There has been some expensive software made available recently, I may not be evaluating it correctly since I haven’t been hyped into joining the memberships that license it, but basically what they claim to do is allow you to supposedly learn what campaigns should be successful by analyzing ads currently being displayed.
The assumption is that if an advertiser has been running a particular ad for so many days, weeks, or months, it’s successful and profitable.
And if that ad is profitable for that advertiser, you should be able to jump into that market, copy or improve on the ad, and be profitable yourself.
In theory, that could be correct, or not. At least it’s an educated guess based on analysis, that has driven the direct mail market for many years.
There’s a difference in direct mail, though, if you see an ad in USA Today in the sports section, the ad is much more visible and the costs are much more predicatable than if the ad was only being run on Google and viewed if someone typed in a selection of a couple dozen specific keyword phrases.
In other words, it’s easy to copy the ad from USA Today and run it in a publication with similar demographics, it’s not quite so easy to figure out what keywords the AdWords advertiser is targeting, or what his bid price is, or what he’s paying to be profitable because of the differences quality score makes.
Of course assumptions are not always correct. The advertiser could be stupid. The advertiser could have deep pockets and is making money not on this ad, but on backend sales. The ad could be profitable for some keywords and not others, and you’re analyzing the keywords that aren’t profitable. Or any number of other scenarios.
One of our members, Matt Levenhagen, has written an insightful blog post on the subject here, which you should read:
http://blog.campaignblasts.com/competitive-analysis-tools-is-this-the-end-of-adwords-as-we-know-it.htm
One of the software tools which I almost subscribed to when it came out supposedly has a feature that I found particularly offensive. Again, I’m not on the inside, so I’m not sure this is true, but it’s what I understood from reading the sales page and emails. Supposedly if you found a successful ad in your tracking, you could also find other ads that the same affiliate was running in other markets. It seems that the servers built up a history of all the profitable markets that other members found, and would share them.
So if you found that affiliate X was running a profitable campaign (supposedly) on green widgets, and another member found the same affiliate X was running profitable campaigns for lawn chairs and jogging shoes, the system would tell you that. Forget the fact that the other member was paying $100′s of dollars a month to find profitable campaigns, his efforts would be shared with you, and yours with him.
Will these agressive software tools mean there is no longer a level playing field in affiliate marketing? Time will tell. My campaigns haven’t been any less profitable or suffered a slowdown in impressions, so either nobody has found mine yet with this software, or if they did, it didn’t matter.
And even if they did, I’m probably not bright enough to have figured out how to track the super profitable keywords and weed out the unprofitable ones, all I know is that overall I’m running a profit. Ah, when I get it all figured out, I’ll have to start the site someone suggested, 5KaD. 
Three things. First, read Matt’s blog post, it’s good info.  Second, make a comment on this post if I’ve given any incorrect information, if you’re a member of any of these sites that do the competitive analysis. And third: Don’t worry if you aren’t a member. There’s plenty of markets out there for everyone.
Oh, I almost forgot. Fourth: When the most hyped membership site opened up, a brilliant IM’er said he would figure out how to the same thing, given a couple months of analysis and programming that he would outsource. And instead of paying several hundred dollars a month, the software would be available for less than $100, and could be resold. Yes, I prebought the resell rights. And yes, it will become a part of this site once released.
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