Steps for Conducting a Digital Marketing Competitive Analysis

Maintaining a competitive edge is essential for the growth and success of your business. This involves a thorough understanding of your competitors’ strategies and operations, allowing you to develop superior tactics to attract and retain customers.

Conducting a digital competitive analysis is a crucial element of your online marketing approach. It enables you to grasp the digital tactics of your rivals, capitalizing on your strengths and addressing your weaknesses to foster development. Remarkably, this analysis can be performed internally without the need for costly external consultants, and with the advancement of AI tools in digital marketing, this process has become even more streamlined.

Exploring how to carry out a competitive analysis will empower you to leverage your business’s unique selling points (USPs) and secure a significant competitive advantage. This article will cover:

• Understanding Competitive Analysis in Digital Marketing
• The Importance of Competitive Analysis
• Components of a Comprehensive Competitive Analysis
• Various Forms of Competitive Analysis
• Tools for Competitor Analysis

Understanding Competitive Analysis in Digital Marketing

A competitive analysis within the realm of digital marketing entails the exploration of your competitors to discover their strengths and weaknesses. This investigation looks into their marketing strategies, pricing models, product innovation, and distribution methods to glean valuable insights.

Such analysis is pivotal in staying abreast of industry trends and pinpointing digital strategies that enhance brand visibility, customer engagement, and critically, business revenue.

The Importance of Competitive Analysis in Digital Marketing

The aim of conducting a competitive analysis varies based on the insights you wish to obtain. You can choose to examine a wide array of aspects or narrowly focus on specific areas of interest.

For instance, optimizing your website might be your goal. To achieve this, you would evaluate your competitors’ websites, examining their content, user experience (UX), and lead generation techniques. The insights gained can guide the implementation of novel conversion rate optimization (CRO) strategies.

Among the myriad benefits of performing such an analysis are:

• Discovering market barriers and opportunities
• Defining your unique value proposition vis-à-vis your competitors
• Identifying competitors’ shortcomings and gaps in service delivery
• Focusing on the most impactful digital strategies in your industry
• Exploring new customer bases and markets
• Unearthing market trends
• Evaluating the potential for launching new products or services
• Setting a performance benchmark for comparison

Components of a Comprehensive Competitive Analysis

In digital marketing, a competitive analysis involves evaluating various platforms used by your competitors to foster growth. Essentially, it’s about benchmarking your performance against theirs.

Categorizing Competitors

Not every competitor warrants the same level of scrutiny. Classify them into categories according to their competitive threat level.

• Primary – Direct competitors offering similar products or services to your clientele e.g. Asos vs Boohoo.
• Secondary – Firms that present a version of your product or service (whether budget or luxury) to a differing audience e.g. Target vs Gucci.
• Tertiary – Businesses that, while related, do not compete directly with your product/service or target market e.g. Red Bull vs Patagonia.

This segmentation aids in understanding how each competitor relates to your business.

Profiling Competitors’ Customer Bases

Gaining insights into your competitors’ target audiences can provide valuable clues about a business. Discovering who they cater to and through which digital channels they reach their audience is crucial.

Ways to learn about their customer demographic include:

• Examining their mission statement or ‘About Us’ section
• Analyzing social media interactions
• Reviewing blogs, downloadable resources
• Listening to webinars or podcasts
• Exploring customer reviews and user-generated content

By assessing your competitors’ goals, content, and audience interaction, you can identify strategies to distinguish your brand.

Employing the 4 Ps of Marketing

Applying a full marketing mix analysis is integral to any digital marketing plan. It allows for a deep dive into your competitors’ marketing practices, providing insights that can refine your own strategies.

1. Product – Analyze their offerings. What attributes make their product or service successful? How do their features compare to yours?
2. Price – Investigate their pricing strategy. Is it based on a one-time purchase or subscriptions? What makes their pricing appealing?
3. Promotion – Observe how they market their brand. Which digital channels do they prioritize? What promotional tactics do they employ?
4. Place – Determine their sales channels. Do they focus on online sales, or do they also have physical outlets?

Target the areas most relevant to your goals, incorporating both quantitative and qualitative data in your analysis.

Identifying Best Practices

Your leading competitors have found success for reasons worth studying. They’ve honed their strategies across digital channels, identifying effective best practices.

