Understanding the competitive landscape and your competitors’ positioning and strategy has become a prerequisite to modern-day digital marketing success.
However, many marketers do not set competitive benchmarks before implementing digital strategies. Brands that do not understand how their digital campaigns — and their competitors’ activities — stack up in the market are losing millions of dollars to competitors as measured by traffic, conversions and revenue.
In comparison, smart marketers are maximizing their digital performance by first understanding their competitors’ strategies and then, and only then, building intelligent digital campaigns based on where and how competitors are winning and losing online.
Just as the coaches of winning sports teams scout the competition, brands must pay attention to the digital performance of their competitors to understand the strategies that they are running. This allows marketers and brands to build digital marketing strategies that outperform the competition and drive more revenue.
Utilizing competitive intelligence allows digital marketers to see their competitors’ secrets to success while identifying opportunities to engage customers. With the right digital content and assets, they can move them through the purchase funnel and increase RODI — return on digital investment.
Data and digital marketing intelligence
By 2020, the digital universe will grow by a factor of 300, from 130 exabytes to 40,000 exabytes, according to an IDC report (PDF) sponsored by EMC Corporation.
Laggard marketers are finding themselves with the information necessary to reach their customers, but they are unable to comb through the data to find what is really needed to maximize value.
Indeed, it was not too long ago that being able to understand your digital competitive landscape was very much a case of consulting a Magic 8-Ball and a variety of complex data sources. You would uncover just a few manual, labor-intensive results that needed to be pieced together.
Fast-forward to today, when smart marketers are now harnessing marketing technologies that collate massive amounts of digital data from multiple sources to give them a universal view of their competitive landscape across key revenue channels such as:
Below, I highlight four key competitive benchmarking strategies that smart marketers can use to uncover actionable competitive insights.
Competitors
For your digital strategies to be complete and effective, you will need to know your competition. While most marketers have a list of rival brands they track, it is very likely that they face competition from companies and brands they might not be aware of in digital environments. Whether you work in retail, travel, finance, technology or any other vertical markets, you will have a list of competitors.
In digital marketing, competition is fierce and constantly changing. Digital marketing competition can vary by vertical, business unit or product line.
In retail markets, for example, demand for various products differs based on the particular product and the specific region. Knowing this allows you build your unique differentiators. According to a published case study (PDF), Nivea for Men did this as part of SWOT analysis to expand the market and grow international revenues by 20 percent.
Share of voice AND share of market
Share of voice (SOV) is about how much of the digital pie you’re getting — what percentage of the overall digital space is yours.
Changes in digital share of voice can relate directly to market share.
A study done by Millward Brown (PDF) found that brands that increase their digital SOV are more likely to increase their market share over time. Using the BrandZ database, Millward Brown looked at more than 4,000 brands from 28 countries in 56 different categories. For each brand, they measured the brand’s overall share of voice (both digital and traditional) and digital share of voice. They found that the correlations for overall share of voice with market share growth were statistically significant.
You can also measure progress by looking at how your share of voice stacks up against the competition at various stages of the buyer journey. Doing this allows you to align, refine and optimize digital messaging, campaigns and assets to maximize conversions across all areas of the buying cycle. (Further examples, including retail case studies, can be found in this e-book from my company, BrightEdge.)
The identification of previously hidden opportunities can result in massive increases in conversion and revenue.
Gap analysis
Gap analysis helps you compare how well you are attracting and engaging with your target audience in relation to your competition. Gap analysis empowers digital marketers to:
find out where and how competitors are winning and you aren’t;
compare campaigns, themes, topics and digital assets; and
build digital strategies and optimize campaigns to close any gaps.
Gap analysis can bring you clarity about messaging, content strategy and performance of digital assets to help you make informed decisions.
It also helps establish process, policy and precedence around managing digital and content marketing campaigns. Gap analysis equips you with the granular detail to go forth and optimize digital content and digital assets to build winning strategies.
Monitoring
Digital market trends are constantly in flux: customer preferences change from season to season, and competitor strategies can shift dramatically. To remain competitive and stay one step ahead of the competition, it is important to constantly track significant shifts in the digital landscape.
Smart digital marketers set up systems and build reports to automatically identify anomalies in the market and feed this right back to the relevant business units so action can be taken immediately. This also helps you move from a dashboard viewer to an outcome driver in your organization.
Anomaly reports are also a compelling way to communicate with stakeholders and get buy-in on the digital strategy you’re proposing. This is especially the case when quick approval is needed in order to address important changes in the market with new, or existing, competitive strategy.
Conclusion
Gaining an in-depth understanding of the key strategies being used by top-performing competitors provides digital marketers with the insight and knowledge needed to gain a competitive edge.
Understanding competitive trends at a foundational level, across all your digital channels and assets types, allows you to:
benchmark where your organization stacks up against the competition and
progress along the search, social, and content marketing maturity curve.
The digital transformation results are tangible in the form of increases in market share and revenue gain.
Comments