with no competition:

1. Suppress your sponsored ad and let your organic search results float to the top of the search results page.
2. Replace your current sponsored ad with a clone that you gradually bid-walk down to the lowest possible CPC.

Option 1: Let organic win the day

For this option, marketers can simply pause their existing sponsored ad when there is no keyword competition at that moment. If you are conquering organic search for that keyword, this will allow your organic search results to appear at the top of the search results page and drive organic traffic to your website.

Important note: You would need to ensure that you rank No. 1 organically for that keyword search. Be mindful that, as a marketer, your organic search results might not include your current promos, copy, buyers’ journey, etc.

Option 2: Bid-walking down a CPC

In this scenario, a marketer would allow the sponsored ad and the organic link to appear simultaneously on the search results page.

In this case, marketers create a clone of their sponsored ad that is displayed only when there is no competition. Over time, marketers reduce the CPC of this “no-competition clone.” This allows them to retrain the search algorithm and get the CPC for this cloned ad all the way down to $0.01!

Maintaining search traffic

The above processes are designed to eliminate unnecessary Google Ads spending and create more budget for you to drive growth and revenue. Every month, brands who execute strategy for uncontested ads typically reclaim approximately 30% of their branded keyword budget and another 5–10% of non-branded keywords. 

The real-world example below shows how a global fashion brand maintained website traffic while dramatically decreasing its Google Ads spend. In this case, the marketing team elected to simply pause their sponsored ads whenever there was no competition for the search term. Maintaining search traffic is more important to any marketer.

Here, you can see their blended CTR:

Reducing Google Ads spend

While maintaining search traffic, the marketing team was able to dramatically reduce its daily Google Ads spend simply by not paying a high CPC when a search result had no keyword competition. They were able to go from an average spend of $500 per day down to less than $100 — all while maintaining search traffic!

Final thoughts

Here’s the no-brainer: a flaw in Google Ads has you bidding to win the auction, even when there is no competition for your selected keywords. A seven-day inspection of your Google Ads data can help determine how the Uncontested Paid Search problems is impacting your search campaign budget. 

You can save approximately 30% of your branded keyword budget each month and experience an 11% increase in site performance based on the redistribution of those wasted budgets. 

Book some time to discuss your keyword costs and get a free Google Ads campaign audit.