How to Outmarket, Outmaneuver, and Dominate Your Better Funded Competitors and Leverage Their Greatest Strengths Against Them

This is part 2 of a series of indeterminate length about succeeding in a crowded market. You can read the first part here.Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage. -Niccolo MachiavelliIf you’re in any decently-sized marketplace, you’re going to come up against at least a few significant competitors. Let’s face it, at this point, pretty much all demand in any market is being met by…something at least. Some of your competitors, even if you think they have an inferior product, are probably better-funded, have stronger brand value, or have well-developed inbound marketing campaigns (or all three). They’re probably running numerous successful, established campaigns across multiple channels. If you go up against them directly, on their turf, they will destroy you.But, if you take a tactical, tightly focused, agile approach, you can defeat even the most entrenched behemoths. Here’s how you can run circles around your biggest competitors, no matter how much money they throw at stopping you:

Watch as Stability Turns into Stagnation

Like it or not, in the fast-moving Internet marketing world, being an established player that has been around for a while confers tremendous advantages. These benefits can manifest directly in the significant organic ranking and quality score boost Google gives to aged domains (those that have been registered for more than a few years without a change in Whois). This is presumably because, unlike, say, keyword density, domain age is much harder to game.But the effects of age can also manifest themselves in other, subtler ways. An affiliate who has been running an offer for a while has demonstrated that he is capable of consistently delivering high quality traffic. As a result, he is probably getting a higher payout than you and can afford to outbid everyone else.And of course, any performance advertisers running traffic for some time have had time to collect lots of data, optimize their campaigns, and remove low-performing ads and keywords.But consistent stability also breeds complacency. And as any affiliate who has watched his earnings from a previously stable campaign dwindle into nothingness over time, in this business, complacency is death.Leverage your competitors’ complacency and turn it against them. Where are they getting weak, fat, and lazy?Look at the highest converting keywords you covet most. Do you see your competitors rotating different headlines and landing pages or are they using the same ones? Is their ad position changing a lot (implying that they are actively managing their bids) or is it holding steady?If you’re seeing a lot of stagnation in your competitors’ campaigns, that’s when you know it’s time to strike. Start bidding aggressively, using a variety of diverse headlines and landing pages. The more completely diverse appeals you try, the higher the chances you will stumble on a combination of medium and message that produces significant lift in conversions or CTR, thus negating their established history and higher bids. Most advertisers lack the ability to monitor changes in their ad position and performance for every keyword. Once something is profitable, more often than not, they will fall asleep at the wheel and let the campaign run on autopilot as they move on to optimizing different market segments or traffic sources.This is especially true with contextual (cost per view) and display campaigns, and of course SEO. Most advertisers will optimize a campaign to the point of profitability and then leave it alone, opting to move on to completely different channels. For you, this means that when you go up against big advertisers, on keywords and placements they are not actively optimizing, you’ll be able to capture some traffic and market share without engaging in a bidding war with them. A big ad budget isn’t worth much if you aren’t actively using it. This method can be hugely profitable, especially on the long tail and at the fringes. There’s no need to fight a losing battle with a big advertiser over traffic they’re actively seeking. Instead, slowly but steadily sap the traffic they don’t even remember they have.

Exploit Their Testing Budget by Scaling Horizontally Into New Channels

By running a large campaign, your competitors are releasing lots of data into the wild. Thousands of headlines, keywords, banner ads, etc are all publically available for you to study and learn from. Remember, Internet marketing isn’t magic. It’s simply scientific testing and the application of a few fundamental principles.When you see large, well-funded competitors extend their tendrils into thousands of sites and keywords(you know, when you get the sense that you’re seeing their ads everywhere), it’s easy to feel frightened and overwhelmed.”How could I ever compete with them?” you think. “Their brand is so…established”.But they’re not doing anything special. They just have a bigger testing budget than you. And a bigger testing budget simply means they can afford to make more mistakes.So let them make mistakes and spend their money testing. Then, once they’ve figured out what works, and started scaling it, when you’ve seen many ad variations replaced by one or two they are running consistently, it’s fairly easy to figure out what the most effective way to reach that particular target market is.You probably shouldn’t copy their ads exactly. But there’s nothing wrong with taking the fundamentals of their campaign, like their main appeal(is it a price appeal? a particular benefit appeal?), main keywords, the types of images they use in their banners, and scaling them horizontally to other, very related traffic sources and demographics.Do you think every single Google advertiser is also on Yahoo/Bing? Is every Pulse360 advertiser also running the same ads on AdSonar? Is every single PPV advertiser distributing campaigns evenly between TrafficVance, LeadImpact, and MediaTraffic?One of the most effective ways to easily generate new revenue is taking an existing campaign and porting it over to a related traffic source. Why not do the same with your competitors’ campaigns? There are plenty of keyword research tools out there that will show you competitors’ exact ads and keywords. (I recommend SEMRush). Learn from those campaigns, and scale them up.Wait for your large competitors to optimize their campaigns, learn the fundamentals that make them effective, and port them over to related traffic sources.Remember when I posted some of the most effective Facebook ad images? Thousands of people downloaded those images. Most simply put them, unchanged, into new Facebook campaigns. Those campaigns faltered, because Facebook users had already developed banner blindness for those images. But a few clever people looked at those images, which were the result of many different advertisers spending millions of dollars testing, and figured out which specific patterns, like a picture of a crying baby, were most effective.Then, they used those tried and tested patterns to build out campaigns on alternative, less saturated, yet technically similar traffic sources like Plenty of Fish, and got profitable very quickly.Let your competitors spend money testing and optimizing. The bigger they are, the easier it will be for you to quickly learn what works best.Then learn what works, adapt it to your own campaigns, and scale.tl;dr Summary: Having strong, well-funded direct competitors with large paid traffic campaigns gives you two advantages you probably weren’t aware of:

  1. Their campaigns are so large that they are not actively optimizing/managing bidding on all of their keywords and media buys, especially towards the long tail, leaving an opportunity for you to come in and take over.
  2. The wide reach of their ads makes it easy to collect lots of data on what works best. You can effectively hijack their massive m
    arketing budget for your own benefit. Large marketing spend means you can collect lots of accurate data from keyword tools, demographic research tools like Quantcast, as well as old-fashioned manual competitor research.

As you may have guessed, the upcoming release of insight.io will automate and scale many of these data collection and optimization tasks for you…but that’s some time away. It won’t hurt to put your email on the beta list though 🙂

  • Martin

    While what you’re talking about is good in theory, what you’re forgetting is that the biggest advertising companies have very detailed automated systems handling accounts and adwords after they’ve established an interest in them. A focused person likely will do a better job than the automation, but it won’t be much compared to the difference in effort that you’re exerting.I worked for a company like this. Tens of thousands of adwords all managed by a system that will take care of most things, and fire alerts to the employee overseeing that chunk of accounts if something less predictable happens. It worked exceedingly well.

  • Ilya Lichtenstein

    You’re right, the biggest advertisers use expensive bid management software to manage their search bids and keep track of changes. However, it gets lot murkier when you start competing with them across numerous channels- social, direct media buys, niche vertical ad networks, etc. As far as I know, there’s no integrated way to monitor your performance on every placement and traffic source out there.Might be a business opportunity for an enterprising startup 🙂

  • Alex McIvor

    I run a dating site for gay men and recently did something similar. I used the data from other dating sites such as match.com and copied the style of their adverts, focusing more on the casual gay man rather than serious relationships.Since then I’ve had an increase of almost 15% in my web-traffic and I’ve gotten a few dates out of it too!