Criteria for Competition Analysis – Part 1

I have been receiving a few emails, asking me about the rating algorithm that our keyword tool uses to determine when competition is high, low, average, etc…
While I’m not going to disclose the exact algorithm we are using on the software, I think that it’s important to have an open communication with readers and customers, and let them know our thinking on the criterias that we used to build our software.

So this post will be the first of a series that we will be doing on the subject. Let’s start on how we weight the page rank of the competing websites.

What is Pagerank ?

There’s is a lot of literature written on page rank, but let’s say that is basically an algorithm, orignally developed by the Stanford University, whose license has been bought by Google. This algorithm assigns a numerical value to each node of a network, based on the number of incoming links, and the pagerank of the nodes where those links come from.
Yes, I know, it’s sort of a recursive algorithm.
I’m not going to bore you with the details. You can read more here.

The important thing is that if you want to rank for a keyword, then the lower the PR of the competing sites is, the better for you.
For instance, if you want to rank for a keyword, and the top 3 results all have a PR of 5 or greater, AT FIRST that is worse than if the top 3 sites all have PR of 1.

What do I mean by AT FIRST ?
Well, PR can not be evaluated as an isolated metric.
Let’s see an example. Let’s say that your keyword is somewhat “long”. I will be using an extremely long one, like:
my blue elephant has been growing too fast and now all his socks are too small for him
If you type that search string in Google, and you do it like most of the people usually do, that is without quotes, you are going to get results. Probably a lot of them. This is because since you are not forcing Google to search for the exact keyword (by not using quotes), the big G is returning partial matches.

In this type of scenario, the PR of the top results is totally irrelevant. I can assure you that if you create a page targetting thekeyword, you will rank number 1 for the keyword as soon as you get indexed, with no backlinking at all.

On the other hand, you could be searching for a keyword, with the top search results having low page rank, but have tens or even hundreds of extra results targetting the same keyword, and well optimized for it.

Believe me, the first situation is far more desirable that the second one.


The “Close” Results Warning

One important thing that you should be aware of, is to not overstrech this concept. Pagerank is still important. One situation that should be taken into consideration is the “close results” effect.
Let’s say you want to rank for “make money on-line” (good luck with that), and you realized that even when the top results do have high PR, they do not have exact matches on the title.
Maybe you find that the first results have “make money online” (without the “-”) in their titles.

Please, don’t think that you can take advantage of that. Google knows better than that.
So if you are getting results with minor differences from the one you typed in, take a look at the other ranking factors. Assume that the internal optimization is well done. That will be a good situation to look at the pagerank of your competition.



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