SEO does not take place in a vacuum. For any set of keywords that are worth optimizing for, there are certain to be other businesses in pursuit of a higher ranking for them.

Businesses are also in a constant battle to cultivate a backlink profile that leads to a higher position in the SERPs. SEO can be thought of as an ongoing process of refinement that takes place against a background of competitors who are trying to achieve the same thing.

Developing a keyword glossary and creating content around it is not enough to gain and maintain a decent position relative to other businesses in a niche. You also have to engage in a bit of industrial spying and find out what the other guy is up to, both so you can do the same thing but better, and so that you can find out what he’s not doing that you could be.

Find Out Who Your Competitors Are.

This should be obvious. Most businesses know who their competitors are, right?

Not always.

Here we are talking about competitors for search engine position, which might not be the same as your business competitors. For example, if you’re a potato farmer, who wants to rank well for ““, you’ll notice that your main competitors for search ranking are not other potato farmers, but informational resources like Wikipedia and various recipe sites.

Of course, in the real world, it would be foolish to try to rank for a hugely popular search term like potato unless you have a bottomless pot of money to spend on SEO and link building.

The easiest way to find your competitors is to use your keyword glossary to search and take note of who has the best search position. You can also use Google’s “related:” search operator to discover which sites Google thinks are most closely related to your site.

Site analysis

Once you’ve identified your competitors, it’s time to take a thorough look at their site to see how it compares to yours. If they are ranking better for your desired search terms, there are a huge number of factors that might be the cause of that. We’re not going to go deeply into that here, any decent SEO primer will make it clear what you should be looking for.

But, as we mentioned, this is not an exercise in copying, but in matching and exceeding competitors. Pay attention to what they are doing well and what they are doing poorly, and learn from it. For example, their site may have poor microdata, or it might have poor navigation. Take a particularly close look at their textual content — are they missing any keyword opportunities you could exploit? Is their social media presence stronger than yours? Do they make it easier to share content? Do they have more images and are their image tags in place?

Backlink Analysis

It’s estimated that about 60% of a site’s ranking potential is determined by their backlink profile — the links that they have coming to their site from other sites.

You can use tools like Majestic SEO’s Site Explorer or SEOmoz’s Open Site Explorer, which will both provide a comprehensive display of a site’s incoming links.

This can provide very insightful information about what a business is doing to market themselves online. Pay attention to which domains the links are coming from; it may reveal opportunities for further link building on your part. If your site appears to have better on-site optimization, and is still ranking less well than competitors, it is almost certainly because they have a better link profile. Try to figure out how they managed to build it; perhaps they are sending out press releases or are engaged in guest blogging (if so, there is an opportunity for you to get articles placed on the same blogs.)

Again, be on the lookout for what they are not doing as well as what they are. With a limited SEO budget, it may be better to exploit the gaps in your competitors armor, rather than taking them head on.

Competitor analysis is one of the more intellectually stimulating and enjoyable aspects of SEO. Part detective work and part game of chess, it can give a smart SEO or webmaster the edge over their competition that they need to secure a better position in the SERPs.

What competitor analysis tips and tricks do you use? Let us know in the comments below.