One key element to success is to always be aware of what your competitors are doing.
Many professionals in the business world have tried this with corporate spying and have fallen within the realm of questionable or unethical methods to retrieve information in order to rise above the competition. However, in the wonderful world of PPC, we are now able to use legitimate methods to understand how our competitors are positioned and how their ads are being displayed.

Conducting good competitor analysis, where you identify your competition’s strengths and weaknesses, will make you a more effective player in the paid search world.  It’s important to know what tools can help you assess your competition’s activities and help you come up with your own game plan after obtaining the information you require.

Here are some tools that I recommend to gain further insight into the matter. Some, you may already know, and others you may want to start familiarizing yourself with.

The AdWords Ad Preview Tool

Although the AdWords Ad Preview Tool’s main function is to prevent AdWords advertisers from accruing unnecessary impressions when trying to see how and where their ads are positioned, it’s also the clearest way to see their competitor’s ad content and positioning, as well.

Use some of your main keywords in order to see how your competitors are positioned, so that you can craft a strategy around that in order to see what you can do best to gain better positioning.

Paid Search Tools to Spy on your Competition

SpyFu and KeywordSpy are two great tools to get a deeper insight into the competition’s use of keywords, ad copy, budget and bidding. These are complete tools that give us very useful information and allow us to build a bigger picture of what the competition’s strengths and weaknesses are.

SpyFu is actually a paid tool that we highly recommend due to its various features such as Kombat, which will allows you to submit your website vs. your competition’s, and show you what keywords you can be buying that your competition is currently using.

Notice Competitive Keywords That You Aren’t Using

It’s also very important to notice what keywords the competition is using that we should also consider using ourselves. We may be limiting our product offering in AdWords while the competition may be making a huge profit off of it.

Also, when analyzing their ads, look for the wording your competitor is using in their text.

Are they offering incredible promotions? What benefits are they highlighting that maybe your company should consider? Is there free shipping for a lower minimum purchase amount than yours?

Quantcast.com: Great for Audience Information

Quantcast is an excellent tool to see the big picture of your competitor’s audience. It will permit you to see what their demographics are composed of. Furthermore, with Quantcast you can also identify websites, which your competitors’ users visit from their site.

If there is any chance of promoting your own ads in the sites that your competitions audience will find themselves in, then it’s an obvious choice for a display marketing campaign.

Compete.com: Offers Traffic Estimates for Competitor Sites

Compete.com, with its very appropriate-name, is excellent for researching traffic estimates on your competition’s sites. It will display how many unique visitors they have on a graph for you so you can appreciate fluctuations, as well as their rank by unique visitors compared to their own competitors.

Great, I have all this info! Now what?

After retrieving all this valuable information, it’s time to put it to good use. Having gathered enough data, you will be able to see if your ads need to be tweaked with promotions that will engage well with your competitors, or if perhaps your budget & bidding will need a little boost in order to best compete.

Also, once we create new keyword lists with the information retrieved from sources such as SpyFu’s Kombat feature, we can then begin to advertise for great keywords that our competitors are making a profit from already, as we speak.

In the end, you will be surprised to see how much you will find out about your own company’s strengths and weaknesses through AdWords. On that note, it’s important to continue highlighting what your strengths presently are and find ways to overcome your weaknesses.

A well-executed competitor analysis will make you a stronger advertiser which will open blue oceans of opportunity for you.