By Palveer Kandola

Account managers bear a significant level of responsibility when it comes to explaining changes in performance, particularly where costs are concerned. Ultimately, you are responsible for managing and utilising budgets in the most efficient way possible and as soon as the metrics you hold close and dear start to creep up (be it CPA or ROAS), it can send all sorts of alarm bells ringing. More importantly, you’ll need to provide answers for why the change has occurred. To ease the process, this blog article aims to address various options for presenting competitor insights to your clients, covering the tools available and how to use them. 

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Why go to the effort?

Competitor analysis is super handy. At first it can prove to be relatively time consuming and manual, but the result is often enlightening. In most cases you’ll find you are able to easily identify a cause for changes to your KPIs as summarised below:

  • A growth in average CPC – Clients will often ask why they are paying more for their clicks, which initially suggests an increasingly competitive auction. By presenting this information to clients in a graphical format that illustrates the trends, not only will you impress them with your creative skills, you’ll be able to show why CPCs have inflated.
  • Who’s competing in the auction – A clear competitor graph will allow you to focus attention towards those competitors that are bidding more aggressively and causing you real discomfort. Not only are you able to keep a close eye on the culprits and use their auction behaviour to inform your own strategy, you may also identify where your client’s terms are overlapping with strategic partners.
  • Changes over time – You may have a client that is interested in competitor activity over time. Competitor charts are exceptionally useful for illustrating this. They can indicate certain behaviours such as competitors appearing in higher positions or bidding more aggressively at weekends/over holiday periods. Clients are often ecstatic when you are able to share and present these insights.
  • Lower CTRs – Fewer people clicking on your ads relative to the number of times your ad appears can raise a number of questions. A simple change in a competitor’s approach to messaging in ad copy, CTAs (calls to action) or ad extensions may lead people away from your content. Having identified who the perpetrators are, the ad preview tool alongside in house tools will allow you to focus on their most influential changes, enabling you to devise an informed plan of action for your clients.

How to create competitor charts

Auction Insights

Auction Insights is a tool that allows us to compare who is appearing in the auction and to what exent at an account, campaign, ad group or keyword level. You’ll first need to select a relevant time period over which you saw a fluctuation or change in CPCs. Next, download this information segmented by day or week and export the data to Excel. By selecting the data and creating a pivot chart, you’ll be able to input the day or week as rows, website domains as columns and impression shares as values. From this table, you are finally able to generate a pivot line graph that highlights the trends and changes in competitor behaviour for the selected time period.

In the example below for one client, we could see an increased level of competitor activity around June that was driven predominantly by competitor X.1. Over this same period, we could see a clear correlation between the increase in avg. CPC against the level of competitor activity by X.1. Despite an overall increase in CPA, the charts presented below meant the client was able to fully appreciate the cause behind the increase.

Impression share 1st June – 26th July 2017:

Competitor impression share chart

Average CPC 15th June – 24th July 2017:

CPC increase chart

However, there are limitations that need to be considered when using auction insights. Firstly, AdWords samples the data. This means that out of all the impression received, the auction insights may pertain to only a certain percentage e.g. 44% of total impressions. Therefore, if the 56% that’s not included shows contrasting trends, it could undermine the data as a whole. Unfortunately there is no quick fix for this issue and so general assumptions must be made. Secondly, you would need to select a time period that includes enough data for Google to generate an adequate sample. In other words, if there isn’t enough data, dinner won’t be served.

Ad Preview Tool & Scripts

Aside from Auction Insights there are other tools available that can reveal how competitors may be gaining an upper hand. Simply searching for terms using the ad preview tool will provide a relative idea as to how often your ads are appearing and against who in real time. The benefits of this method are that it allows you to compare calls to action, ad extensions and general ad appearance against competitors. Here at Merkle, we have our own internal capabilities that allows us to monitor competitor ads. It’s incredibly useful for keeping a close eye on changes to competitor ad copy and messaging to inform our own strategy. It is a tool highly valued by our clients that love staying on top of their competitor activity.

Conclusions

There are various tools within the AdWords interface which provide useful insights relating to CPC/CTR fluctuations, pin pointing encroaching competitors and observing changes in competitor behaviour over time. By exporting to and manipulating the data in Excel, you can create charts to clearly illustrate your findings to clients. In combination with these charts, the ad preview tool and other in house tools result in an ability to closely monitor competitor messaging, CTAs and ad extensions to hone in on any ad changes that may have caused an influence. Moving forward, you’ll be equipped with the tools and knowledge to develop an informed strategy which will keep you ahead of the competition.

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