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Staying ahead of the competition is a highly effective way to grow your business. It involves knowing the ins and outs of your competitors to identify ways you can outperform them to engage and influence customers.
A digital competitive analysis is a key part of your digital marketing strategy. It helps you understand the digital strategies of your competitors so you can leverage your strengths and minimize your weaknesses to build and grow. Plus, you don’t need expensive third parties to help you do it, everything can be done in-house if you know how. And with the ever-developing world of tools for AI in digital marketing, you can make the process even more efficient than before.
So let’s look at how you can analyze a competitor so that you can use the USPs of your business to gain that all-important edge. In this blog, we will cover
What is a Competitive Analysis in Digital Marketing?
Competitive analysis in digital marketing is a process that researches competitors to identify strengths and weaknesses. It examines the strategies companies use for marketing, pricing, product development, and distribution to gain insights.
It will help you to keep on top of trends in your sector and identify digital strategies that will drive brand awareness, customer engagement and, most importantly, revenue.
Why you should do a Competitive Analysis in Digital Marketing?
What is the purpose of competitive analysis? Well, the scope of your competitive analysis can vary depending on what you want to discover. What you analyze can be as broad or as focused as you like.
For example, you may want to focus on optimizing your website. For this, you would look at competitors’ websites to look at their content, UX, and lead generation strategies. What you learn can then help you to apply new CRO strategies.
There are many benefits to conducting an analysis which include:
- Identify barriers and opportunities in a market
- Identify your value proposition and how it differs from competitors
- Highlight where competitors are not delivering or have weaknesses
- Target the most effective digital strategies in your marketplace
- Identify new customers and territories
- Uncover market trends
- See the potential for a new product or service
- Establish a benchmark to measure your performance against
What does a Competitive Analysis include?
A competitive analysis in digital marketing means that you analyze the different platforms of each of your competitors and see how they contribute to growth. Ultimately it’s about benchmarking against your competitors.
Determine competitor types
Not all competitors should be treated the same. Split them into categories based on their level of competitiveness.
- Primary – These are your direct competitors that sell a similar product or service to your audience e.g. Asos and Boohoo.
- Secondary – These companies offer a similar version of your product or service (low or high-end) to a different audience e.g. Target and Gucci.
- Tertiary – These brands are related to you but don’t compete with your product/service or audience e.g. Red Bull and Patagonia.
Segmenting your competitors like this will help you see how they relate to your business.
Profile your competitors’ target customers
Understanding the audience of your competitors will tell you a lot about a business. It will help you to understand who they target and the digital channels they use effectively to do that.
The best way to find out about their customers is to see who the brand is appealing to. You could find this out by looking at
- Their mission statement or ‘About Us’ section
- Social media messaging and interaction
- Blogs and free downloadable assets
- Webinars or podcasts
- Customer reviews or user-generated content
By reviewing the goals, content, and interactions of your competitors, you’ll learn more about their audience. This will help you develop tactics that differentiate you from the pack.
Apply the 4 Ps of marketing
The full marketing mix is crucial to any digital marketing strategy. It will help you to analyze your competitor’s marketing tactics to gain insights into your activities.
- Product – What are they selling? What do customers like about their product or service? What makes it a successful product or service? What features or product(s) does their product have over mine?
- Price – What price model do they use? Is it a one-off payment or subscription-based? What makes the price point attractive?
- Promotion – How do they promote their brand and offerings? What digital channels are they most active in promoting? What tactics do they use to promote?
- Place – Where do they sell? Are they active online or do they have brick-and-mortar stores or branches?
You can gain a lot of information from this process, so you should focus on the areas you want to know about. Include any quantitative data to refer back to along with qualitative.
Find best practices
Your top competitors are successful for a reason, they have tested and tweaked their strategies across digital platforms over time. This means they have developed best practices you can learn from.
For example, maybe your competitors see success by marketing on TikTok. Through competitive analytics, you can see the presence of your competitors and if a majority are using it, maybe it’s something you should consider.
Or you can see that a number of your competitors have climbed up the rankings on SERPs like Google or Bing. This probably means they are using SEO to optimize for searches using popular keywords and phrases.
Use a framework for analysis
What method you use to analyze your competitors depends on what you want to know.
For example, you can use SWOT analysis once you gather all the data if you want to discover new opportunities or threats in the marketplace. This will also help you identify your strengths and weaknesses.
