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I used to all the time when I spent a lot of money in PPC traffic. I actually had a sponsor once ask me to run their own campaigns because I was getting much better performance (they asked my ROI, which is how they knew).
A couple of times I would see a program them start their own campaigns bidding on the same phrases and even using the same ad group names in their URL strings (Analytics tagging). I had someone develop a program for me which would make the traffic appear to refer from my site.
It may seem shady, but to me that was my livelihood and I wanted to protect my investment and not let them in on the "secret sauce."
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