I was checking out www.keywordcompetitor.com and they claim they can tell you what keywords your competitors are using in their PPC campaigns and organic listings. They can also monitor every move your PPC competitor makes.
How can they get this information? Say I have an AdWords ad running. I assume only Google knows what keywords I am targetting.
It seems if I want to get this information about the competition, I would have a list of thousands of related keywords and do a Google search for each word and see if their ads come up? A primitive brute force method. Actually first I also have to find out who my competitors are.
I've used KeywordSpy.com with good success.
I would think that there is some key word association with a market. Each word has natural listings and natural advertising occuring in google. So a compare of key words should give you something just on that. Also seeing who links to whom gives a networking that creates a relationship between different sites and can give an idea of what market a site is in.
I see your point though it would not be easy. Once you have the key words though some software should be able to run a series of queries and get an idea of who is buying key words on what.
Someone asked a similar question How do AdWords spy services work? where I added a few links and examples on how they normally work, sadly not as sophisticated as most people would think/hope.
The answer (to how do they know) is they don't it is a guess, often quite a sophisticated guess, but the accuracy will be dependent on the size of their database and how many methods they have to poll the data.
The problem for these types of services, is they need to poll the data from lot's of different locations, for example if I run a PPC campaign here in the UK for UK audience and Ad Spy or similar does not have a dedicated presence then it's unlikely to know the campaign was run. As more and more advertisers become reliant on using demographical data the accuracy of the data will drop off even if they do have the geographical presence.
These services are often very handy for seeing a rough overview of your competitors but treat the figures produced with a pinch of salt.