How to use competitor’s advertising budget for promotion
One key point in developing a marketing strategy is analysing the market and competitors. In this case, it is essential to estimate the approaches of industry players and their advertising budgets. This information will help you better understand your competitor’s income and expenditures. It will also allow you to form realistic expectations about the effectiveness of advertising.
Stages of analysis
Estimating your competitor’s advertising budgets involves several steps. These steps make the process of data collection and analysis more structured and thorough. You must start by calculating the Google Ads traffic coming from the competitors. To do this, you can use various services that provide this information. A popular option among marketers is SimilarWeb.
When assessing effectiveness, it is necessary to consider the business’s specifics and the niche’s characteristics. For example, the sales volume in many online shops depends on the season. We are talking about sellers of recreational goods, agricultural products and others. Accordingly, traffic will depend on whether it is a low or high season for the business.
The next step is the number of sales and the transaction ratio. In this case, the order sequence dramatically simplifies the calculation. This is the approach that almost all e-commerce operators have in place. It is ideal for estimating sales volumes. Algorithm of actions:
– a specialist places an order on the competitor’s website and records the number;
– you can repeat a similar process a week later to understand the volume of orders for that period;
– based on the information obtained, it is possible to calculate the number of sales for the month.
With this estimating method, it is essential to understand the number of orders registered but not fulfilled. For example, a user may have purchased but not paid for it. For most online shops, such cases do not exceed 10%.
You can also calculate the approximate revenue based on the number of orders. However, only if the company sells one type of product will you be able to obtain this indicator.
Estimating the advertising budget
Now, you can proceed to estimate the advertising budget. You must find the PPC keywords using an exceptional service to do this. They are the most important for creating an advertising campaign in Google Ads. It is advisable to export all the data obtained from this service into a separate file. It is also interesting to analyse the search volume and the price per click. It is also significant to evaluate the CTR in the Google program. This indicator is directly related to the ad’s position in the issue. To calculate the budget for a keyword, you need to take three values:
– the price per click;
– the number of queries;
– CTR by position.
You should multiply them together. This will give you the cost of a keyword. You must add the results for all keywords to estimate the total advertising budget.
