Spyfu: How Keyword Spy Tools “Spy”

Let’s get something straight right from the get-go.

I’m not a fan of Spy Tools, so if you’re looking for someone to tell you that you should use them, then I’m not the guy. I see PPC Spy Tools as a glorified gimmick that sounds good in theory but rarely ever delivers in reality.

It’s just one of those cheeky tricks marketers employ to take the cash of the lazy marketer on a monthly basis. It appeals to people who think that they’re going to cheat and take someone else’s hard work for themselves. I have issues with the creators of these tools from a moral stand-point too. They are promoting that we dirty the Ad space with bullshit copies of ads going to copies of other people’s landing pages. Google has to constantly slap even the legitimate advertisers just to clean up the mess of these people.

Recently, I decided to do some research of my own to find out what it is exactly that Spy tools do to appear like they are giving you the secrets of the top dogs in your pay-per-click market.

I picked up as an example, the SpyFu tool popularly known for many years. There are other examples though, and they operate in a very similar way. Examples include, Keyword Spy, PPC Web Spy, and Google Cash Detective.

Right away, I saw their method involves running a “bot” or a computer program that sits around the net all day running fake searches for different keywords.

Now, you might not be advertising yet on the keyword you want to spy on, but your active ads are still being triggered by these bot-searches. Imagine with all of these different bots from the different Spy Tools all running searches on your keywords and racking up impressions on your ads. Now, let’s assume that they never actually initiate a “click” action on your ads so it won’t cost you any money that way.

However, the act of “searching” racks up impressions on your ads. Impressions that don’t result in clicks…which translates to reduced Click-Thru-Rate. Consider, that Google and other search engines penalise such ads that are displayed often without clicks. Ad position goes down, click cost goes up, and quality score (which is 80% influenced by click-thru-rate) is reduced. Can we say, that this will eventually result in Google Slap for even legitimate advertisers?

Also, when you go to your favourite keyword research tool and look up the popularity of keywords you want to bid on–you’re going to see impressions heavily weighted by these spy tools. Rendering keyword research tools almost useless. Which means you’re likely to choose keywords that APPEAR popular to bid on when really hundreds of searches a day are actually initiated by these Spy Tools in their research phase. Or as they like to call it their “web scrapping” or “crawling” of the internet ad space.

The tools then store this data and keep updating it daily in a database. Which they query when you come to “spy” on someone else’s display domain.

Let’s assume that none of this bothers you. And talk accuracy of the information Spy Tools give you:

Next in my research, I went to the SpyFu documentation and read what they say about how they calculate Daily Ad Budget. This is one of the factors that customers of these spy programs find important. If an advertiser has a large daily ad spend, they’re immediate candidates for Big Boy status. These are the people you’re going to copy, right?

Here’s what SpyFu says about Daily Ad Budget:

When we calculate Daily Ad Budget, we start with all the keywords that we have seen a domain advertise on. We eliminate overlapping keywords. For example, “race cars”, “luxury cars”, and “cars” becomes “cars”. Then, we take into account the current and historical positions that we have seen the domain’s ad appear for each given keyword. Based on the position of each ad, we estimate the price that the domain likely pays for the keyword. Basically, we then add up all the custom individual keyword costs per day and we arrive at the Daily Ad Budget.

Basically what this translates to, is that they are calculating the CPC bid of individual keywords by looking at what position each ad shows up in for a searched keyword. If the position is high and the position is equally high, it would SEEM that the advertiser pays more per click. However, this doesn’t factor their quality score, their account history, or the click-thru-rate of the ad. Which will all influence the position and cost-per-click bid.

Guessing the Broad Match Algorithm

In addition, finding “overlapping” keywords can only be done as a best-guess. No one really knows the algorithm Google uses for broad match keywords. We also know for a fact that both Google and Yahoo decide to show ads especially in broad (or advanced) match based on the PREVIOUS search the user conducts. Which the Spy Tool has no idea of. So Spy Tools will never get you a completely accurate list of the actual keywords people bid on.

