How To Discover A Competitor's Budget For Contextual Advertising: 3 Unusual Methods
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.
You can do it with Serpstat. Just enter the address of your domain in the form below and click Get Data:
The indicator is measured in percent (%):
- 0-20 - easy;
- 21-40 - medium;
- 41-60 - difficult;
- 61-100 is very difficult.
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:
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.
Now it remains to evaluate the income. This can be done in the following ways:
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.
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.
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.
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.
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