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PPC 17 min read July 15, 2020

How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods

How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods
Андрей Белоусов
Andrey Belousov
Growth Hacker at Serpstat
Sometimes it isn't easy to calculate the estimated costs of contextual advertising since many factors must be taken into account. It is especially challenging to do this if you have not previously launched advertising campaigns. However, we have a solution to this problem!
If you want to calculate advertising costs - see how much a competitor spends on it! This data will help determine the potential of a niche and calculate how much you need for your advertising campaign.

How to find competitors in contextual advertising
Before you start calculating a competitor's budget for advertising, you need to find out who to analyze. Therefore, the first step is to find direct competitors in PPC, notably since they can differ from competitors in organic search.
You can do it with Serpstat. Just enter the address of your domain in the form below and click Get Data:
Another option - you can see competitors in Serpstat interface. To do this, select the report Website Analysis → Domain Analysis → PPC Analysis → Competitors, enter the address of your domain in the search bar, select the search base and click Search.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419171
This report has the following indicators:
Competitors: a list of competitors in paid advertising for the analyzed site. Serpstat finds competitors with common semantics in context by analyzing SERPs for the keywords by which domains are ranked. The analyzed site will always be in the first place in the report.
Common keywords: the number of phrases for which the analyzed domain and competitor launch paid ads.
Missing keywords: phrases by which a competitor gives paid ads, but they are absent in the analyzed domain's semantics. The metrics for Common Keywords and Missing Keywords are clickable. By clicking on the numbers, you will find a list of these phrases.
All keywords: the number of key phrases that a competitor uses in contextual advertising.
Total ads: the number of competitor ads.
We have a list of competitors and key indicators; now, you can consider the budget. Note: we will use several methods. Each of them has its pros and cons.
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Direct method of counting: 4 simple steps
Enter the competitor's domain in the Serpstat search bar and go to the Website Analysis → Domain Analysis → PPC Analysis → Keyword Selection report. This tab lists all the keywords for which the search domain launches contextual advertising.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419172
This report has the following indicators:
Ad Examples: a paid ad that shows for a keyword.
Keyword: key phrase for the ad to appear on.
Keyword difficulty: assessment of the competition level for a keyword to promote in organic search in the top 10.

The indicator is measured in percent (%):
  • 0-20 - easy;
  • 21-40 - medium;
  • 41-60 - difficult;
  • 61-100 is very difficult.
Position: the position of an ad in search results.
Volume: the number of queries per keyword per month.
CPC: cost-per-click according to Google Adwords depending on the selected database.
Competition: level of competition for a keyword in paid results (from 0 to 100%). The more domains use this keyword in promotion, the higher the level of competition.
Now export this list in a format convenient for calculations. Select the following columns (Position, Volume, CPC, Ad type):
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419172
To estimate the budget, we will need an additional indicator - CTR. The higher the position, the better the CTR. There are also 2 blocks in search results:
Above the organic search. It's located at the top of the page and is called Premium in AdWords. In Serpstat, this is the first type of ad.
Under the organic search. It is located at the bottom of the search results page and is called Bottom (or Side). In Serpstat, this is the third type of ad. In the lower block, the CTR is 5 times lower than in the upper.
We will use the following values:
The budget of the keyword is calculated according to the formula:

Budget = cost-per-click * number of requests * CTR of position

We have already uploaded the data and decided on the calculation formula. Now you need to:
Open the report you uploaded in Google Sheets.
Open the example.
Copy columns F - J from the example to your file.

Quick way
Here's a pretty simple way to analyze a competitor's budget:
Go to the Website Analysis → Domain Analysis → PPC Analysis → Keywords report and enter your competitor's domain. The easiest way to do this is through the form below.
Export the report. Leave only the columns Position, Volume, CPC and Ad Type.
Import the file into Google Sheets.
Copy columns F - J from the example to your file.

How to do the same through the API Console
You can get similar results through the Serpstat API Console. Open the API console and enter:
API token from your Serpstat profile (if you have a Lite plan, set 1 request per second. For other plans - 10).
Search engine and region (several are possible). To search for the desired region, you can use the search form on the right.
Ad Keywords method.
In Queries, enter one or more competitor domains.
Click on Get Data.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419172
Group data by domain: SQL→ SQL Snippets→ Group By Domain.
Click Evaluate SQL.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419172
Get the total data for domains. In the column traff_cost you will see the competitor's budget.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419173
However, for the convenience of Serpstat users, the CTR of the first place is set as 100%. It's easier to estimate the share of traffic received from SEO. Therefore, the Console uses exactly 4 times greater CTR than in the previous method. Thus, the final budget must be divided by 4.

Console advantages
You don't need to create a Google Sheet.
There are no restrictions on the number of lines in a report.
You can group data not only by domain, but also, for example, by URL and get an estimate of the budget by product category. Or see the most important landing pages of competitors.
If you have already received the data, the API lines will not be spent until you click Get Data again.
Processing occurs on your computer almost instantly.
For example, you can filter by keyword or URL and get a budget by product category.

Console disadvantages
You will spend API credits.
Console is in alpha-version.
If you use a table, you can configure the CTR as you like.

