Competitive Espionage!! Help!!

Okay, so I've been taking the Traffic Blackbook course and one of the things that the course explains is how to do proper competitive research. One of the things that bothered me though is it really didn't dive deep into how to do proper competitive intelligence analysis of your competitor's advertising strategies and instead basically informally was trying to sale Mike Colella's Adbeat software services. Although the tool is very very robust and seems really cool, some of us do not have $200 to shell out each month for that type of service.

Furthermore, tools and services come and go and change over the years, and in my opinion, I think relying on tools to do the work for you is not a good long term strategy when it comes to this stuff. So getting to my question.

How do you do proper competitive intelligence research? How do you find out what advertising strategy is going to be best for your business? How do you find out what type of advertising strategies your competitors are using so you can get an idea what type of advertising would work for you with the exception of relying heavily on "tools"? Do you find out through your competitor's demographics?

These are the type of questions that have been going through my head the past few days and wonder what has your experience been when it came to doing this. Thanks in advance for any advice.