How much Money do you Want to Make? It really is up to you. It’s time to qualify those 15-20 ideas you just brainstormed and see what will bring you in the most ROI. As we mentioned, there are specific criteria that make some focused markets more profitable and worthwhile than others; the first of those being DEMAND. You want to answer the important question, “Is there a demand for the products or information within this focused market?”
Determining the Market Demand
When we say demand, basically we mean the amount of interest it generates from potential customers. Its that simple. The more interest sparked, the higher the cost of the product rises, and the higher the profit margin. Remember Tickle Me Elmo? MSRP was roughly $29.99, but many sold for hundreds and even thousands of dollars.
- Are there suppliers for products within this focused market?
- Are the products in this niche profitable enough for your financial goals?
- Are people within this niche willing to spend money?
- Are people within this niche willing to buy products repeatedly?
- Are there new people looking for the products within this niche on a regular basis?
Remember, the higher the demand, the higher your profit margin. The less demand, the shorter the life span of the product and the harder it is to create a profit. Now, just because a product doesn’t have a high level of demand doesn’t mean you cant create a demand for it. We call it “Demand Creation” (fancy, right). Remember, these are your links, so you can sell them anyway you want.
Make Google Work for You
“You should Google it.” A phrase we have all become a little to familiar with. What better way to discover information about a product than using the one site that made product search the most important thing on the web? To find out if a product has a high or low demand rate, we recommend using a tool from Google known as the Google Keyword Tool. Google IS the largest search engine on the planet, so why would you even think of starting somewhere else?
Search terms, who needs them, right? Well, you do. Google tracks how often keywords are searched for every month in their search engine and the Google Keyword Tool allows you to access that data. You’ll see how many people are searching for particular phrases related to your ideas according to Google’s own statistics. While there are a number of different tools like this online, you’ll want to use Google’s because they’re giving you direct access to their own data and their tool offers the most insight into market demand and market value. It will help you optimize and obtain traffic and best of all IT’S FREE!
Rather than re-invent the wheel, if you want some night-time reading, we recommend this article in regards to beginners keyword research. Enjoy! SEOMOZ
[Tip 1: You will want to refer to the search engines Yahoo and Bing, to make sure you cover all your search engine ground.]
To find the Focused Market Demand, follow these steps:
[Tip 2: Click on the “Columns” drop-down menu at the top right corner of the “Keyword Ideas” tab to see additional data for keywords. Select a check box next to the new column(s) you want to add to the existing list of keywords and click “Apply.” For example, adding the “Average CPC (Search)” column will show the average price that other AdWords advertiser are paying to have their ads display for a given keyword.]
- … Click on your own ads.
- … Tell others to click on, view, notice or look at your ads. This is CLICK FRAUD and is a serious legal offense. If you have Adsense on a Blog or website, you can get banned from Adsense for LIFE
- … DO CLICK FRAUD!
What do these numbers mean?
The numbers that you’ll be gathering for your keyword(s) will be from the “Global Monthly Searches” column. This number tells you the approximate number of monthly searches for your keyword(s) in Google and averages the searches over the past 12 months. Keep in mind as you put your brainstormed ideas into the Google Keyword Tool, these results are not perfect–they are approximate results.
Below we’ve listed general guidelines to help you interpret the numbers you find under “Global Monthly Searches”. Ideally your Focused Market ideas will fall within the “Focused Market ” range below. Remember though, there are several other factors that will help you decide whether or not a Focused Market is worth pursuing:
- Market…………….150,000 or more searches
- Focused Market……………….50,000-150,000
[Tip 3: To ensure you are targeting the right market, Google gives you the opportunity to search for “exact match phrases.” For exact search results in relation to your market, put your keywords in brackets for [exact phrase match]. For example, searching for [lose weight] will show results of people who type in verbatim lose weight, (not weight lose or to lose weight). You may not get as many leads with exact phrase match, but this will help give you more qualified leads.]
Finding the Customer Value
Customer Value is the price that advertisers in Google are willing to pay for each potential customer you bring to their website. More specifically, it is the approximate dollar amount that an advertiser pays every time their Google ad is clicked and a visitor is sent to their website. You can assume that the higher the Customer Value the more lucrative the focused market. A healthy Customer Value also signifies that the visitors in this Focused Market are more than “window shoppers”, they are “qualified buyers” or buyers who are going to actually spend money in your focused market.
