Staying ahead of competitors is essential for business growth. Competitive analysis in digital marketing allows you to understand your competitors’ strategies, strengths, and weaknesses. This knowledge helps you leverage your unique selling points and develop tactics to engage and influence your target audience effectively. With the rise of AI tools, conducting competitive analysis has become more accessible and efficient, even without third-party help.
In this guide, we will explore:
- What is Competitive Analysis in Digital Marketing
- Why Conduct a Competitive Analysis
- Key Components of Competitive Analysis
- Types of Competitive Analysis
- Essential Competitor Analysis Tools
What is Competitive Analysis in Digital Marketing?
Competitive analysis in digital marketing involves researching competitors to uncover their strengths and weaknesses. It examines their marketing approaches, pricing models, product development, and distribution channels to provide actionable insights. This process helps you stay updated with industry trends and identify digital strategies that enhance brand awareness, customer engagement, and revenue.
Why Conduct a Competitive Analysis?
The scope of competitive analysis varies depending on your goals. You might focus on optimizing your website by examining competitors’ content, user experience, and lead-generation techniques to improve your conversion rate optimization (CRO).
Benefits include:
- Identifying market barriers and opportunities
- Defining your unique value proposition compared to competitors
- Spotting competitors’ weaknesses
- Targeting effective digital strategies in your market
- Discovering new customer segments and regions
- Recognizing emerging market trends
- Evaluating potential for new products or services
- Establishing benchmarks for your performance
Key Components of Competitive Analysis
Competitive analysis involves reviewing your competitors’ digital platforms to benchmark your growth potential.
Determine Competitor Types
Segment competitors based on their relevance:
- Primary: Direct competitors with similar products and target audience (e.g., Asos vs. Boohoo)
- Secondary: Offer similar products to different audiences (e.g., Target vs. Gucci)
- Tertiary: Related brands without direct competition (e.g., Red Bull vs. Patagonia)
Profile Competitors’ Target Customers
Understanding who your competitors target provides insight into their digital strategies. Use sources like their mission statements, social media engagement, blogs, podcasts, customer reviews, and digital listening tools to learn about their audience and tailor your tactics accordingly.
Apply the 7Ps of Marketing
Analyze your competitors’ marketing using the 7Ps framework:
- Product: What they sell and product features
- Price: Pricing models and attractiveness
- Promotion: Promotional channels and tactics
- Place: Sales channels—online or physical stores
- People: Staff involved in customer interactions
- Process: Delivery systems and workflows
- Physical Evidence: How they showcase their offerings
Identify Best Practices
Successful competitors often have optimized strategies. For example, frequent use of platforms like TikTok or strong SEO rankings indicate areas to consider incorporating into your own marketing plan.
Use Analytical Frameworks
Choose frameworks based on your analysis goals:
- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats
- Porter’s Five Forces: Assesses market competitiveness and supplier/buyer power
- Boston Consulting Group Growth-Share Matrix: Evaluates products by market share and growth potential
Organize Data for Analysis
Maintain structured data on competitor pricing, social media activity, lead generation, content marketing, and special offers to identify trends and opportunities easily.
Types of Competitive Analysis
Depending on your objectives, focus on specific digital marketing channels to improve KPIs such as leads, revenue, and brand awareness.
Social Media Competitor Analysis
Examine competitors’ social media presence, audience demographics, posting frequency, content types, and engagement metrics to optimize your own social strategies.
PPC Competitor Analysis
Analyze competitors’ paid search keywords, ad types, platforms, and landing pages. This helps develop more effective PPC campaigns by understanding where your competitors invest their budgets and how they position their messaging.