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Competitive Research, Intelligence, and Search Marketing, Part 2

  |  May 5, 2006   |  Comments

What are your competitors up to with their search marketing campaigns? Plenty of tools can help you find out. Second of a two-part series.

In the first of this two-part series on competitive research and intelligence, I mentioned the catalyst for this coverage was Search Engine Strategies (SES), Toronto, where an entire session was devoted to the subject.

With data from several of the paid data collection and research services, you can gather and analyze critical data about your competitors’ activities. My team and I use comScore data to access this kind of data to more effectively manage client campaigns, supplementing it with real-time client data and even Alexa data. Other services or data sources may offer alternative ways for you to get a handle on where you fall in the competitive landscape and provide with key competitor data, including some of the following:

  • Competitive keyword overlap. Which keywords do you have in common with your competitors? Reports showing keyword overlap are particularly useful if your business is very similar to your competitor’s. Conversely, if you include certain advertisers in your competitive set just because of some keyword overlap, the report becomes less useful. A merchant including eBay, Overstock, and Target in a keyword overlap report would find little overlap unless its product offering was equally broad.

  • Share of search. By applying percentage coverage against keywords you and your competitors are buying, you can develop a share of search ratio. What share of search impressions are you getting? Of course, position factors into this as well, but if you know your average positions tend to be higher or lower, you can determine whether you’re getting more or less mileage from your impressions.

  • Keyword discovery search term opportunities. Which keywords are your competitors buying that you aren’t? Like the keyword overlap report (which defines your competition based on overlap), the keyword discovery report is most valuable when competitors’ business models closely resemble your own.

  • Ad CTR (define). What’s the success rate of your competitors’ ads? If their CTR is high and they run similar keywords at similar positions, chances are their ads are very well crafted and relevant. A competitive ad creative review may be a good idea to rule out a high CTR being caused simply by branded keywords or aggressive bidding for position.

  • Relative overall traffic. How much of your competitors’ traffic arrives through paid search listings, rather organic search and other sources? A good campaign gets traffic from both organic and paid listings.

  • Position for power keywords. What positions do your competitors run for keywords with high impression volume: the power keywords? If your competitors run high positions on power keywords, perhaps they attribute a higher value to branding/engagement, early buying cycle consumer research, lagged conversions, or offline purchase behavior. A reevaluation of your success metrics may be appropriate if you’re bottom-feeding on important power keywords.

  • Spending (or share of search spending). If you know the keywords your competitors are bidding on and their average positions, you can estimate spending using the average CPCs (define) required to maintain those positions. However, as most keyword auctions run as hybrids that factor in relevance and provide a brand discount to recognizable sites, spending estimates may be off.

During the SES session last week, Performics’ Cam Balzer discussed how to use some competitive data to estimate your competitor’s point of maximum pain. If you ramp up spending on keywords, your competitors will likely respond by bidding higher. Balzer indicated there may be times when such a test could be useful in determining the point at which your competitors are unwilling to bid higher. My team calls this experiment an elasticity test.

Be warned: this kind of experiment has a cost, perhaps a significant one, if your competitor is either highly efficient and has high reserve prices on keywords, or is irrational and, therefore, doesn’t care about price. Another data element you learn during an elasticity test is whether your competitor has set daily budgeting. If so, your average position will rise as the engines cease showing the competitor’s ads at high positions.

Dave Williams from 360i reminded the audience that shopping feeds and monitoring that competitive landscape can be critical for many e-commerce marketers due to the large order volumes coming from shopping search. Competitor price monitoring tools would be very handy in that environment. I’m sure they exist and will become more prevalent now that the shopping engines have RSS (define) feeds that can be easily monitored.

Not mentioned on the panel was how to determine (with some level of confidence) which tracking, bid management, and campaign management technology your competitor uses. If you’re obsessed about which vendors or technologies they like, you can often tell by looking at the properties of a paid search link to see the ad-server/click-counter redirect. Similarly a "view source" of the HTML on their Web sites often reveals evidence of most third-party data collection vendors in the JavaScript or pixel codes. This is particularly true with confirmation and thank-you pages. Be aware some marketers are moving these JavaScript statements into external .js files, making it more difficult to find them.

A final word of advice: although you can learn a lot by looking at what competitors are doing, stay focused on your own marketing and business objectives. Don’t spend so much time looking at competitors and their campaigns that your own business suffers. Competitive intelligence is useful, and you may learn something by watching your competitors, especially if they’re smarter than you are. But being proactive based on real-time data derived from your campaigns may be the best way to outmaneuver them.

Want more search information? ClickZ SEM Archives contain all our search columns, organized by topic.


Kevin Lee

Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.

Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.

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