Ignoring Long-Tail

Next, you’ll notice that in all Spy tools, you only ever see at most keyphrases of 3 words or less. The reason is that their overlap-finding-algorithm is too restrictive and their data is only useful for high volume keywords. They, instead, lump all longer-tail keywords into a single general term. This means you’ll never get a full picture of what is going on in anyone’s account. For all you know, their money keywords come from 1000’s of low-search long-tail keywords. And you’ll be baffled why the more general term SpyFu gave you stats about doesn’t work.

Flawed Average CPC

Here’s what SpyFu says in their docs about how they calculate average CPC:

If you take the Average Cost per Click of every keyword that a domain advertises on, add them all up, and divide by the total number of keywords, you will have the Avg Cost/Click for a domain. For example, if a domain advertises on 3 keywords with Avg Cost/Clicks of $1, $2, and $3, respectively then the Avg Cost per Click for the domain would be $2.

What a load of crap. This would only work if there are exactly the same number of clicks for all keywords. And we know for a fact that even if you BID the same on your keywords, your click count that Google or Yahoo report is different for each keyword, each Ad Group, and each campaign.

Here’s a table to show SpyFu’s example:

Key Term 1

Key Term 2

Key Term 3

Totals

Avg CPC

1

2

3

Number of Clicks

1

1

1

3 clicks

Total Cost

$1

$2

$3

$6

Looks right. Doesn’t it? Now look at the table with the same numbers they get and we only change the number of clicks received for each key term:

Term 1

Term 2

Term 3

Totals

Avg CPC

1

2

3

Number of Clicks

11

13

20

44 clicks

Total Cost

22

26

60

$108

In this case the average CPC is $108/44 click =Average CPC of $2.45 not $2 as SpyFu’s method would suggest.

What About Region Targeting?

Unless Spy Tools have an international presence (which I’m sure they don’t), they gather all their stats about the web from the locations they are centrally located at. Meaning, if an advertiser gets most of their leads from Australia while the Spy Tool operates out of Arizona, USA it will not be able to tell you that the advertiser is winning a lot of money with their keyword in Australia.

There are many more reasons why Keyword Spy Tools do not give you any kind of accurate results you can use. I think these are sufficient to build a case though, against using them. And for $70 a month, SpyFu’s subscription is NOT cheap. I would rather keep that $70 to get 35 more leads a month! I would rather use that ad budget to actually TEST my own ads and keywords and find out what works best for my business. So should you.

The fact of the matter, though, is that Keyword Spy tools exist and they’re not going away. And despite all my moral issues with them, I occasionally use them to get fresh keyword ideas when I have none. I do not trust any stats given about those keywords or copy the ads I see.

A good PPC advertiser knows that a lot more goes into creating profitable campaigns than just knowing who’s ad shows up the longest and who spends most. The way you group your keywords together is a much more important piece of information to know. And if someone could tell me that, maybe then I’ll pay the subscription willingly. We know that negative keywords play a huge role in the success of a campaign–the keywords that someone’s ad DOESN’T show up for–can someone tell me that? Probably not.

And next time you whip out a Spy Tool, just think–if you had spent $100,000+ dollars to find out what keywords and ads make you money–do you want some nobody advertiser to come along and take your leads over night? I think not.

Much of the material in this post came from this well-thought-out blog post on how to FOOL your competitors who think they’re smart using Spy Tools: http://www.seoptimise.com/blog/2008/09/4-ways-fool-your-competitors-using-spyfu.html

Stay original!


To learn more of Jim’s PPC advertising techniques, check out PPC Domination.

Keyword Research: Shall I Spy On My PPC Competitors?

Keyword Spy Tools are supposed to be able to allow you to plugin in the website of your competitors and then they retrieve for you all the keywords they’re bidding on, along with their corresponding ads, and estimated bids. Sounds pretty useful doesn’t it?

Yet I’m gonna go ahead and tell you NOT to use these tools. I think your money is better spent on your PPC ads.

I’ve had more than a few questions about keyword research tools that claim to help you “spy” on your competition. (Don’t get too excited & click just yet) Examples are Spyfu, Keyword Spy, and most recently, PPC Web Spy.

