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My firm is a specialty directory and by all the methods I can find to measure traffic relative to my competition--I am aware that kind of data should be viewed with a jaundiced eye--we are the market leader. We should be, we were the first to market, we have a substantial base of both paying customers and site visitors and we know we generate response.
In the last year, we've had a substantial competitor crop up. They are a specialty PPC search engine. I view competition as a healthy thing, it's given us the impetus to better define our products and services and to work harder on web site promotion. I've always been slightly suspicious of some of the numbers that I see (as we are a directory who provides web presence, this company almost immediately became one of our top referrers, since they are targetting the same customers for their PPC), but I strive for the "a rising tide lifts all boats" outlook whenever possible.
Today, a customers sent one of our sales reps data from their own reporting tools that showed than not only did the competition outstrip us in traffic delivered by a large amount, that they delivered more traffic than Google, MSN and AOL combined. This customer runs AdWords, as do we in the same category, and those numbers seem to add up correctly.
This just doesn't pass the smell test for me. I've seen enough of my customers data from search engines to say that this customer's search engine referral looks in line with his competitors. But, I really, really don't think my competitor can be delivering this much traffic to him.
Does that sound possible to you? When we link to customers, we are generally better than the big search engine traffic, if that customer does a reasonable job of SEO (we deliver better qualified buyers is the advantage). If they don't do any we provide virtually all the traffic.
Is it likely that a specialty PPC is going to deliver enough traffic on a reasonably competitive search term to completely outstrip the biggest of the big SEs?
If no, is there anything I can do about it, besides redoubling efforts to teach my customers the meaning of the word ROI?
How much traffic you get from Google etc. depends entirly on how well you are listed. Are we talking big numbers from good listings? If we are then this is highly suspicious.
Although, as Chris says, you seem to have a fair bit of evidence, if I were you I would be looking extremely carefully at what the visitors sent by your competitor do. What are the IP addresses? Do they click through the site like normal visitors, and most importantly, do they convert? This is the crucial question rather than whether the numbers add up, and should tell you if they are up to no good.
For example, I have a speciality directoy that I run a sidebar on with four ppc complementary links. This isn't the actual subject matter, but it is like my site is about "French Restaurants" and i show links for "Italian Restaurants."
Those four links appear on almost every page of my site and generate a fair number of clicks. I would not be surprised if my dinky little directory was a top referrer for some of the four links. In addition, my site is only one among a number of distribution partners for this particular ppc company.