When Everyone is Using the Same Algorithm, What Happens to Competition?

In the future, the company with the best algorithm will win.

But in some cases, it seems likely that we will all be working with the same algorithm. When that happens, it is unclear who wins. Do we all win? Do we all lose? How can competition exist in an arena where every company is using the same algorithm?

This was a question of some debate at a recent meeting of marketing professionals in New York City. The discussion revolved around the growing role of AI and machine learning algorithms in advertising.

The truth is, a lot of advertising exists on one of only a few large platforms. Consider the fact that 2019 is the year where more than 50% of all ad spend will occur online vs offline. And consider that Google and Facebook control nearly all of the online advertising market.

Each of those companies, along with Amazon, Bing and a large number of smaller platforms, is working on algorithms that better serve the right ads to the right people at the right time. They are doing this because the future of their business relies on advertisers successfully reaching customers and driving sales. And a better algorithm, it’s thought, will be more adept at fulfilling that promise.

But at some point, we must consider that all of the advertisers on Google are running ads on the same platform, and that platform is running the same algorithm (or set of algorithms) to determine when and where to show different ads.

Here are four potential outcomes when this happens:

1) The companies with more/better data will win out over the companies with less/poorer data

When we are all using the same algorithm, the data that we are able to feed into it might determine who succeeds and who does not. Those companies who have the ability to store massive amounts of clean data, data that feeds back into the platform (whether it’s Google or anywhere else), will be better positioned to take advantage of the algorithms of the future. With more data, the algorithm will work more effectively for that company than it may for another.

In this scenario, the real level on which companies are competing is on data.

2) The marketplace will determine winners and losers

This is potentially a dangerous, anti-competitive scenario. But one we must consider. Google and Facebook already have incredible amounts of power. And if they can use their algorithms – intentionally or otherwise – to control what companies succeed in reaching new customers and what companies do not, be careful.

I don’t think any of us wants this kind of a future. Google and Facebook will tell us the same thing. But who is preventing it?

3) Branding will become more important than ever

When there is no real competitive advantage on targeted digital advertising, companies will need to rely on other areas to compete. Brands are one possible area of competition.

While brand loyalty has been trending downwards for some time, it may be that effective branding is going to see renewed importance over time. And that’s because consumers who seek out certain brands will bypass, in a sense, what the algorithms are doing.

4) Pricing will become more important than ever

This one requires very little explanation, because it is similar to #3. And while it might sound like good news for consumers (more companies competing on price and lower prices in the marketplace overall), it spells trouble in the long run.

A price war – with each company trying to lower prices to out-offer competitors – could precipitate a race to the bottom on quality and service. It could also mean that giant companies, like Amazon, undercut competitors to the point that they become near-monopolies.

This scenario is not great of competition either.

The Possibilities Are Endless

These are only four potential scenarios. They all might come true. Or none will come true. There are thousands of other ways this could work itself out.

But if you are responsible for advertising your business, or growing your business in any way, you have to start thinking about the future of competition. Because it may not look like competition today.

What Happens When Amazon or Facebook Comes After Your Business?

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It can be scary at times looking over your shoulder at a larger company that seems to have the intention of swallowing you whole. There are sharks in the tank that are gobbling up the rest of the fish, growing ever larger, taking over new terrain, all in the hopes of being the biggest and most powerful.

These sharks have names. They are called Google, and Amazon, and Facebook, and to a lesser extent Apple and Microsoft. They are tech giants, born to do one thing, grow.

They cross different industries and seem each to have economy-dominating aspirations at times.

And so you, with your little business, which is quite successful now, is constantly at risk of being pushed aside by one of these giants. Should they decide to enter your market and compete for your customers, what should you do?

1. Don’t Panic

I know they’re big and scary and as soon as they announce a new product or service it makes waves. But you are not in trouble just yet. The worst thing you can do – for your business and your health – is overreact and do something that doesn’t make sense. The best thing for you and your team to do is be patient. It’s business as usual until you have a clearly defined strategy for how to proceed.

