Track Seasonal Trends

By tracking the overall level of competition over time, you can reduce spending in hyper-competitive keyword groups, while capitalizing on less competitive and seasonal ones.

AdGooroo's competitive intensity index tracks the overall level of competition within your keyword groups over a 60-day period in a single, revealing chart. This information, used in conjunction with your company's bid management and analytics tools, will help you to better target your ad budget and gain a better understanding of your industry dynamics.

This competitive intensity chart reveals a state of steadily declining demand. Be cautious when entering a market such as this one.

How It Works

The competitive intensity index is shown as a number ranging from 1 to 1000 and is calculated each day from your keyword groups. When the index is high, a few select competitors are capturing a large percentage of the available impressions. When the index is low, the impressions are scattered among a wider number of smaller advertisers.

The index not only correlates to average bid prices in your keywords, it also reflects the relative sophistication of your competitors. To see why this is true, consider what it takes to gain a large percentage of the available impressions: good keyword selection, high bids, and excellent clickthrough rates. When the index is high, you are facing stiff competition.

Alternately, when the index is low you are facing competitors with poor keyword selection, mixed bids, and average clickthrough rates. In this situation, a well-managed campaign can gain the most return on investment.

The index is more accurate when it is calculated on a keyword group composed of many related keywords. For this reason, you must have at least 25 keywords in your keyword group for the index to be calculated.

The Myth of Increasing Competition

Search engine advertising is littered with myths and half-truths. One of these misconceptions is that the competition (and thus bid prices) within most industry groups are increasing over time. This is false. While bids and competition in some categories continue to climb over time, other groups, such as Florida travel, cycle between periods of high and low bids as vacancy rates change. Other groups, such as the anti-spam software category, suffer permanent and irreversible declines. The seasonal index is very useful for tracking these changes so that you or your clients can better manage your marketing expenses.

The seasonal index will appear automatically in your SEM Insight reports for any groups with more than 25 keywords in them.