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For me, marketplace or situation analysis is a key part of creating a digital marketing strategy. We've included it as the starting point in our RACE digital strategy planning framework - it includes these key areas for defining the future opportunity or potential for digital marketing for which I've added examples at the end of this post.
But some, maybe many, would ask "what's the point of situation analysis? We don't have time, why don't we just get on with our search, social and email marketing to hit our sales targets".
The problem with this, is that if you're always operating in "campaign execution mode", you don't really know what's possible from digital marketing; you're "shooting in the dark".
For us, taking time out regularly for situation analysis is essential since it allows you to be realistic about what you can achieve from online marketing and prioritise to get the biggest uplift from your efforts.
I remember one Ecommerce Director I talked to saying it's benefit is allows you to "Size and Seize the Prize!" But it's not just the size it's about identifying all manner of strategic opportunities or current inefficiencies which are missed if you're sweating the tactical.
I'm sure you would agree that the growth of the Internet has vastly increased competition for acquiring new customers for most businesses. As Google explained in it's Zero Moment of Truth (ZMOT) whitepapers it's now natural for consumers to turn straight to a search engine to review competitors or check out reviews on comparison sites or in social media to help select the best product or supplier for them.
Marketplace analysis can help you compete by becoming more customer-centred in your online marketing since it will show you:
In modern marketing, it's essential that situation analysis aims to summarise an organisations online marketplace and its own performance to help devise or refine a digital marketing strategy.
In my books I summarise different areas to review as part of broader marketplace analysis using this classic view:
Marketplace analysis should always start with your online audience and involves review of these 4 main areas, asking these questions and analysing the dynamics of the interactions between:
You can see we have separated out potential and actual audience since it's worthwhile doing a "gap analysis" to see who your actual audience or customers are against potential audience and then take steps to build your audience.
I often find that students working on assignments for marketing diplomas don't start with these four key areas, but instead focus on the macro "PEST" factors since textbooks seem to overemphasise them. Always start with the customer!
After you have reviewed the broader marketplace, it should also include a review of your current capabilities. Benchmarking your capabilities to deliver
For an in-depth situation analysis, each of the different players in the environment should be reviewed in detail. For a briefer review, a marketplace SWOT analysis can be produced to summarise the actions
1. A Marketplace map summarises the main audience types, competitors for traffic and traffic flows between them.
The search section works best if it includes specific types of customer searches. As in this example for the mobile phone marketplace in India.
I recently saw this marketplace mapping visualisation presented by Rich Kirk at Brighton SEO which I love since it overlays different types of touchpoint point on the customer journey against Paid Owned and Earned media (definition).
2. Customer and audience analysis including target customer segments, keyphrase demand-gap analysis. These can inform conversion or budget models as part of goal setting.
3. Online competitor benchmarking study of customer experience and site effectiveness.
4. Company capability review including governance and structure of digital media in a larger organisation.
5. A digital marketing-specific SWOT summarising the main issues to prioritise on once the analysis has been completed.
Examples of marketplace analysis and word and powerpoint templates to help perform a marketplace analysis are available for Expert members in our online strategy toolkit.
By Dave Chaffey
Dave is CEO and co-founder of Smart Insights. He is editor of the 100 templates, ebooks and courses in the digital marketing resource library created by our team of 25+ Digital Marketing experts. Our resources used by our Expert members in more than 80 countries to Map, Plan and Manage their digital marketing. For my full profile, or to connect on LinkedIn or other social networks, see the About Dave Chaffey profile page on Smart Insights. Dave is author of 5 bestselling books on digital marketing including Emarketing Excellence and Digital Marketing: Strategy, Implementation and Practice. In 2004 he was recognised by the Chartered Institute of Marketing as one of 50 marketing ‘gurus’ worldwide who have helped shape the future of marketing.
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