Today we live in a world driven by technology. With the tap of a finger or click of a mouse, a vast amount of information is readily available for just about anyone’s use, including advertisers. In our interconnected world, accessible information has given advertisers an edge like never before. They have access to insightful information about the competition, which plays a role in the development of their overall media strategy.
Understanding the competition is crucial to any marketer. Whether it is uncovering areas where you are being outsmarted by others, or finding those gaps in the market to capitalize on and own, any advertiser who wants to remain in business must take a step outside of their internal community to recognize what is happening around them in the external marketplace. Even the most established company with decades of history needs to understand where they are going and where they have been, in relation to their competitors.
When conducting a proper competitive analysis of the marketplace, you must first identify your competitors. Competitors aren’t always who they seem to be. Sometimes you will need to think outside the box and move past the obvious suspects. Competitors can be direct and indirect: anyone that a consumer is bypassing your company for is a competitor. For example, if you’re a car company, your direct competitors are other car companies. However indirect competitors may be driving service companies which seem to be on the rise and possibly replacing the need to purchase a car. Prioritizing your list of direct and indirect competitors can be helpful in determining where your biggest threats lie. This can make gathering a competitive report digestible and relevant.
Next, you need to determine which type of data to collect as part of the competitive analysis. Competitive analyses should include a competitor’s media spend, past and current creative campaigns, share of voice in the marketplace, media mix, analysis of owned media pages like social, new technology and/or products they are putting out, any newsworthy insights, and more. It is also worth highlighting market dynamics. For example, in the pharma space advertisers must be aware of market dynamics. If another pharmaceutical company is developing a generic version of your drug, you will need to be aware and understand the drug’s implications on your media strategy and business as a whole.
Now that you have your competitors chosen and information organized, it is time to decipher what this all means for your overall media strategy and business goals. A good competitive analysis will outline where your company or brand fits within the marketplace, which can be a useful planning tool. It can help shed like on what differentiates your brand from a competitor brand and how to move forward with future advertising campaigns. After seeing where competitors are spending, whether it is broken down by media channel or geography, the information will help advertisers decide if they can afford to compete in that same sphere or not. If not, seeing where the competition isn’t is crucial to dominating a gap in the marketplace. For example, if you notice that your main competitor heavies up in local TV during Q4 of each year and you cannot afford to put out that kind of money, you can plan to own where the gap in the market is. Knowing what not to do is the most important take away from competitive reports. Avoiding the clutter and going down the road less traveled will help preserve resources, time and money.
So how can your business benefit from a competitive analysis? A competitive analysis can be directly used to help create an actionable media strategy. Understanding where and how to compete in the marketplace will ultimately reduce your risk, time and money. Using competitive data to infer where your competitors will go next, based on where they have been, while trying to gauge their objectives, strengths, and resources will help any advertiser remain competitive in the market. Competitive activity and market dynamics should be used to influence your own strategy and decision making.
Being in the know about industry trends and happenings will avoid redundancy and foster innovation. However, it is important not to get too wrapped up in the numbers and using them for benchmarking purposes. What is important, is learning from the trends, patterns, and gaps within the competitive landscape and transforming them to opportunity.