Brad Callens PPC Web Spy
Brad Callen's "PPC Web Spy"

The tools are supposed to be able to allow you to plug in the address of your competitions’ websites to retrieve all the keywords they’re bidding on in sponsored search. Also included, is usually a copy of the corresponding ads and estimated bids. Sounds pretty useful doesn’t it?

Not really.

I’m gonna tell you NOT to research like this. There are better ways to spend your money (like on your PPC ads). And more effective ways to beat competitors to the top of the search page.

Am I saying this because it’s immoral to spy and steal the campaigns of others? No.

It’s because Spy tools don’t deliver on their claims.

To non-technical folks, computer programmers are like magicians. They create magic with their computer code and do amazing nearly miraculous things. But another programmer looking in from the outside can still see the thin string that pulls cards into the magician’s sleeve. They can see that the magic is nothing but an illusion.

Spy tools are an illusion. A marketing gimmick. There is a market for them because people are lazy. I mean, sure it would be nice to just find a successful affiliate promoting the same offer as us and then steal their campaign for ourselves…right?

Except that Spy tools generally return untargeted keywords that no one in their right mind is bidding on. Their bid estimates are WAY off. And they don’t tell you the REAL secrets of why someone else’s ads are working.

For example, they won’t tell you:

  • How the advertiser organises his/her account.
  • Or the negative keywords they include in their keyword lists.
  • Or the way they group their keywords.
  • Or the way they monetize their clicks.

That’s the real stuff worth paying for. And I’m pretty sure if a tool could tell you all of that, it would cost a lot more than $96 a month.

I buy and test just about every PPC tool you’ve ever come across.

Spy tools work by “guessing” keywords, monitoring which ads show up, and then adding them into a database they do lookups on when you use the tool’s search.

They definitely don’t have a way to go into people’s accounts and steal their keywords. There are keywords left out, quite often the money keywords! Also, there are many keywords returned by the spy tool that don’t actually trigger those ads. The bid estimates are wayyyy off. The click estimates are always wrong.

It’s a big collection of unrelated information, gathered from god knows where, and combined in a way to look authoritative. All of it designed to trick you into believing you’ve seen into the inner workings of your competitors’ ad campaigns. When all you’ve done is fallen for an illusion.

Read the small print on keyword spy tools, you’ll find they have disclaimers reflecting their anticipated unreliability.

PPC Bully
PPC Bully

The only real way to beat up your competition and take their spot in the sponsored results, is to monitor them over time, identify the winners, learn from them, and then do it better.

If you insist on spending your money on a Keyword Spy tool, then save your dollars for this next one:

I am at the moment in the process of testing a tool called PPC Bully. This is different because it’s not framed as a “spy” tool–it simply automates studying the competition before you start spending your own money bidding on an expensive keyword.

A couple of years ago, I got bored of manually checking the competition by hand. So I wrote a very simple program to make my job easier:

The way it worked was, I’d give it a bunch of keywords I was considering bidding on. And at a defined interval throughout the day, this little program would go out and simulate searches on all those keywords. It would then retrieve all the sponsored ads that are returned and log them for me to study later.

Here’s the theory:

An advertiser who is losing money with their ad+keyword+landing page combination is going to do one of two things:

  • They’re gonna be savvy enough to take their ad down, modify it, and try a new combination
  • Or, they’re gonna leave it till Google slides it down in position and probably slaps it to hell so it won’t show up in sponsored ads any more

Either way, the end result, is that over time, the ads that don’t work stop showing.

On the other hand, if you’re looking for advertisers that are probably making money, all you need to do is find the ad+keyword+landing page combinations that show up EVERY time the program simulates the search for those keywords over an extended period of time. That could be a day, a week, or even a month depending on how competitive the keyword is.

PPC Bully tests your competitors like this.

It isn’t my program. Some bright marketers hired programmers and turned the idea into a commercial service.

Now, if you’re thinking about bidding on some expensive keywords, it’s easy to avoid risking your own money. Just run PPC Bully with that keyword and monitor the competition for a week or so. Find the winning combination of keyword+ad+landing page, and then try to do something similar without violating copyrights.

All I know is that out of all the spy tools I’ve seen so far, the $49 investment in PPC Bully is the only one worth exploring.


To learn more of Jim’s PPC advertising techniques, check out PPC Domination.