Reverse method
We assume that your competitor acts rationally and his advertising budget depends on the result. Advertising usually spends about a third of the benefits that it brings. Therefore, you need to evaluate the budget as follows:

Budget ≈ (Revenue - Variable costs) ÷ 3 = (Revenue * Margin) ÷ 3

An online store's variable costs are the purchase prices of goods if there is no free shipping and installation. The margin level is approximately the same in the same niche. It remains only to calculate the revenue that contextual advertising brings to business.

You can estimate the share of revenue from search contextual advertising using the share of traffic that it brings. Open SimiliarWeb and multiply the search share by the paid search share.

How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419173
Absolute numbers in SimilarWeb should not be trusted, but relative numbers are pretty accurate.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419174
In our case, the share of search advertising = 47.27% * 37.59% = 18%
Now it remains to evaluate the income. This can be done in the following ways:
Multiply your revenue by the ratio of competitor site traffic to your traffic. For example, your revenue is 100K per month, SimilarWeb shows you have 1 million traffic per month, and your competitor has 3 million. So, the competitor's revenue is somewhere around 300K.
Via purchase ID: place an order at your competitor's site; if its number is 003139, it is the 3139th sale on the site. Make a second order in a week. Let's say it will be order number 003212. Calculate how much the site processes each month (subtract the smaller value from the larger one). The received number is the number of orders per week. Not all placed orders are paid. It can be assumed that the non-purchase percentage is approximately 20%.

We get: (3212 - 3139) * 0.8 = 59 orders per week = 234 orders per month. You know about the average bill. Let's say it is $ 300. $ 300 * 234 = $ 70,000 of income per month.

On this basis, we calculate the approximate budget:
The competitor's revenue is somewhere around $ 70,000. The share of search advertising is 18%. Accordingly, $ 70,000 * 18% / 3 = $ 4,200.
Based on the fact that the price of advertising is about three times less than revenue, we get this result.
How To Collect A Semantic Core For Contextual Advertising And Get Maximum Outreach

Comparison method
It only works if you have already launched contextual advertising for a long time. We project our results onto competitor results.

To do this, we consider the competitor's budget as the direct method, then we consider our budget by the same method and multiply by our real budget.

For example:

Your real budget is $ 10,000. The direct method showed your budget of $ 5,000, which means that the direct method is understated by half. If a competitor's direct method showed a budget of $ 3,000, then his real budget is about twice as much.

Thus, we get rid of the systematic error of the direct method. However, you should not do this if you have drastically changed the budget for search advertising over the past year.

In the direct method, we use the CPC that we received from Google. It does not depend on the position taken by the ads. But the fact that your ads and competitor's ads may occupy different positions and they may have different CPCs.

The most interesting thing is that click-through rate (CTR) does not directly affect the cost. If the positions remain the same, an increase in CTR will reduce CPC, but it will also increase the number of clicks and, as a result, the expense will remain the same.

How to do it with Console
Select Ad Keywords method.
Enter your domain and the domain of your competitor in Queries.
Click on Get Data.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419174
Open SQL tab.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419174
Enter the code.
In the code, replace alltime.ru with your domain; bestwatch.ru with your competitor's domain.
WITH your as (SELECT * FROM `results` WHERE domain='alltime.ru' AND traff_cost>0),
     comp as (SELECT * FROM `results` WHERE domain='bestwatch.ru' AND traff_cost>0),
     cros as (SELECT your.traff_cost as your_traff_cost, 
                     comp.traff_cost as comp_traff_cost,
                     your.traff      as your_traff, 
                     comp.traff      as comp_traff,
                     your.position   as your_position, 
                     comp.position   as comp_position
              FROM your 
              INNER JOIN comp ON(your._se=comp._se AND your.keyword=comp.keyword)),
    sum_your as (SELECT sum(traff_cost) as your_traff_cost FROM your),
    sum_comp as (SELECT sum(traff_cost) as comp_traff_cost FROM comp),
    sum_cros as (SELECT sum(your_traff_cost) as cros_your_traff_cost, 
                        sum(comp_traff_cost) as cros_comp_traff_cost 
                 FROM cros)    
     * (cros_your_traff_cost/cros_comp_traff_cost)  as budgetRate, 
       (your_traff_cost/comp_traff_cost)            as reachRate,
       (cros_your_traff_cost/cros_comp_traff_cost)  as cpmRate
    SELECT * FROM sum_your 
        LEFT JOIN sum_comp ON(1=1)
        LEFT JOIN sum_cros ON(1=1)
Click Evaluate SQL.
How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods​ 16261788419174
budgetRate — how many times your budget is higher than that of a competitor.
reachRate — how much higher is the value of traffic for the same click-through ads.
cpmRate — how much your bid is higher. It's more accurate to bid on the clickability of an ad (in the wCTR Direct). How many times you pay more per impression.
Please note that the calculation, in this case, may take several minutes, especially if the total number of keywords is more than 10000. The browser tab may freeze for a couple of minutes.

You can also research all competitors at once and not one by one. To do this, you need to enter your domain and all competitors into Queries, and then, instead of bestwatch.ru, enter your competitors in the code in sequence and press Evaluate SQL.

We examined several methods for evaluating a competitor's budget in contextual advertising. In the following articles, we will talk more about competitive analysis in PPC. Subscribe to our blog, so you don't miss anything!
There are many more interesting PPC articles on the Serpstat blog!

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