Why Competitor Analysis Is By Far The Most Important PPC Tactic for 2021

The biggest mistake somebody can do when managing a paid search account is to forget about the competition.

Tragically, this is commonly done across the board. Some paid search managers do not even consider the impact of increased competition on performance.

With established online businesses accelerating their digital strategy and previously offline focused companies dedicating proper resources to their online channels this has become essential to managing any PPC account in 2021.

Importance of Competitors to Your Marketing Targets and Bottom Line

Competitors have three major effects:

  1. An increase in cost per click
  2. A decrease in click volume
  3. A fall in impressions share/absolute top position

So, if it is that important, then how do you monitor your competition?

Well, Google has made it very easy to do this (Microsoft Ads is similar). It has made the Auction Insights feature more readily and easily available.

It appears just above your Campaigns, Ad Group or Keyword table on the user interface when you select one or more items. It can be easily accessed by simply clicking on the link. You will see your competitors’ domain impression share within the auction.

Ask yourself, where are you in relation to your competitors?

Importantly, you will also see any new domains who have entered the auction.

Google-Ads-Auction-Insights

Tracking Competitor Trends and Domain Depth on Auctions

This is very important to keep an eye on the trends and to track back when additional competitors have entered the auction. Simply put, the reality is Google doesn’t set the price of your clicks, you don’t set the price of your clicks, it’s the competition that sets the price.

So what should you do? Well, we suggest you look at your most important keywords. Break it down on a regular monthly basis. Note the increase (or decrease) in domains and impression share. This will give you an understanding of why performance has improved or why in certain cases your performance may have fallen. If you are in a high volume auction you can break this down to Day of Week.

Your PPC Targets Need To Reflect Competition Today and Not Last Year

Ultimately, you must make real-time adjustments to PPC KPIs based on the competitive landscape. And yes, I am saying that in 2021 last year’s data is almost irrelevant. We manage multiple PPC accounts here at the Unit and we see one common trend. Increased competition.

So, if you’ve planned for 2021 to grow new customer acquisitions by 20% and reduce CPA by 10%. It’s ridiculous.  You don’t have enough control to do that on the account, one new competitor can completely change and alter the auction landscape.

Yes, that’s all it takes one new competitor. Their strategy can have a substantial impact on what you can achieve.

Here is where what we at the Unit call “Deep Competitor Research” kicks in.

 

PPC Deep Competitor Research – Away From The UI

Once you have your competitors’ domains it’s time to drill down even further. Do SWOT analysis on those businesses, and work out their business model. Yes, that’s right, true PPC account management is just as much about analysing outside of the platform as in it. That’s what separates the great PPC managers from the rest.

You see, it goes beyond simple auctions. You must dive down into the fundamentals of who you’re dealing with because ultimately, these are the people you’re playing against. Here’s a good approach to start deep competitor research.

1) What’s Their Business Objectives

This involves doing research on the company and finding out how they make your money. For instance, are they a startup, and the pushing user growth to drive the next round of funding, are the established company that has already optimized online digital marketing or are they a new player who has recently started taking digital marketing seriously and have now invested in the staffing and the technical requirements to do that.

Each of these will have a different approach and internal KPIs. by identifying their business objectives it will help you understand their PPC impression share and bids.

2) CRM practices

This is where we suggest signing up or buying a product from a competitor. This is something that you need to do for two reasons. One to try and figure out their retargeting strategy and understand how they get signups to purchase their product or service. Also, you must note their creative assets, copy, CTAs and special offers.

Two, assess the marketing technology they use. You can do that by using tools like Ghostery or by just looking at the scripts that they load on the page. Another tip is when they send emails to you. See if they’re using MailChimp, or SendGrid, or if they have a deeper integration like Intellimatch etc.

CRM and Paid Search

Why is CRM important for paid search?

Well, ultimately in a competitive auction and assuming everyone is using lifetime value as a primary driver. The best CRM will result in the best PPC performance when all is said and done.

The company with the best lifetime value can bid more and push out competitors.

So once you’ve reached a plateau of what you can afford to pay and within your return on investment criteria. You can increase your headroom by improving CRM.

Find out how your competitors’ that are bidding more than you have the headroom to do so. Also, it is likely that you also need to optimize your own customer journey, your own offerings, and in some cases, your own product in order to compete in these auctions. (Outside of increasing quality score)

Implement Your Findings from Competitor Research

So once you’ve done all this competitive research, what should you do.

Well, you may have a budget with targets that you have to achieve. However, if this is not adjusted for the current competitive landscape, it will actually hinder your progress. If there is a disconnect between C suite targets and day to day PPC objectives you must make an adjustment to the C Suite plan. At that point, it does not reflect reality.

The whole reason for this is twofold. Firstly an improvement in artificial intelligence (AI) targeting and bidding customers across keywords, but also across in market audiences affinity audiences and your own retargeting cookie pool slash emails.

And number two, your competitors. It just takes one new competitor in an auction to change how you manage the account completely. This is not just an isolated case when you change your bids once. Its fluid and changes by the second. There are millions of different factors, used to determine who sees an ad and when.

Get your board onside if the competitive landscape has changed since the budgets were put together by simply comparing PPC auctions to property. It works most of the time. Simply say “This plan is the same as projecting prime San Francisco/London property prices at $100,000,”  Then list the competitors in the same auction. They will get it.

Your Brand Across Other Channels and PPC

As well as CRM your conversion rates are massive factors to your PPC success.

The most crucial factor in conversion is brand trust. And this is known by major brands across the board. Think about it. If you’re buying an Apple computer, the apple.com website does not need to have the best user flow, there can be a few minor speed bumps along the way, you will still buy.

However, for lesser-known brands, if there are any minor speed bumps on the conversion path a sale will be lost.

As a result, you must also analyse your competitors brand sentiment and awareness. Note, that in 2021 PPC cannot live in isolation. it’s not 2007 anymore. The advertising mix has never been more important.

 

Not only is “brand direct” and “brand SEO” essential parts of your PPC retargeting cookie pools but it is a major differentiating factor when in a competitive auction.

Assessing the Auction

We have talked about the three stages of PPC before.

1) Transactional – Make money on each transaction
2) CLV – Make money over the lifetime of your customer
3) Company Value – make money from increasing the value of your company

Stage of PPC Auction

In 2021, the transactional stage is finished across most sectors, it was great while it lasted. There are still opportunities during the CLV phase but more and more companies are now playing in phase 3. If you are an established business and are faced with an onslaught of start-up competitors in phase three then you are in trouble for the short term anyway.

All in all, you must have a comprehensive marketing plan that factors in any PPC scenario and can adjust with your competitors’ approach.

Conclusion

Paid Search particularly on Google is now ultra-competitive. To get the best results you must put yourself in your competitors’ shoes and do analysis outside of your day to day optimisation process. The winners will be the PPC managers who see the big picture and can predict the cards held by their competitors.

If you are a C-Suite executive and would like to know more about how competitors are impacting your sales then drop us a line.