Competitor analysis in contextual advertising

Researching the competitive environment is an integral part of any marketing campaign, and contextual advertising is no exception. The emergence of a strong competitor will entail great difficulties. In particular, a decrease in audience reach and an increase in the price per click.

In recent years, competition in contextual advertising has intensified. That’s why it’s important to understand that competitor analysis in contextual advertising is a necessity that cannot be neglected.

How is competitor contextual advertising analysis useful?

Analyzing a competitor’s contextual advertising allows you to identify important elements of advertising campaigns:

• What and how competitors advertise, how often the ads are adjusted, what strategies they use;
• What calls to action are they based on, how do they attract the user;
• Whether they use ad extensions and add-ons and which ones;
• What ideas can be adapted for their ad campaign;
• How much other companies spend approximately on advertising.

What to consider when analyzing a competitor’s advertising campaign?

An important modern tool for increasing efficiency in any business is now benchmarking. When analyzing the advertising campaign of competitors in search of the best techniques and methods of contextual advertising should take into account the following points:

1. Key phrases. This is what contextual advertising and displays are based on. Using queries from your competitors’ successful ad campaigns instead of searching for them manually is much more convenient and often more effective;
2. Headlines and ad texts. Business and product positioning in contextual advertising is largely due to headlines and text. Studying these elements in competitors’ advertising campaigns, their unique selling proposition, serves to find ideas that can be improved to create your own style. Ads from other advertisers can be found manually or through services;
   
3. Completeness of ads. Pay attention to whether your competitors use extensions and add-ons, whether contact details are filled in, whether dynamic ad campaigns and additional links are used. Everything that others have neglected can become your advantage;
   
4. Ad History. As you monitor your competitors, it’s a good idea to look at their ad history. How often they experiment and whether they revert to old versions will allow you to understand what works and what doesn’t without compromising your own ad campaign;
5. Landing pages. Landing pages are the first thing a user sees when clicking on a link from a search engine. Analyze your competitors’ landing pages for completeness, relevance, presentation and design. If they link users to generic pages, do better – create different landing pages for each relevant query.

How do I know my competitors’ budget?

Due to the fact that pricing in contextual advertising is influenced by many different factors, it is not possible to know the exact budget of competitors in Google Ads. However, this does not exclude the possibility of determining the approximate costs of competing companies. Knowing how much they pay per click, you can compare this figure with your own and understand what strategy of displays is more appropriate to use – to emphasize high-frequency queries that cost a lot, or cheap low-frequency.

You can calculate the competitor’s budget when auditing for certain key phrases as follows:

• Create an Excel sheet and add all the necessary competitor keywords;
• Sort the data by number of impressions, cost and position;
• Identify the number of clicks for each keyword;
• To determine the approximate CTR (click-through rate) of the competitor, compare it with the CTR of your RK for the same queries. In case you were shown on higher positions for these words – reduce a little bit the indicators for the competing company and vice versa;
• Based on the found clickability coefficient, use a simple formula in Excel to calculate the number of clicks:

Clicks = Shows * CTR

• Next, we find the budget for this keyword by multiplying the number of clicks received by the price per click;
• Sum the data and get the total budget that the other site spends on the analyzed keywords.

Analyzing competitors in Google Ads

After launching an advertising campaign, Google AdWords service gives advertisers the opportunity to get information about who is in competition with you for a particular query, whether you are ahead of your competitors or behind. To do this, use a special report “Auction Statistics”.

With this report for analyzing Google Adwords competitors you will get such advantages:

• A list of sites that are also shown for a specific query or group of queries;
• Percentage of impressions received – determines the share of impressions that were received for a specific period of time for your campaign and competitors;
• The average position of your ads in the issue compared to other sites;
• Crossover Rate – how often your listings were ranked in the same issue with your competitors;
• Winning percentage – shows how often your ad was ranked higher than others;
• Next Position Ratio – shows how often a competitor’s ad is ranked higher than yours in the same search;
• Coefficient of ads above the search results – shows how often your ad or another advertiser’s ad was shown above the search results, respectively, the algorithm considered it more relevant to the query.

Audit of competitors in our projects

Analysis of competitors in advertising will allow you to “keep your finger on the pulse” and monitor the behavior of other advertisers. Understand what tools they use, for what purposes, and evaluate what results they get.

In our reports and recommendations, we describe the strengths of competitors’ advertising strategies and websites, and offer our clients ideas that can be implemented to maximize results right now.

Examples of competitors’ ad texts and UTPs (unique selling propositions) they use: