a category-level understanding = a certain level of understanding.

The article wants you to know in what categories your competitors are, and what companies Google will list when your customers search for your products. For example, if your product is rainboots for elderly dogs, you should be aware of which competitors will be found with Google using key words like "dog footwear", "pet rain protection", "old dog clothes", etc. You can categorize (group) your competitors to organize your thinking in developing a marketing strategy.