2. Do Your Research

Get to the bottom of the threat. Make sure it is a threat. In the initial hype or announcement, a lot can get lost in translation. Do your best to look under the hood and find out exactly what you will be up against. It is only by knowing the details about their plans that you can develop your response.

3. Determine How You Win

There is a reason why you have been successful to this point. You are doing something right. Do you know what that is?

Your unique value proposition is the reason why customers do business with you in the first place. One of the sharks might go after your business, but they might not understand the real reason your customers chose you. So identify what you do well, and focus all your energies there.

4. Focus on Making Customers Happy

Your existing customers are your best defense against any impending threat. So long as they are happy, you won’t lose them. And with a customer base, you have an attentive audience and an army of potential sellers.

Continue to put your efforts into delivering on your promises and turn your customers into advocates on your behalf.

5. Consider Reaching Out

Often, when one of these tech giants first enters a new market, they may be looking for an easy win. And that might mean they are looking for existing companies to buy out.

Maybe you have no interest in selling. But then again, maybe you do. And if that’s the case, it never hurts to get in touch via a lawyer or experience sales agent.

How to Compete


You are likely to find that most businesspeople are competitive. Especially in marketing, people want to win.

Business has always been competitive. That’s one of the expectations of a free market system. Businesses compete with one another for customers.

And despite most typical assumptions, there are a number of different ways to compete. Most people only really think about two ways to compete:

  1. Quality
  2. Price

But there are many more, often obvious, ways to compete. So let’s review those here.

Compete on Quality

Everyone knows you can compete on quality. If you have a better product or service than your nearest competitor, you are likely to take market share from them.

Choosing to compete on quality means three things. First, you believe that you can consistently outperform when it comes to the quality of your product or service. If you didn’t, you would find another way to compete.

Second, it means that you believe there is a demonstrated desire by consumers for this higher quality. And third, you believe in your ability to communicate your higher quality to those consumers.

The key is, if you compete on quality, you must always be one step ahead of your competitors, those that already exist and any potential newcomers.

Compete on Price

There are always companies in every industry that will compete on price. It is the oldest form of competition. If I think that I can offer the same thing that you offer, but for a lower price, I will. I know that all other things equal, the lower price will always win.

But as successful as many companies have been focusing on price, this form of competition comes with high risk. Why?

What happens if your competitor lowers their price? What happens if a new competitor figures out a way to market an even lower price? Price wars are never fun and often lead companies out of the market entirely.

If you decide to compete on price, you must make sure that you can always offer a lower price than your competition.

Compete on Audience

To compete on audience means that your target market is going to be different in some way from that of your competitors. Perhaps you have recognized that there is an under-represented part of the market, one that is not currently being addressed by your nearest competitor. Or perhaps there is an alternate use for your product that you think will appeal to a new group of consumers.

Competing on audience requires you to focus your efforts, designing your marketing and product for a specific subset of the larger market. If you can serve them better than your competitor, you might either steal market share or create a new slice of the pie that is yours and yours alone.

Compete on Brand

Branding is a way to establish your company in the market – a way of connecting with customers beyond just your products or prices. Large companies love to compete on brand, and we’re seeing it more and more for well-funded startups.

Competing on brand is an attempt to register your company’s name in the mind of prospective customers, so that when they have a specific need, they think of you. If you are successful, it can lead to success even when your price isn’t the lowest, or your quality isn’t the best.

The problem is that this strategy is often very expensive, and only rarely does it succeed. If you can’t compete on one or more of the other options listed here, attempting to out-brand your competition is incredibly risky.

Compete on Service

Sometimes people just want to do business with a company that is going to treat them well. When your price is not the best, and when the quality of your product is not discernibly better than your competition, you can compete on service.

Companies that compete on service focus on being a pleasure to do business with. This means they make it easier to get support, going out of their way to make their customers’ lives simpler.

