Checking out the competition

I’ve been taking a look at internet audience growth in some of the major markets over the past year or so as published by Nielsen NetRatings in ClickZ Stats (http://www.clickz.com/stats). They make interesting reading. The overall home internet audience in this assortment of countries is up by about 6% year on year but some of the larger markets such as the US, the UK and Germany are showing little signs of growth. Naturally there will be changes within these overall figures but there are indications here that overall reach is beginning to plateau off in some markets. The implications are that businesses in these are not going to be able to rely on natural organic growth for much longer and are facing a more competitive environment.

In my last article I outlined my view that “web analytics” is more about what comes out of a web analytics system, it’s much more holistic than that. If you are serious about online business performance analysis then you will require a multitude of different inputs as described last time. Given the increasingly competitive nature of the market in some countries, having good market I and competitive intelligence is going increasingly to be an important part of the mix. Most organisations operate in a competitive environment whether you’re competing for share of wallet, share of mind or share of funding.

Where does this market intelligence come from? There are a number of different data sources where you might get information on what happening in the market and what your competitors are up to. Most of them are provided by specialist third party data providers, some of them you have to pay for and some of them are free. Some of them are global, others are only available in some markets, so you do need to look around and see what’s available in your part of the world. Different data providers use different ways of collecting the data and to ensure that you use the data appropriately; you need to know how the reports have been created.

On the “global, paid for” end of the scale you have services from companies such as Nielsen NetRatings (www.netratings.com), comScore (www.comscore.com) and Hitwise (www.hitwise.com). Whilst the output from these services can look similar to each other, the data collection methods vary. NetRatings and comScore collect data from a panel of internet users and Hitwise mainly collects its data from ISPs. One the main differences in terms of output is that the panel companies will produce volumetric estimates of reach (ie unique visitor metrics) whilst Hitwise produces market share rankings.

At the “free” end of the scale there are a number of services available as well that can provide information on site rankings and traffic volumes. Alexa (www.alexa.com) was probably one of the first on the market, collecting traffic data from people that download and use their toolbar. Other services include Compete (www.competeinc.com) and Quantcast (www.quantcast.com) that uses multiple data sources to produce traffic volumes. There is also Attention Meter (http://www.attentionmeter.com/) that aggregates data from these various free sources. The thing is be aware of about the free sources is that the data quality may not be as high as the paid for services, particularly outside of the US.

However, competitive intelligence is not just about knowing how much traffic your competitors get compared to you, it’s also about how they are performing. Depending on what type of business you are in you may be able to get information from benchmarking organisations. Here in the UK in the financial services industry all the main players pool their data into a benchmarking company that then aggregates it and then supplies it back to all the participants with their competitors data anonymised. There are examples where web analytics companies do something similar in certain industry verticals, so you can compare your conversion ratios against others in your sector.

Another approach may be to carry out your own primary research. Your customers may also be your competitors’ customers and so you can use surveys to understand how your customers, users or visitors feel about the performance of your site or your business compared to other sites that they use within your sector or against reference sites that you may want to benchmark yourself against. Getting these types of insights from your own users can be very powerful.

So as organic growth begins to ebb away, more organisations are going to need to be aware of they stack up in a competitive environment. How do you compare?

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