Once you’ve brainstormed your list of niche topics, it’s time to narrow down your list to a handful of niches that have the highest potential for success. This leads to a question that’s often asked by new internet marketers: if I enter market X, am I going to lose my shirt?
While there’s no formula for calculating if a market has room for new competitors, a slew of “tools” claim they can give x-ray vision of a market. And their sales letters always make outrageous claims of how easy it is to enter a market – if you just spend a few bucks to buy their latest and greatest gadget.
The fact is there’s no way of knowing for sure if a market will be profitable for you – because profitability depends on how well you research and execute your marketing plan, and how you respond to a competitive environment that’s always changing.
Depressed yet? Wait!
Even though you can’t know in advance if a market will be profitable, there are questions you can ask yourself to identify the niches that are worth testing.
In this post I’m going to share some of the criteria I use to gauge the potential of a market.
1. Does the market have a stable number of searches?
Niches vary in the amount of search engine traffic they get. Some niches are seasonal, or see a huge spike in searches around a single day (e.g. flowers around Valentine day). Other niches are very steady, with a continuous flow of searches year-round, year-after year.
While some affiliate marketers make a lot of money ramping up their campaigns around days like Halloween or Valentine day, information and small business marketers want to get into niches that will provide a steady stream of traffic every week of the year. So how do you find out which niches provide this kind of traffic?
Google Trends is an excellent tool for seeing how a niche’s traffic has performed in the past. This (free) service lets you see the highs and lows of traffic for particular search terms.
When researching new niches, I look for topics that have shown steady traffic for the past five years (which is how far back Google’s data seems to go). If a search term has shown a steady line over that amount of time, it’s probably going to maintain the same level of search volume into the future.
Compare the search terms “acne” (a skin problem) and “Crocs” (a brand of shoes). “Acne” is solid as a rock…
…whereas “Crocs” had its peak in 2007, and seems to have levelled off in the past year (any Crocs affiliates out there?)
2. Are there lots of keyword searches that imply intent to solve a problem?
One of the biggest challenges of keyword research is figuring out the “intent” behind the search. If a person types “mp3 player” into Google, are they looking for information on what an MP3 player is? Or are they at the second stage of the keyword buying cycle – the stage where a person researches available brands and prices? Or are they at the third stage, where they’re ready to buy?
Without qualifiers around that key phrase, it’s hard to know the intent behind the search without doing a survey. That’s why key phrases that imply intent to solve a problem are so important. When doing your keyword research, look out for qualifiers like “how to”, “pros and cons”, and “advice” if you’re selling an information product – if your keyword universe is full of those kinds of phrases, you might have a ripe market.
3. How many advertisers are there on Google search?
There are some people who (rightly) say that a large number of advertisers on Google is a good sign – that lots of advertisers show that there’s a lot of money to be made in a market.
If you’re an experienced internet marketer, that might be the case. But you’ll still burn through a lot of money before you find just the right combination of keywords and copy. For newer marketers, fewer advertisers can mean an easier (and less expensive) entry into a new market. As a rule of thumb, fewer than 25 advertisers is a good start.
4. How many advertisers are there on the Google content network?
A lot of marketers don’t bother advertising on Google’s content network (let along the content networks of Yahoo and MSN) because they think it’s a money pit. But the reality is that some niches convert really well on the content networks.
Regardless, the content network can be a great niche indicator – if there are lots of people advertising a particular niche or product, it could be a sign that there’s money to be made. All you would need to do is position your product to fill a gap in the market.
So how do you tell how many niche advertisers are on Google’s content network? By doing a little research on websites that have content network ads in every conceivable niche!
Ezinearticles is one of those websites. Ezinearticles is an online article directory where website owners can get free content in exchange for a link back to the author’s website.
(It’s also a great place for information marketers to post content, and drive targeted traffic to their websites.)
Ezinarticles is also one of the thousands of websites that display ads served by Google. The key here is that Ezinearticles has articles on thousands of topics – and each of those article pages displays Google content ads that are related to the article topic.
To continue the “acne versus Crocs” example, let’s take a look at the number of content network ads on Ezinearticles for the keywords “acne” and “Crocs”.
Crocs has 10 ads…
…while acne has 11 ads.
Does that mean that acne is a better market than Crocs? Not necessarily. But it does indicate that there are a lot of people advertising on Google’s content network in both of these niches. And where there are a lot of competitors, there’s usually a large and hungry market.
5. Can your product/service save or make people money?
Another rule of thumb is that if your product can save or make people money the amount of competition is less important. Think about your own situation – how many information products have you bought to increase your internet marketing knowledge? Think about how you justified yet another purchase in your mind.
The key here is how the “mental accounting” of consumers treats your product. Do they see your product as an investment, or as a cost?
6. How much high-quality free content is there?
If you’re selling an information product, you need to keep in mind how much high-quality free information there is on the first page of Google. If a searcher can quickly find the information that’s in your product on the first page of Google (for free), it might be hard to sell your product.
Then again, you might just need to re-position your product, or stress the benefits of buying your product. Here are some of the benefits of your information product that you can emphasize:
- Convenience (no need to search for hours for the information)
- Organization (all the information is in one place)
- Certainty (“I’ve scoured the internet so you don’t have to!”)
- Authority (“Written by an expert in…”)
- Quality and bias-free (“From a trusted source…”)
- Format (“Available in PDF and MP3 format”)
7. How desperate is the market for a solution?
As successful copywriter Michel Fortin says “without a starving market you’re dead in the water“. A market full of desperate buyers can support MANY more competitors than a market where the desire for a solution is weak. Combine a desperate market with a timeless theme and you’ve got a real winner.
A classic example of this combination is weight loss. In the copywriting masterpiece Breakthrough Advertising, author Eugene Schwartz mentioned the enduring appeal of weight loss products – and Schwartz wrote the book in the 1960s! The world will never be short of people in the market for “reducing” products (as weight loss was called back then).
So there you have it. If you’d like to contribute your own killer market-testing questions, please do so below.