What is competitor analysis in digital marketing?

competitor analysis is a crucial step that helps businesses clearly understand the market and customer behavior in the digital marketing environment. Many SMEs in Vietnam are still implementing this method incorrectly, leading to a waste of advertising budget.

According to We Are Social 2026 Vietnam, over 72% of internet users are influenced by advertising content before making a purchase decision. according to Statista 2026 report, global digital advertising spending continues to increase by more than 10% per year. This shows that understanding competitors has become mandatory.

This article helps you correctly understand the nature, avoid mistakes, and build a more effective competitor analysis process in business reality.

The concept of competitor analysis

Competitor analysis is the process of collecting and analyzing data about competitors to understand their marketing strategies, distribution channels, and customer behavior. This is not just about watching advertisements but analyzing the entire business ecosystem.

A practical standard is that businesses should monitor a minimum of 3–5 direct competitors in the same segment. According to DPS. MEDIA's experience, many SMEs fail because they only look at advertisements while ignoring SEO data and customer behavior.

For example, a cosmetics store in District 3 only analyzed their competitors' Facebook Ads and ignored Google Search. The result was a loss of 40% organic traffic. Conversely, after applying multi-channel analysis, they increased conversions by 65%.

• Cross-platform advertising analysis to understand the competitor's overall strategy
• Track SEO keywords to identify sustainable traffic sources
• Observe social media content to understand user behavior
• Analyze the landing page to evaluate conversion optimization
• Compare prices and offers to determine market positioning
• Evaluating marketing funnels to understand the customer journey
• Follow remarketing to see the customer retention strategy

Distinguishing between competitor analysis and market research

Competitor analysis focuses on specific businesses, while market research analyzes the entire industry. This is a common mistake that causes businesses to confuse strategies.

An F&B business in Ho Chi Minh City once only did market research without analyzing direct competitors. They lost 6 months and a 200 million advertising budget but did not grow revenue.

After switching to proper competitor analysis, they increased online orders by 321% in just 2 months.

• Market research: focusing on industry-wide trends
• Competitor analysis: focusing on the behavior of each specific business
• Market: macro data, few details
• Competitors: specific, actionable strategic data
• Market: used for long-term orientation
• Competitor: used for short-term campaign optimization

7 mistakes when analyzing competitors

competitor analysis is often skewed due to a lack of standard methods within businesses. This is the reason why many digital marketing campaigns fail despite having large budgets.

According to DPS MEDIA's experience, more than 60% of SMEs in Vietnam are making at least 3 mistakes during the competitor analysis process.

A real estate business in Binh Thanh once lost 500 million because they only copied competitor ads without analyzing the funnel. After adjusting, they reduced 45% cost per lead.

• Only looking at surface-level advertising without deep data analysis
• Copying competitor strategies without understanding the logic
• Skip the customer journey
• No SEO analysis and organic traffic
• Measuring marketing KPIs incorrectly
• No multi-channel data integration
• No periodic data updates

Only looking at the advertising surface

This is the most common mistake in competitor analysis. Businesses only look at Facebook or Google ads without understanding the strategy behind them.

The correct threshold is to analyze at least 3 levels: creative, funnel, and conversion. If you only look at the ads, you only understand 20% of the strategy.

For example in the education industry, an IELTS center in Hanoi just copied a competitor's video ads. They lost 3 months and saw a 25% decrease in ROI. After analyzing the funnel, ROI increased by 70%.

For example, in the logistics industry, an SME company only looked at Google Ads. After adjustments, they increased quality leads by 40%.

• Always analyze the funnel before evaluating ads
• Do not judge based on a single creative
• Check the included landing page
• Compare actual conversion data
• Follow remarketing strategy

Copy competitor strategies

Copying a competitor is a dangerous mistake because each business has a different customer base. You cannot apply the same strategy.

The correct threshold is to only learn insights, not copy execution. This helps maintain a long-term competitive advantage.

For example in the fashion industry, an online shop copied a competitor's entire campaign and decreased revenue by 30%. After switching to their own strategy, they increased conversion by 55%.

