Internal competition, or duplicate content, is not just an SEO problem. Over the last 2 years I have probably inherited as many PPC campaigns as I have actually created from scratch. This has its pros and cons, but one of the biggest repeated mistakes I come across is accounts having duplicate keywords across campaigns targeting the same geography.
While organizing a website there should be a focus for each page - theme, keywords, etc. When optimizing a website for search engine traffic it is a big no-no to target the same keywords to multiple pages - this confuses the search engines and essentially splits ranking potential up between however many pages are claiming that keyword as their main focus. Consolidating this potential onto one page can often be enough to show huge boosts in search engine rankings.
Now, on the other hand, when you are duplicating keywords across many ad groups or campaigns in a PPC campaign you are hurting yourself, but not in the same fashion.
1. You are basically bidding against yourself. In an auction setting having two bids on the same word drives up the cost, and in this case - you are likely going to drive up your own cost.
2. Reporting becomes a nightmare, especially in a larger campaign. How well did a keyword perform? It's tough to consolidate multiple line items when you're dealing with 1000's of keywords. This makes it nearly impossible to make intelligent decisions based on the numbers.
3. Click through rate is sure to suffer. If your duplicated keyword gets clicks in different areas CTR is not consolidated - and since CTR is such a big part of quality score it can effect your overall cost this is not to be taken lightly.
Since I can remember, it's been considered a PPC best practice to not include duplicate keywords in the same targeted region. But unfortunately I'm still seeing this again and again by companies that even had in-house PPC managers working their online marketing. Duplicate content will only hurt your SEM efforts - do it once the right way and there is no need to duplicate it.