Do You Know How To Measure Your Competitor's Ads Spend & Estimate Transaction Costs

In the competitive world of digital marketing, understanding your competitors' strategies is paramount. One crucial aspect to explore is their Google Ads budget, offering valuable insights into their transaction costs. In this guide, we'll walk you through a step-by-step process to estimate these crucial metrics effortlessly.

Step 1: Count the Traffic Begin by estimating the Google Ads traffic your competitors receive. Utilize tools like Similar Web to gauge the number of visits. Remember to account for seasonality, as different industries may experience fluctuations.

Step 2: Count the Number of Sales and Transaction Coefficient Analyze your competitor's website to identify sequential order numbers. Place orders at intervals and calculate the monthly orders, factoring in potential unpaid or returned orders. This step provides a solid foundation for understanding their sales volume.

Step 3: Estimate Income Leverage your industry knowledge to estimate the average sale value for your competitor. Multiply this by the monthly order count to gauge their monthly income. This gives you a clear picture of the revenue generated by your competitor.

Step 4: Estimate the Competitor's Advertising Budget in % Now, it's time to delve into their Google Ads budget. Use tools like Serpstat to explore your competitor's PPC keywords. Export the data and focus on relevant columns such as position, search volume, and Google CPC estimator. Integrate CTR values based on ad positions into your analysis.

Calculate the budget for each keyword: Budget = CPC Number of queries CTR by position. Summing up these values provides an estimate of their total Google Ads budget.

• After exporting, you'll get the spreadsheet with lots of different columns, but we need just some of them:1.Position2.Search volume3.Google CPC estimator (CPC or cost per click in a spreadsheet)

If you want, you can also leave the query column to see the correlation between the researching keyword and its monthly budget. After deleting all irrelevant columns, you'll get something like this:

To calculate Google Ads budget better, we need one extra metric – CTR. As we all know, the ad position affects CTR: the higher the position is, the better its CTR is. Based on our experience and different research, we created a "CTR by position" table. Here it is:

Add these values to your spreadsheet somewhere. Now we have all the data required for calculation. First, we need to use the spreadsheet as an Ads keyword calculator, here is what we have to do:

Budget= CPC* Number of queries* CTR by position

We're almost there. To get the total budget of your competitor, just sum the budgets of all keywords. Here's what we finally get:

Conclusion: Understanding the Metrics In our example, the competitor's total budget was almost $10,000, constituting around 12% of their monthly sales. This knowledge allows you to compare efficiency metrics with your own data. If your competitors are outperforming, consider further analysis on their keywords to refine your strategy.

By adopting this method, you gain a valuable perspective on your competitor's income, spending patterns, and the effectiveness of their advertising efforts. Use these insights to fine-tune your digital marketing strategy and stay ahead in the competitive landscape.

#DigitalMarketing #CompetitorAnalysis #GoogleAds #MarketingStrategy #BusinessInsights #MarketResearch