By using the Google Keyword Tool, you’ll perform a search similar to the one you did in the previous section, but you’ll need to make a few adjustments. These adjustments let you see the dollar amount companies are paying in advertising costs just to receive one visitor to their website through that particular keyword phrase! If they’re willing to pay that much we can assume that the customer is already considered a qualified buyer.
To find the Customer Value of your brainstorming ideas you’ll need to adjust the settings of the Google Keyword Tool as follows (this process is shown in the video below):
Match Type set to “Broad” – By leaving the Google Keyword Tool on the “Broad Match” setting you will get a clear idea of the full potential of your focused market. It’s important to understand that these numbers will be largely inflated compared to the amount of traffic you’ll actually see on your site, but it’s still helpful to know the potential of the market as a whole.
Local Monthly Searches: Highest To Lowest: By rearranging the information in the Local Monthly Search Volume column from highest to lowest, you’ll be able to view all related keyword phrases by search volume which will allows you to see the market as a whole. Simply clicking the Local Monthly Searches link will make this change. You want to make sure you look only at Local Monthly Searches because many words are similar in Portuguese and Spanish. You don’t want to be basing your business on Spanish customers unless you can service them.
Show Estimated CPC – The estimated CPC stands for Estimated Cost Per Click. This term refers to how much advertisers (your potential competitors) are willing to pay for every visitor that comes to their site. Knowing the average CPC is an essential part of qualifying your brainstorming ideas. By multiplying the average CPC by the number of searches done for a phrase, you will have an idea of how much money people are spending and the potential value of your focused market. Usually if people are bidding at least $.50 or more to get that traffic to their site, that means that they are profiting from those visitors. (and you will too!)
The Worth of Your Focused Market
The value of your focused market confirms is an estimate of how much money is spent monthly at the websites that make up the market. Keep in mind that the Focused Market Value represents the focused market as a whole and NOT a single website, so you can expect a small percentage of this sales volume at your own website.
To find the Focused Market Value:
Refer to your notes above. You’ve already found the Focused Market Demand and Customer Value in the exercise above, so multiply those two numbers to find the Focused Market Value. By combining the results of this equation with the results from the commercial intent tool (which you’ll be using shortly), you will have an excellent idea as to whether or not people in this focused market are qualified leads who will turn into real buyers. It is important to remember that qualified buyers vs. non-qualified buyers will make all the difference in how much ROI you see.
Did we confuse you yet? Here is the simple way:
Number of Searches x Maximum CPC = Focused Market Value OR
Focused Market Demand x Customer Value = Focused Market Value
Below we walk you through how to determine the Focused Market Value manually, just so you know how it’s done. To find the Niche Value of your brainstorming ideas you’ll need to adjust the settings of the Google Keyword Tool as follows (this entire process is shown in the video below as well).
Here is the not-so-simple-way (but we still want you to understand).
Example: For the phrase Surf boards there are 9,900 Global Monthly Searches and the Estimated Avg. CPC is US$0.22, so the equation would go as follows:
301,000 (The same number you found as your Focused Market Demand)
x $0.75 (The same amount you found as your Customer Value)
$225,750 is the Focused Market Value.
Let’s do one more, just to make sure you got it. Another niche to research is lingerie. Since there are two spellings for the word we will combine the terms “lingerie”.
2,240,000 (Focused Market Demand for “lingerie”)
x $0.70 (Customer Value for “lingerie”)
Based on the date that Google provides, the Focused Market Value is over $1,568,000. We repeat, that is over $1.5 MILLION A MONTH spent at websites that are found on Google using the search phrase “lingerie”. And that’s just one general search phrase for that industry. Imagine the potential!
Another interesting focused market is the coupon clipper in the shopper’s market. We’ll just look at searches for the general keyword “coupon codes”.
11,100,000 (The same number you found as your Focused Market Demand)
x $1.00 (The same amount you found as your Customer Value)
As you can see the coupon market is very big. Each month there is over $11,100,000 spent on advertising for searches related to “coupon codes”. Obviously the sites that pay this money aren’t selling coupons but maybe they are offering customers other ways to save money shopping. Or maybe they are compiling coupons for buyers to browse. Now before your mind starts racing with how you’re going to spend your new-found fortune, understand that THIS IS ONLY HALF OF THE EQUATION. Remember, if a focused market is that popular, and appears to be making a lot of money, then there will ALWAYS be competition.
Competitors and Your Focused Market
If the competition in a particular focused market is high, there is a strong possibility you won’t be able to get your website onto the first few pages of Google’s search results, especially if you use their backlinks. No two websites are the same. If not you can just run some Facebook Ads or Adwords.