If you rely on Google Ads’ AI tool Performance Max (PMax for short) to drive business growth, you likely trust the metrics you see in your dashboard. You see conversions, you see a healthy Return on Ad Spend (ROAS), and you assume the algorithm is working in your favor. But for many business owners, those numbers are hiding a costly secret.
We call it “Ghost Spend.”
Ghost Spend isn’t just money wasted on bad clicks; it is far more deceptive. It is ad spend that claims credit for conversions that would have happened anyway. It is the budget burned on customers who were already searching for your brand, or “new” leads that are actually returning visitors. It inflates your performance reports while draining your actual profitability.
To fix this, you first need to understand where the money is going.
Where Your Budget Disappears: The Data Anchor
Before we dive into the solution, look at the breakdown below. This table highlights where the average Performance Max (PMax) campaign bleeds budget without you realizing it.
| Category | Typical "Ghost" Spend % | Common Leakage Source | Impact on ROAS |
|---|---|---|---|
| Brand Cannibalization | 15-25% | PMax bidding on existing brand terms | Artificial Inflation |
| Unproductive Display | 10-15% | Mobile app placements & "junk" sites | Budget Drain |
| Returning Visitors | 20-30% | Retargeting existing buyers as "new" | Zero Incremental Growth |
What Exactly is Ghost Spend?
Ghost Spend occurs when an automated system, like Google’s Performance Max, prioritizes “easy wins” over incremental growth. Because the algorithm is incentivized to show you a high ROAS, it often takes the path of least resistance.
Instead of fighting to win a new customer who has never heard of you, PMax often targets people who are already typing your business name into the search bar. These users were likely going to click on your organic listing for free. When you pay for that click, you aren’t acquiring a customer; you are paying a toll on a road you already own.
The result? Your dashboard looks great, but your bank account doesn’t reflect the same growth.
The Ghost Spend Audit Checklist
You don’t have to fly blind. If you suspect your budget is being eaten by Ghost Spend, follow this 5-step manual audit to see what’s really happening inside your PMax campaigns.
1. Check Your Search Terms
Go to Insights > Search Terms. Look specifically for your own business name or variations of it. If “Brand” terms make up a significant portion of your conversions, your PMax campaign is cannibalizing your organic traffic.
2. Review Location Reports
PMax can sometimes be aggressive with “Location Interest” rather than “Location Presence.” Check your location reports to ensure you aren’t paying for clicks in countries or regions where you don’t ship or provide services.
3. Audit Placement Reports
Navigate to the “Where ads showed” report. Sort by impressions. If you see a high volume of mobile apps (often gaming apps with accidental clicks) or low-quality display sites, you are likely experiencing the “Unproductive Display” leakage mentioned in the table above.
4. Analyze Asset Groups
Are your images and headlines actually relevant to the audience signals you provided? Often, we see generic assets being served to highly specific audiences, resulting in low engagement and wasted impressions.
5. Verify New vs. Returning Customers
If your goal is growth, you need new blood. Check your “New vs. Returning” customer data. If 30% or more of your spend is going toward returning visitors, you are paying a premium for retention that could likely be handled via email marketing or organic channels.
The McCord Solution: Exorcising the Ghost Spend
At McCord Web Services, we believe that automation requires supervision. You cannot simply “set and forget” a PMax campaign and expect it to act in your best financial interest.
Our approach is “Human-in-the-Loop” management. We actively combat Ghost Spend by:
- Implementing Negative Keyword Lists: We ensure your PMax campaign isn’t bidding on terms that don’t drive value.
- Enforcing Brand Exclusions: We force the algorithm to hunt for new customers rather than poaching your existing brand traffic.
- Monitoring Placements: We aggressively exclude mobile app categories and junk display networks that drain budget without delivering leads.
By cleaning up this waste, we recover budget that can be reinvested into genuine growth strategies—like preparing for the future of search.
The Next Frontier: From SEO to GEO
Once you stop wasting money on Ghost Spend, the question becomes: where should you invest it? The digital landscape is shifting rapidly. By 2026, the way users find you will be fundamentally different. We are moving from the era of Search Engine Optimization (SEO) to Generative Engine Optimization (GEO).
The Paradigm Shift: The AI Browses for You
For two decades, the goal was to get a user to click a blue link and visit your website. In the near future, AI agents (like ChatGPT, Gemini, or Perplexity) will browse the web for the user. The user will ask a question, and the AI will synthesize an answer.
If your business isn’t cited in that answer, you don’t exist.
AI Summary: The Difference Between SEO and GEO
| Feature | Traditional SEO | Generative Engine Optimization (GEO) |
|---|---|---|
| Goal | Click-Through (Traffic) | Citation (Authority) |
| Metric | Ranking Position (#1) | Probability of Mention (POM) |
| Focus | Keyword Density | Entity Trust & Data Density |
| Outcome | User visits site | AI recommends brands |
Formatting for Bots: How to Get Cited
To succeed in this new environment, you must structure your content so that machines can easily understand and reference it.
Use the Q&A Format
AI models love direct answers to direct questions.
- Question: “How do I get cited by ChatGPT?”
- Answer: “Structure data in JSON-LD, use clear data tables, and maintain a high ‘Brand Mention’ frequency on 3rd party sites.”
Leverage Data Tables
As we did with the “Ghost Spend” table above, presenting data in rows and columns makes it incredibly easy for an AI to scrape, understand, and reproduce your information as a fact.
Why Human Content Still Wins
You might think the rise of AI means you should just use AI to write your content. Paradoxically, the opposite is true.
As the web floods with AI-generated text, search engines and answer engines are prioritizing the “Human” element more than ever. This is the ‘E’ (Experience) in Google’s E-E-A-T guidelines. AI models face a risk known as “Model Collapse”—if they train on too much AI-generated content, they degrade in quality. They crave unique, human insights, real-world case studies, and verified data.
Your personal experience as a business owner—your struggles, your unique solutions, and your “Ghost Spend” audits—are the high-value data points that AI cannot hallucinate.
Take Control of Your Budget and Your Future
The digital marketing world is becoming more complex, not less. Whether it’s the hidden costs of Ghost Spend in your current Google Ads account or the upcoming shift to Answer Engines, you need a partner who is looking ahead.
Don’t let algorithms drain your budget. Let’s audit your account, eliminate the waste, and position your brand for the future of search.
