Understanding Your Competitive Landscape with Google’s Tools

In Tim Ferriss’ good book The 4-Hour Workweek he describes how to estimate the revenue from any product with the Google Adwords Keyword Tool. I’ve been thinking: what other valuable marketing information can be gained from Google’s free tools? Take the issue of market share, lets say you have an idea for a new niche product but don’t know who might be competing for the same consumer or how much of the market is already served. You can look at the major industry databases like Market Share Reporter (MSR) or Hoovers. However, unless you are thinking about competing in a major product category (e.g., automobiles, toilet paper, luggage) your market won’t be on their radar. A better way is to follow these steps:

  1. Find out who is bidding on Adwords keywords that are closely related to the product you are thinking about offering (i.e., Adwords that you would bid on to get buyers to your website). As Ferriss says: you use the Google Adwords Keyword Tool to find the words that consumers use to find products like yours and then search using those keywords and make a note of which companies come up in the paid search results (top section and right margin).
  2. Now use another Google tool called Insights for Search (Insights)to see how frequently consumers search for the company names found in step 1. Insights only allows you to look at search history for 5 companies at once, but you can assemble a full list by aggregating results from separate sets of 5 different companies. I  argue in the paragraphs to follow that you now have a prediction of future market share.

Take a look at the following example. Here I’m searching the names of motorcycle brands. Note the two boxes, one around the drop-down box containing the word “Motorcycles” and the other around the bar chart. The drop-down box is one of the most useful features of Insights because you can isolate your search to a specific category so to be sure your results really represent what you intend them to. Take for example the search term “harley.” In this situation I want to know the prevalence of searches for Harley-Davidson motorcycles. I know that some people will abbreviate their search term by using “harley,” so I want to capture that search volume in addition to that of the full brand name. The problem is that some “harley” searches have nothing to do with motorcycles, so to be sure I only get the ones for motorcycles I select the Motorcycle category in the drop-down box.

Figure 1. Google Insights for Search

The bar chart is the information I’m looking for. Note how each bar in Figure 1 has a number beside it. If you try this yourself and don’t see a number then sign up for a free Google account and login. The number is a percentile for search frequency. In this case it indicates how often the keyword “harley” is searched for compared to all other searches in the Motorcycle category. The number 70 means that within the Motorcycle category 70% of all other searches happen less often than searches for “harley.”  Why this number is important to marketers is because it is a measure of attention.

Now lets review a little marketing theory. Perhaps the oldest marketing model is the AIDA model of the phases someone goes through when they buy a new product: Attention -> Interest -> Desire -> Action. Market share statistics like those from MSR  in Figure 2 measure Action, the sales that happened in the past. How can you tell what sales will happen in the future? You look at measures of the earlier phases, and right here in Insights we are looking at measures of Attention.

Figure 2. Market share for motorcycle brands.

Two months ago, before the summer riding season started, I used Insights to see where consumer attention was in the motorcycle category. Today I checked it again with results as in Figures 3A and B. If you compare Figures 2 and 3A you can see that pre-season riding attention was predicting a modest increase in market share for Honda, Yamaha and Ducati, seemingly at Harley’s loss. Generally though it seemed that attention was consistent with the 2009 market shares. Now that the season is underway Figure 3B is indicating not only higher attention for all motorcycle brands, but a restoration of Harley to the top dog position. The really interesting observation is the big surge of interest in the European brands, particularly BMW and Ducati. Will this increased attention turn into a transfer of market share? My prediction is “yes,” and probably to the detriment of Yamaha, Kawasaki and Suzuki.

Figure3A and B. Attention on motorcycle brands.

I started this post by saying I would show you a way to get market share data for any category too small to be on MSR’s or Hoover’s radar. Now you can see that I’m telling you a way to get a prediction of future share. But what’s better: knowledge of the past or prediction of the future? My example was for a major category that is monitored by MSR. I used that example because I wanted to show you that there is consistency between MSR and the free Google attention data. Now go do some marketing!

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