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Market analysis: reading a market's size, demand and competitors
A market analysis tells you how big a market is, what its buyers ask for, and who already serves them. A useful one ends in decisions: which searches to bid on, which pages to build, which ones to leave alone. This page explains the parts, shows what a finished analysis looks like, and lists common mistakes.
What a market analysis covers
Five questions make up the whole analysis. The first two are about buyers. The last three are about sellers and money.
| Part | The question it answers | What you read |
|---|---|---|
| Market size | How much is there to win? | Buyers, yearly spend, or US monthly searches |
| Market demand | What are buyers asking for? | Searches grouped by need |
| Competitive landscape | Who serves those needs? | The leading competitors and their pages |
| Market gaps | What is asked for and not served? | Searches no competitor has a page for |
| Wasted spend | Where does money chase the wrong audience? | Searches to exclude |
An analysis that answers only one of these misleads. A big market with no gaps is crowded. A gap with no demand is empty. Demand with no way to tell buyers from everyone else burns budget.
Size and demand: how much there is, and who is asking
Market size
Market size is the number of buyers times what each pays in a year. It can be split into three layers. The total addressable market is every buyer who could use what the market sells. The serviceable addressable market is the part you can reach with your offer, in the places you serve. Your share of it is what you can win.
Errors often sit between the first and second layer. A figure that quotes the total and calls it yours is not an analysis. Read market size: what an estimate means for a worked example and the questions to ask of any estimate you are shown.
Market demand
Demand is what buyers are asking for right now, and it can be counted. That count is search demand: the US monthly searches for each need. It is not the same as size. Size is money spent over a year. Demand is a flow of requests.
Say a market has 2,000 buyers who each pay $3,000 a year. Its size is $6 million. Say the same market gets 800 US searches a month for what it sells. The first number is money, and the second is how many people are asking this month. The two can point in different directions, which is why an analysis reads both.
Counts also differ between trades. In the US, lead terms get about 2,900 searches a month for real estate and 1,000 for roofing, and search demand by industry lists 17 trades. Those numbers do not tell you which trade is a better market. They tell you where more people are asking. Read each number with US monthly search volume in mind, and ask what the person behind the search wants to do: buy, compare or learn. What searchers want to do explains the difference.
Competitors and gaps: who serves the demand, and where nobody does
Competitive landscape
A landscape names the leading competitors and shows, for each need, who has a page and who does not. Two kinds of competitors matter. Direct competitors sell the same thing to the same buyer. Indirect competitors solve the same problem another way. The businesses you think of as competitors and the ones your buyers meet are not always the same.
A landscape is useful only when each claim has a link. "Competitor A covers this" means little. "Competitor A covers this, here is the page" can be checked in one click. It also shows where the field is thin: needs that one competitor, or none, has answered. Competitor gap analysis shows how to read that list.
Market gaps
A gap is a need that buyers have and the leading competitors do not answer with a page. A gap is worth a page only when enough people search for it and those people are buyers.
Here is a worked example with round numbers, labelled as one. Say a market has 40 search needs with real demand. Say the leading competitors have a page for 31 of them. The other 9 are gaps. If 3 of the 9 are searches from people who will never buy, 6 are worth a page. The gap list is shorter than the first count, and more honest.
Wasted spend: demand that is not yours
Every market has searches that look relevant and come from people who will never buy. If you run search ads, you pay for those clicks. In one market we counted, freight factoring, 272 of 1,569 searches looked relevant but came from the wrong audience. Together they were about 24,460 of the market's roughly 309,080 US searches a month. The full counts, and what to do about them, are under negative keywords for search ads.
The fix is a list of searches to exclude from your ad account. The analysis is what tells you which ones.
Mistakes people make when reading a market analysis
- Reading size without demand. A market worth billions that nobody searches for cannot be reached by search.
- Reading demand without intent. Searches to learn turn into customers less often than buying searches. A count that mixes them overstates the market.
- Counting one need twice. The same need listed twice makes the market look bigger than it is.
- Treating coverage as proof. A competitor having a page does not mean the page is good, or that the need is worth serving.
- Mixing regions and years. A figure that does not say where and when cannot be compared with another.
- Leaving wrong-audience searches in. They inflate demand and drain budget at the same time.
What to do with a market analysis
Act on each part separately.
- Size: set a ceiling. No budget should be larger than the serviceable part of the market can return.
- Demand: rank needs by US monthly searches and by who is asking.
- Landscape: note where one competitor holds most of the pages. That is where you will have to be better, not just present.
- Gaps: build one page for each gap, starting with the largest.
- Wasted spend: add the wrong-audience searches as negative keywords in your ad account before you raise a budget.
Say a market has about 5,000 US monthly searches you can serve, and 400 of them are wrong-audience. Exclude the 400 first. The budget you set after that buys buyers, not noise.
When someone sells you a market analysis, ask what each number counts and whether each row links to a page you can open. The sample reports show the format once they are checked.
FAQ
What is the difference between a market analysis and market research?
A market analysis reads a market: its size, demand, competitors and gaps. Market research is the wider job of learning about buyers, and can include surveys and interviews. This page covers the first.
How long does a market analysis take?
A Querytally report arrives within 24 hours of your email.
Which numbers should I trust in a market analysis?
The ones with a link behind them. A number you cannot trace to a page is an opinion.
Checked by a person and delivered within 24 hours, with a link and a search number behind every row.