Conventional wisdom at RKG holds that when making strategic decisions, clients should focus on their own paid search goals and performance metrics rather than reacting to competitors’ actions. As a best practice we always follow that piece of advice; however, it can be beneficial to examine your competitive landscape to gain insight into what external factors may be affecting your PPC program.
Google’s Auction Insights report is an extremely useful tool that can be used for just such a purpose, and allows advertisers to compare their performance with others who are eligible for the same auctions on Google.
Easily accessible right from the Adwords UI, advertisers need only select a campaign, navigate to the Keywords tab and click on Details, where the Auction Insights option lives. To see auction insights for a selection of keywords, simply select those you would like to analyze prior to clicking the Details button.
It provides statistics on impression share, average position, overlap rate, position above rate, and top of page rate (see screen shot below). Advertisers should keep in mind that the data Google provides is based on a subset of the overall impressions available.
There are various observations and applications to be gained from this report; below I discuss several of them.
1. Establish a Baseline of Your Competitive Landscape Over Time
Competitors enter and exit the paid search space regularly. Looking at your competitors in January can show a dramatically different landscape than observing competition in July. For example, consider the following apparel & swimwear advertiser. Let’s disregard the specific metrics from the Auction Insights report for a minute and just consider the actual number of competitors that the report lists.
During the height of summer 2013, this client saw competition increase nearly 20%. Armed with the knowledge that more competitors enter the space during peak swim season, all else being equal this client can anticipate an increase in CPCs from the increased competition.
In order to maintain the same visibility, this retailer should be prepared to spend more in Q3 than in Q2. Whether or not the advertiser chooses to do so should be based on their own economics, but using this report to understand how external dynamics change can influence retailers’ decisions.
2. Know the Types of Competitors You Face
The Auction Insights report can be especially… insightful in determining what types of competitors are eligible for the same auctions that you enter. While it’s impossible to learn the exact economics of your competition, knowing if the majority of the other retailers in your space are brick-and-mortar vs online pureplay can shed some light on how they view their paid search goals.
Returning to the apparel and swimwear client, we can see this play out quite clearly.
In the graph below retailers Light Blue and Pink have a large brick-and-mortar presence nation-wide, while all other retailers are online-only. Looking at the data, retailer Light Blue gained 9% impression share from January to April 2014, retailer Pink gained 5%, and retailer Dark Green gained 6%. All other retailers either lost impression share or remained steady.
Q1 is generally slow for most retailers because consumers have just spent a lot during the holiday season. Whereas online retailers may see their impression share decline as bids are decreased in an effort to hit ROI goals, brick-and-mortar retailers may not have to be as conservative with bids if their investment pays off in store.
Such trends can be concerning, but it would be wise to keep in mind that pumping more money into your paid search account to counter competition from large brick-and-mortar retailers may not be the smartest decision. As mentioned, they could be using their PPC programs to drive in-store traffic where they then capitalize on their investment.
If your account is facing stiff competition at the hands of brick-and-mortar retailers, you may need to look into other ways to combat your competition: do ROI targets need to be adjusted? Do you need to shift focus on more niche terms, or long tail terms, rather than the more expensive, generic terms that larger brick-and-mortar retailers can afford?
When an advertiser consistently makes decisions based on their own targets, but does not see steady or improved results over time, using the Auction Insights report to determine what other factors are at play can assist advertisers in making smarter, more informed decisions.
3. Identify Your Own Account’s Strengths
A useful feature of the Auction Insights Reports is that data can be assessed on an account, campaign, and ad group level. As such, it’s possible to discern where in your account you have the most visibility, as well as areas of your account that could use some more attention. For example, if you see that your impression share is lower than you expect overall, it is worthwhile to dive deeper into the data and break down impression share by campaign. Take the advertiser below:
This advertiser faces steep competition account-wide, but in looking campaign by campaign, it is clear that the advertiser is more competitive in Bedspreads, Coverlets, and Sheets. After looking at other performance metrics such as conversion rate and sales per click for these campaigns, this advertiser could determine that it is financially prudent to invest more money in dominating the paid search space for these particular campaigns if it leads to more total profit in the end.
In addition to looking at the account’s strengths, looking campaign by campaign can reveal opportunities for account expansion. Perhaps the campaigns with low impression share are overly reliant on broad match keywords. In this scenario, the broad keywords are not likely to have as strong a click-through rate for the targeted queries (ad copy not as tailored, for one) and wouldn't show as frequently, resulting in lower impression share.
Amplifying the keyword coverage for that campaign will ensure that the correct keywords serve for each auction, and you will be better able to value and bid each keyword. This will often mean higher bids for more targeted searches because that traffic usually performs better.
Or maybe applying additional modifiers related to age, gender, or location will allow the advertiser to increase a campaign's visibility for a particular demographic. The Auction Insights report is a valuable tool in uncovering these types of opportunities for advertisers.
4. Use Overlap & Position Above Rate to Assess Competition on Your Brand
Examining Auction Insights on a more granular level can be particularly useful for identifying opportunities in brand campaigns. In our example above, the advertiser captures about 75% of the impression share on its branded campaign and while that sounds high, is it as high as it could be?
Using the Overlap Rate (a measure of how often a competitor's ad received an impression when your ad received an impression) and Position Above Rate (frequency at which a competitor's ad served in a higher position than your ad) metrics provided in the report can help advertisers determine if the lost impression share on their branded terms truly represents missed opportunity.
Are other advertisers serving above you on your brand terms and likely to be pushing you off the page entirely at times? How often are they serving on these searches? If the answer to these questions alarms you, it could be beneficial to look into options for strengthening your brand via paid search; a few possibilities are provided below:
- Ad Extensions that allow your ad to consume more real estate on the SERP can help edge out competition in your branded space.
- Trademarking your brand, and filing trademark violation forms with the engines can also assist in preventing other unverified retailers from using your name on branded searches. Filing a trademark form with Google does not guarantee that others will not advertise on your brand - if these other retailers actually sell your products, they will not get disapproved. However, it cannot hurt efforts to strengthen your brand.
- Bidding to the top positions for branded terms could also help edge out competition in this space. At RKG we do not like to bid to position because, as we’ve demonstrated with various studies, higher positions may increase CTR, but have no bearing on CR.
However, there are some instances – such as branding - in which an advertiser may determine that bidding to position is necessary. If competition on your branded terms is edging you out of the top spot on your own brand name and branding is part of your strategic plan, bidding to first position on these terms may be a viable tactic you employ.
Overall, apart from being an interesting report to examine in between keyword builds, the Auction Insights report provides a wealth of information that can assist advertisers in identifying areas of account improvement that will help edge out competition. Looking at the report on a regular basis can illuminate trends, as well as shifts in the competitive landscape that can help inform strategic decisions for your paid search program.