Competitive Intelligence and Counter-Intelligence
Spying is such a loaded word, isn’t it?
Spying evokes images of stakeouts on dark streets, dumpster diving to dig up old phone records, elaborate electronic eavesdropping and bugged lampshades.
At Advanced Dealer Systems, we prefer to use the softer, more professional reference to competitive intelligence gathering and counter-intelligence. Whatever you prefer to call it, constantly keeping track of our client’s competitors and protecting our client’s from being spied on is imperative to each of our client’s continued success.
The Value of Competitive Intelligence
I think the two first things that usually come to mind for competitive analysis are keywords and bids. We want to know what keywords our client’s competitors are using and how much they are paying for them. This certainly would be important data to have, but the real value of competitive intelligence comes from knowing not only what your competitors are doing right now, but what they are likely going to do and when they are likely to do it.
It is much more interesting to go beyond the obvious tactical questions and try to answer larger, more strategically important questions, such as :
- How big is the immediate geo-targeted market opportunity?
- How much are your competitors investing in paid search?
- Are we investing enough in paid search?
I like to delineate our three primary uses for competitive intelligence: benchmarking and forecasting, tracking day-to-day competitor tactics, and forensics.
Tracking day-to-day tactics
By collecting and analyzing information about your competitors, we can start to develop models to understand what your competitors are investing in individually and as a group.
In some cases, you can extrapolate information from their Popularity Index. The Popularity Index is a rank assigned to each domain, based on the number of unique sessions a domain receives.
As you begin to use the competitive intelligence data to your advantage, you can monitor the PI rank of your competitors to see what impact your efforts have had on the levels of traffic your competitors receive. Once you establish your current place in the competitive pecking order, you can develop forecast models to plan for your own future ad spends.
In highly competitive and seasonally-active markets, it is important we know what your competitors are doing and when they do it. It is never a good idea to have your boss make you aware that a key competitor has been running a promotion for the past two weeks that you could have known about within hours or days. This is just the sort of information our reporting will keep you abreast of.
With the right tracking programs in place, Advanced Dealer Systems knows very quickly when competitors change ads, significantly change bids (drastic shifts in their or your average ad positions), offer special price promotions and develop new landing pages. The more quickly we can discover these changes, the more quickly we counter their moves.
In the wild-west of Automotive Dealership Internet Marketing, there are always cowboys who play fast and loose with the rules, and a constant influx of new competitors who may or may not actually know what the rules are.
A good competitive intelligence program allows us to identify and quickly address things like ad double-serving, franchise violations, ads that violate editorial policies, websites where your content has been completely copied, suspicious clicking patterns from a competitor’s IP address, and so on.
The sooner we identify bad behavior and report it to Google, Microsoft, and/or your legal team, the sooner you can dampen the impact of a competitor’s improper advertising.
Studying Your Competitors
There is plenty of information we will glean from search results pages through simple observation and by asking a few smart questions along these lines:
- How many ads are they running?
- How quickly do they react to ad copy changes we make?
- How often do they put new ads into rotation?
- How many different landing pages do they use?
- What sort of offers/calls to action do they use that our client does not?
- How often do they update landing pages?
- How good is their SEO, and page construction on their website/ landing pages?
- Are they tracking clicks? Ads? Keywords?
- What sort of analytics do they use?
These are just a few starter questions that we use to gauge your competitors’ level of sophistication and aggressiveness.
The more time you spend and the deeper we go with our competitive intelligence program development, the more questions develop. It doesn’t take long before we start making predictions about your competitors’ behavior and how they are likely to respond to your own campaign adjustments.
Manual vs. Automated Data Collection
While it is possible to collect plenty of data manually, we realize that tools can greatly improve not only the accuracy of our data collection, but also the volume and breadth.
For example, our repeat searches on Google from the same IP address will give us much different results than others will typically see in the SERPs.
Keyword research and competitive analysis tools can range anywhere from free to over $10K per month, and there are plenty of them out there. The table below lists a few tools we’ve used from time to time to collect data and some of their key features and approximate costs.
Competitive Analysis Tools :
All tools have their unique methodologies for gathering and reporting data, so results can be wildly different from tool to tool.
Though each tool claims to be better than all the others, we don’t trust any particular data point, but instead, use the data for approximations and to see how the data changes over time. We typically triangulate by using more than one tool for any specific task, especially bid and market share information, and we use our own campaigns as a control.
I’d say AdGooroo is our favorite intelligence tool because of the way it visually presents the data on competitors using rank order charts and data tables. It is also the only tool we know of that collects display ad intelligence too, a very powerful feature.
SPYFU has a few nice features that show when advertisers change ads and charts that show comparative overlap of keyword spaces. Keyword Competitor has some near real-time reporting, and while it is a relatively new tool, it is one worth evaluating.
As with all competitive intelligence activities, it is easy to lose sight of right and wrong, and even to recognize what is legal or illegal. There are many shades of gray in this marketplace.
For example, a strict reading of the Google AdWords Terms of Service could mean that simply clicking on a competitor’s ad is a prohibited activity, as excerpted below:
“4 Prohibited Uses; License Grant; Representations and Warranties. Customer shall not, and shall not authorize any party to:
(a) generate automated, fraudulent or otherwise invalid impressions, inquiries, conversions, clicks or other actions…”
Would a single click on a competitor’s ad be deemed invalid and illegal? Certainly if a competitor clicks on one of our client’s ads, I’d consider that invalid. Is it illegal based on AdWords TOS? I don’t suppose Google is interested in shutting down every advertiser who has ever clicked on competitor’s ad. But at the same time, they certainly would be within their rights to do so, and likely reserve it for abusive behavior such as repeated clicks by advertisers maliciously doing so to drive up advertising costs for a competitor.
The ethical dilemma is clear. If it is a generally accepted practice in our market to occasionally click on a competitors’ ads for the purpose of competitive tracking, knowing it is not legal, but knowing that Google won’t likely enforce this policy, is it ethical to do it?
That is a risk assessment and decision each of us needs to make, of course, but again an area where I believe the golden rule applies. Do unto others as you would have them do unto you.