Companies that successfully compete on service have grown in recent years, focusing on customer loyalty through a more personal touch.

Compete on Location

We often think of competition on a national, or global scale. But companies can and do compete locally. And you don’t have to have a physical presence to do so.

Using any of the above criteria, you can focus your efforts in one market or another that gives you the best chance to win. This is just like an alternative version of the Compete on Audience concept, except that in this case the distinct criteria about your target market is where they live or work.


To sum it all up, it is important that marketers and business managers of all stripes are aware of the many different ways to compete and succeed in the marketplace. You don’t always have to be the best, or the cheapest, to win business. Your company can succeed if you know what you do well, and focus on making that your competitive advantage.

7 Ways to Make Your Business More Competitive Today


The following is a guest post from Dana Mia Kim. Dana Mia is a former business consultant turned an online marketer. She has worked with several industries such retail, hospitality and fitness companies which helped her to gain knowledge and experience in these fields.

With so many businesses operating in the market, it can be challenging to keep up and stand out from the crowd with your own identity. It seems that the top players in your industry aren’t moving from their spot, while newer and more streamlined businesses are entering the market at alarming rates. The more players there are in your industry, the harder it is for you to get noticed among the noise.

This doesn't mean that stepping out of the shadows and into the spotlight is impossible. Difficult, yes, but not impossible. Here are seven ways you can stay ahead of your competition and keep yourself running in the race:

1. Learn from Your Competitors

Business owners all agree that competition is hard to deal with, mainly because it means that a percentage of their market is not paying attention to them, and that are potential sales lost. That’s why companies try hard to be a step above their rivals – to gather as much of their niche under their wing. But the best business owners know that their competition is not a threat, but an opportunity.

Competition can help you challenge yourself to work harder and smarter with what you have. Innovation stems from understanding what it is that’s standing in the way of further growth and using that knowledge to become better. Co-founder and CTO of HubSpot, Darmesh Shah, mentions that the biggest competition of any business is itself, and that losing the will to fight is what makes most startups fail.

So, observe what your competition is doing, and learn from it. Their mistakes and their successes can be lessons to you as well if you know how to leverage the situation.

2. Provide High-Quality Customer Service

A significant factor that plays in whether a consumer will further transact with a business is how well the company received them and how expertly were they helped in solving their concerns. Almost 75% of customers state that a company’s competence is best shown through the quality of their customer service.

Your customers value the experience they had with your business as much as they appreciate the product or service they are availing. By making them feel like they are valuable members of your customer base through excellent customer service, you are taking care of their loyalty towards your business and ensuring that they will keep listening to you first.

3. Own Up and Take Responsibility for Your Mistakes

Pride can be one of the strongest factors for you not only losing customers, but also failing in the race that is staying relevant in your market. Negative experiences with businesses that put their pride above the satisfaction of their customers not only turn them away, but also spreads fast from customer to customer, especially now that social media usage is prolific.

When you commit a mistake and it makes your customer base unhappy, own up to it and take steps to correct them. This will not only let you preserve the good name you have within your niche, but also help you see where you can improve regarding processes and quality. For example, if you are an online clothing store that mistakenly sent the wrong item to a buyer, apologize, offer to replace the product, and maybe even throw in an extra product or service to compensate for the trouble.

If the problem was not your fault, you might be required to go out of your way to make sure that the complaint is still resolved regardless.

4. Never Lie to Your Customers

Honesty and transparency are crucial in businesses, as it gives their audience a sense of security on what they are signing up for if they enter into a transaction with you. It also saves you the potential trouble of having to cover up lies with more lies just to keep up the farce you've set up to "keep your customers happy." And when you're caught lying, it will only damage your reputation.

Contrary to popular belief, sharing bad news will not turn away your customers, so long as you're also showing that you're taking measures to fix these incidents. It prevents them hoping for a product or service, only to become disappointed when they find out that you haven't been honest with the actual status of their transactions. Most customers will understand unforeseen circumstances like delays and internal problems if you are open to them about it and are not adding fuel to the fire.