For instance, a marked success on TikTok by your competitors could suggest this platform’s viability for your business. Similarly, if they rank highly on search engines, it’s likely due to optimized SEO practices leveraging popular keywords.

Choosing an Analytical Framework

The choice of analytical framework depends on the specific insights you’re after. Whether it’s uncovering new market opportunities, assessing threats, or understanding your competitive stance using tools like SWOT analysis, or exploring market dynamics through models like Porter’s Five Forces, selecting the right framework is key.

Alternatively, consider the growth-share matrix by the Boston Consulting Group, which plots your products against the competitive landscape, helping drive further analysis with models like Stars, Question Marks, Cash Cows, and Pets.

Systematizing Data for Analysis

It’s crucial to systematically organize the data collected from your competitive analysis. This structured approach allows for easier reference and insight generation for future digital endeavors.

Especially when dealing with multiple competitors, this organization aids in identifying patterns and opportunities for strategic advantage. Consider categories such as pricing, social media engagement, lead generation methods, content marketing strategies, and introductory offers to new visitors.

Exploring the Types of Competitive Analysis

Different approaches to competitive analysis cater to specific company needs and objectives, focusing on critical areas for analysis and improvement to meet targets and KPIs like leads, revenue, and brand awareness.

Key types emphasize various digital marketing channels, though analysis can extend to email marketing (for which we provide a comprehensive guide) or the UI/UX of websites.

Competitor Analysis on Social Media

Social media serves as a potent channel for engaging customers and generating leads, more so with the advent of social commerce. Understanding where your target audience spends their time enables effective targeting across social platforms.

A social media competitor analysis reveals which networks your rivals use, their follower counts and demographics, and their content strategies, including posting frequency, content type, and thematic focuses.

Examining how competitors interact with their audience and the engagement rates fetched by their posts can offer insights into what resonates with their audience.

Analyzing Competitors’ PPC Strategies

A PPC competitor analysis uncovers the keywords and phrases your competitors target in their ad campaigns, aiming to craft more effective PPC campaigns than those of your adversaries.

Investigating their ad types, campaign platforms, targeted keywords (for cost or conversion focus), and landing page designs (including messaging and CTAs) provides insights into their strategic goals and budget allocations.

Our case study on Airbnb’s digital strategy demonstrates how they blend paid search priorities with brand positioning.

SEO Competitor Analysis

This analysis type focuses on the SEO keywords for which your competitors rank, offering insights into their focus areas and strategies to compete for keyword dominance.

Techniques include comparing website performance metrics (like page speeds), identifying keyword opportunities, assessing backlink profiles, evaluating content strategies for ranking, and analyzing top-performing pages and their traffic sources.

Tools for Competitor Analysis

A variety of tools are available to simplify, enhance accuracy, and improve the efficiency of your competitor analysis. Some of the best tools tailored to specific areas include:

SEO Analysis

• Ahrefs – analyze top-performing keywords and traffic estimates
• SE Ranking – view both paid and organic search performances

PPC Analysis

• SEMRush – perform site audits, view competitor keywords, and backlink analysis
• Spyfu – research the most profitable keywords in competitors’ PPC campaigns
• Google Ads Auctions Insight – compare your ad performance with competitors in the same auctions

Keyword Analysis

• Similarweb – access web and channel traffic information, uncover keyword trends, and engagement metrics

Social Media Analysis

• Sprout Social – measure follower growth, engagement, hashtag trends, conversion rates, and paid content performance
• Facebook Ad Library – search ads across Facebook, Instagram, and other Meta platforms

AI Tools for Competitor Research

• Brandwatch – monitor online presence of rival brands
• Sprout Social – use AI to gauge competing brands’ performance on social media
• Additional resources include Google Trends, TikTok Creative Center, and Meta Ads Library
• ChatGPT – leverage this popular AI tool to collate and analyze data insights gained from other tools

Evolve into a Proficient Digital Marketing Strategist

Centering your strategies around digital initiatives can elevate brand awareness, lead generation, and revenue growth. DMI’s Digital Strategy course equips you with the knowledge to understand your customers and brand narrative, refine your financial and team management capacities, optimize your digital channels, and emerge as a leader in the digital domain.

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