For example in the SaaS industry, a startup copied a pricing model and took 6 months to readjust it.

• Analyze insights instead of copying content
• Tailor to your specific target audience
• Do not copy pricing structure
• Test user behavior before applying
• Building a unique USP

Why do businesses often get competitor analysis wrong?

competitor analysis is often wrong due to a lack of system and strategic thinking. Many businesses only act based on intuition.

This leads to biased marketing decisions and wasted budget.

An electronics retail company in Da Nang lost 300 million due to a lack of standard data. After standardization, they increased revenue by 28%.

• Lack of sufficient data from multiple sources
• No standardized analysis process
• Short-term thinking instead of long-term strategy
• No specialized marketing team
• Do not use support tools

Lack of tools and data

Small businesses often lack specialized digital marketing tools. This leads to missing and inaccurate data.

The correct threshold requires at least 2–3 analytical tools for a comprehensive perspective.

For example in the furniture industry, a store not using an SEO tool and losing 50% of organic traffic.

For example in the tourism industry, businesses lacking social listening data lead to wrong campaigns.

• Use Ahrefs or Semrush for SEO
• Use Meta Ads Library to analyze ads
• Track traffic with SimilarWeb
• Integrating CRM data
• User behavior analysis

Standard competitive analysis process

standardized competitor analysis helps businesses build more accurate marketing strategies and reduce risks.

This process requires data, tools, and systems thinking.

A SaaS business in Ho Chi Minh City that correctly applied the process increased MRR by 80% in 4 months.

• Identify accurate competitor groups
• Multi-channel data collection
• Marketing strategy analysis
• Customer funnel evaluation
• Extract actionable insights

Identify the correct competitor group

Misidentifying competitors leads to biased analysis. It is necessary to clearly classify direct and indirect competitors.

The correct threshold is to choose a minimum of 3 direct and 2 indirect competitors.

For example in the education sector, a center chose the wrong competitor and reduced effectiveness by 40%.

Ví dụ ngành thương mại điện tử, chọn đúng đối thủ giúp tăng 35% conversion.

• Direct competitor classification
• Indirect competitor classification
• Market share assessment
• Identify target customers
• Positioning comparison

Tools and KPIs in competitor analysis

competitor analysis needs clear tools and KPIs to ensure accuracy.

Lacking KPIs makes businesses unable to measure efficiency.

A retail company increased performance by 50% after applying standard KPIs.

• Organic and paid traffic
• Conversion rate
• Cost per lead
• ROAS
• Keyword ranking

Popular digital marketing tools

Tools that help businesses gain a deeper understanding of competitors and the market.

The correct threshold is a combination of at least 3 different tools.

For example in the fashion industry, using the right tool helps increase ads efficiency by 60%.

For example in the B2B industry, CRM helps optimize 45% pipeline.

• Ahrefs for SEO
• Semrush for overall analysis
• Meta Ads Library
• Google Analytics
• Hotjar

Key KPIs to track

KPIs help measure the effectiveness of competitor analysis.

The correct threshold is tracking KPIs by week or month.

For example in the education industry, tracking KPIs helps increase leads by 30%.

For example in the F&B industry, KPIs help reduce ad costs by 20%.

• Ad CTR
• Conversion rate
• CPA
• ROAS
• Tỷ lệ giữ chân

Conclusion

competitor analysis is not just about seeing what competitors do but about deeply understanding strategy and customer behavior to optimize marketing more effectively.

Businesses need to avoid 7 common mistakes to not waste budget and time.

• Don't just look at surface advertising
• Do not copy strategies
• Full funnel analysis
• Measuring KPI accurately
• Use multi-channel data
• Continuously updated
• Use the right tool

According to DPS. MEDIA's experience, businesses that correctly apply competitor analysis can increase marketing performance by 30% to 80% within 3–6 months. If you want to build a methodical competitor analysis system, DPS.

MEDIA là đối tác đồng hành giúp SME Việt Nam tối ưu tăng trưởng bền vững.

With services comprehensive digital marketing services, businesses can implement competitor analysis, SEO, and synchronized advertising to achieve higher efficiency.