5. Embrace Technology and the Digital Stream

Technological advancements in this age are making it easier and easier for organizations to reach their goals. If you aren’t making the most out of it, you’re seriously losing out on great opportunities to let your business grow. For example, social media platforms have allowed businesses to take advantage of the chance to connect with the majority of their market through advertising tools, such as Facebook Advertising, Twitter for Business, and Instagram Business Tools. AI and bots are also starting to change the game for businesses and marketers around the world.

Some digital marketing tactics can also work strongly in your favor when you've managed to do them right. If you have a website or eCommerce platform, you can help yourself become more visible by using SEO (search engine optimization) to become a more relevant and priority result for people looking for products and services you are offering. You can also use content marketing to further establish yourself as someone with all the right answers by providing helpful guides, insightful tips, and recommendations based on what problems your niche has.

6. Find Your Competitive Edge

One of the most common ways to stand out from the crowd that’s vying for your market’s attention is by showcasing that you’re something different, something new, to them. Find a unique idea that has never been done before by your competitors and make that your competitive edge. Whether it’s the kind of atmosphere that you are offering your customers, ease of access, advocacy, or any other ways to differentiate yourself from the competition, you’ll want to have something that is uniquely correlated to you.

Inc.com gives three ways on finding your competitive edge: defining your guaranteed home-run customer, describing the problem you fix perfectly for this ideal customer, and declaring your market. These steps are all focused on not being “better” than your competitors, but becoming the only answer that your customers will have for their problems — building a customer-driven statement that will set you apart from the rest.

7. Cultivate a Positive Culture in Your Business

As MarketingDonut puts it: “Skilled, motivated staff underpin vibrant, growing businesses.” You can have the best products in the world that will solve all of your customers’ concerns, but if you aren’t taking care of the people working for you, it will reflect in their working behavior and will trickle down to the quality of their work and the way they treat your customers.

Making sure your staff are cared for in your business doesn’t just mean competitive wages — it means empowering them to contribute to the business, furthering their potential, providing them with a good work environment, highlighting a structured career development, and giving them their due for all their hard work. Better working conditions can lead to success for the business and better employee loyalty, retention, and engagement!

Standing out from the rest and being noticed by your niche is no easy task, and it gets more and more difficult as time passes. But it is doable, especially when you follow the steps we’ve shown.

Ethical Questions for Marketers – Part 4

Welcome to the newest installment of our weekly blog series, Ethical Questions for Marketers. Each week we plan to introduce a new topic and explore it in detail, preparing marketers for the day when they face such a problem at their organization.

Last week’s topic was Price Wars.

This week’s topic: Competitor Spying

As a marketer, you always want to be aware of what your competitors are doing. Your goal is to stay one step ahead of them as you compete for eyeballs, attention, and dollars.

Most companies have someone on the team, or a third-party service they pay to keep an eye on the competition – to report on pricing and offers, changes in positioning, advertising, etc.

The question today relates to how far that kind of competitive analysis should go. Some companies will secretly shop their competition, learning everything they can about the customer experience, asking questions, completing purchases, using the product. This is an extremely helpful way of gaining valuable information you can only get by interacting with the company.

If I asked you whether or not it was okay for your company to engage in this kind of behavior, you’d likely say that it was. But if I asked you how you’d feel if your competitor was doing this to you, you might flinch.

There are some companies that might feel pressured to take this another step further. You might make an offer to buy, or merge with, or engage in a joint venture with your competitor in order to get them to reveal detailed strategic and financial information. When done in good faith this is fine. If it’s just a ploy to gather information, not so much.

So the question is, how much spying is acceptable? The best way to determine the ethical limits for your company is to think about what you would want your competitors doing to you. At the point you would be uncomfortable with their activity, draw a line for your own company.

Stay tuned next week for another installment of our Ethical Questions for Marketers series. If you have an ethical topic you’d like to see addressed, write us.