Another framework to consider is Porter’s Five Forces. This looks at the market forces in an industry such as the threat of new entrants and substitutes, bargaining power of substitutes, competitive rivalry, and bargaining power of suppliers and new buyers.
Graph of Porter’s Competitive Forces
You can also use a growth share matrix developed by Boston Consulting Group that looks at your products or services against the competitive landscape. This is split into four areas (Star, Question mark, Cash cow and Pet) based on growth and market share to drive analysis. This video below uses Coca-Cola as an example to demonstrate the framework.
Organize your data for analysis
Group any data you collect on your competitors in an organized way. This will help you go back and refer to any data points to gain insights for future digital activities.
This is particularly important when gathering data from many competitors as it will help you to check areas of similarity to identify opportunities. Criteria to analyze include price range, social media activities, lead generation tactics, content marketing initiatives, first-time visitor offers, etc.
What are the Types of Competitive Analysis?
There are several types of competitive analysis depending on your company and needs. Each one will focus on a niche area that you are looking to analyze and improve to drive targets and KPIs such as leads, revenue and brand awareness.
These are the main types that focus on key digital marketing channels, but you can also analyze email (check out our ultimate guide to email marketing for guidance) or the UI and UX of a website.
Social media competitor analysis
Social media is a powerful tool for any business in driving customer engagement and leads (especially since social commerce became more widespread). It’s important to know where your audience is so you can target them effectively across social platforms.
Conducting a social media competitor analysis will help you see what social networks your competitors are on and the number of followers and demographics they target.
You should also look at post frequency, when they post, type of content posted e.g. videos, blog links, etc. Also, look at their content themes or buckets so you can see the topics they discuss.
Interactions with customers through comments can also be revealing and engagement rates can help you see what posts resonate more with their audience.
PPC competitor analysis
A PPC competitor analysis involves finding out the keywords or phrases your competitors are bidding on. The ultimate goal is to create PPC campaigns that drive results and are better than your competition!
You can do this by studying the types of ads they are using and in which networks or platforms. Are they paying for expensive keywords or conversion-focused phrases? Or is their PPC focused on brand awareness?
You can also review their landing pages to analyze messaging and CTAs. Are they creating custom landing pages for every campaign or relying on a few money pages? Knowing this will give you an idea of your competitor’s aims and budget.
SEO competitor analysis
This type of analysis helps you determine what SEO keywords your competitors rank for. This will help you understand their area of focus and figure out how to compete in the battle for keywords.
A few techniques you can use are to:
- Compare website performance e.g. page speeds
- Find keyword gaps
- Compare backlinks and where they get them
- Look at strategies on how they rank for more keywords – e.g. do they have a blog or resources section?
- Examine top pages and traffic
Competitor Analysis Tools
There are many competitor analysis tools out there to help you. This will make your data collection simpler, more accurate, and more efficient. A few examples of the best tools specific to key areas are:
SEO Analysis
- Ahrefs – check top performing keywords of any website and get estimated keyword traffic
- SE Ranking – shows paid and organic search performance and keywords
PPC analysis
- SEMRush – can perform a site audit, show competitor’s keywords and a backlink analysis
- Spyfu – researches your competitors’ most profitable keywords in PPC campaigns
- Google Ads Auctions Insight – allows you to compare your performance with other companies that are bidding in the same auctions
Keyword analysis
- Similarweb – provides information on web and channel traffic, uncovers keyword trends, and reveals engagement metrics
Social media analysis
- Sprout Social – you can measure follower growth, engagement, hashtag trends, conversions, and paid content performance
- Facebook ad library – allows you to search for ads that are run across Facebook, Instagram, and other Meta products
AI tools for competitor research
- Brandwatch – a tool that monitors the online presence of rival brands
- Sprout Social – an AI tool that helps you understand how competing brands are performing on social media
Other resources you can consider include Google Trends, TikTok Creative Center, and Meta Ads Library
ChatGPT – use everyone’s favorite AI co-pilot to crunch the data and insights you’ve gained from the other tools
Become a Successful Digital Marketing Strategist
Put digital strategies at the heart of your business to drive awareness, leads and revenue. DMI’s Digital Strategy course will help you understand your customer and brand story, hone your financial and team management skills, optimize your digital channels and become a digital leader.
