How to Do a Competitive Analysis in Digital Marketing
Staying ahead of the competition is a highly effective way to grow your business. It involves knowing the ins and outs of your competitors to identify ways you can outperform them to engage and influence customers.
A digital competitive analysis is a key part of your digital marketing strategy. It helps you understand the digital strategies of your competitors so you can leverage your strengths and minimize your weaknesses to build and grow. Plus, you don’t need expensive third parties to help you do it, everything can be done in-house if you know how.
So let’s look at how you can analyze a competitor so that you can use the USPs of your business to gain that all-important edge. In this blog, we will cover
- What is a competitive analysis
- Why you should do a competitive analysis
- What a competitive analysis includes
- The different types of competitive analysis
- Competitor analysis tools
To help you get on your way, we’ve created a competitive analysis tracker to download so you can monitor everything and turn knowledge into actionable insights.
What is a competitive analysis in digital marketing?
Competitive analysis in digital marketing is a process that researches competitors to identify strengths and weaknesses. It examines the strategies companies use for marketing, pricing, product development, and distribution to gain insights.
It will help you to keep on top of trends in your sector and identify digital strategies that will drive brand awareness, customer engagement and, most importantly, revenue.
Why should you do a competitive analysis in digital marketing?
What is the purpose of competitive analysis? Well, the scope of your competitive analysis can vary depending on what you want to discover. What you analyze can be as broad or as focused as you like.
For example, you may want to focus on optimizing your website. For this, you would look at competitors’ websites to look at their content, UX, and lead generation strategies. What you learn can then help you to apply new CRO strategies.
There are many benefits to conducting an analysis which include:
- Identify barriers and opportunities in a market
- Identify your value proposition and how it differs from competitors
- Highlight where competitors are not delivering or have weaknesses
- Target the most effective digital strategies in your marketplace
- Identify new customers and territories
- Uncover market trends
- See the potential for a new product or service
- Establish a benchmark to measure your performance against
What does a competitive analysis include?
A competitive analysis in digital marketing means that you analyze the different platforms of each of your competitors and see how they contribute to growth. Ultimately it’s about benchmarking against your competitors.
Determine competitor types
Not all competitors should be treated the same. Split them into categories based on their level of competitiveness.
- Primary – These are your direct competitors that sell a similar product or service to your audience e.g. Asos and Boohoo.
- Secondary – These companies offer a similar version of your product or service (low or high-end) to a different audience e.g. Target and Gucci.
- Tertiary – These brands are related to you but don’t compete with your product/service or audience e.g. Red Bull and Patagonia.
Segmenting your competitors like this will help you see how they relate to your business.