Niche Marketing - Assessing The Potential Of A Niche

Potential niche products exist all around us, but how doyou decide which ones are likely to be worth pursuing?

Here's a quick method that will give you a pretty goodindication without having to spend large amounts of timeand money on the task.

Step One:

This is a fairly obvious step - find out if othermarketers are spending advertising dollars in that niche.If they are, you can be pretty certain that it's aprofitable niche.

Why?

Because savvy marketers "don't" spend money on advertisingthat doesn't show a profit.

You can check this out quickly on "Pay Per Click" searchengines like Overture and 7search where advertisers payeach time someone clicks on their listing.

Let's check out an example.

For demo purposes I'm going to search on the keyword"snoring" because I have a project in progress on thesubject of "how to stop snoring without surgery".

Now go to http://www.content.overture.com/d/ and type in"snoring". When you arrive at the results page click on"View Advertisers' Max Bids" at the top right of thescreen. A new window will open up asking you to enter acode to access the information. Enter the code and submitit. On the page that comes up you will find the biddingrange for our search term - the higher the top three bidsthe more profitable (and competitive) the niche is likelyto be.

In this case the top three bids on Overture (at time ofwriting) for the keyword "snoring" are : $1.50, $1.47 and$1.46 - based on this we can be pretty sure that there is aviable market for niche products on "snoring"

Step Two:

OK now let's take this a step further and find out whatsearch terms (keywords and keyword phrases) are being usedto find our niche subject on Overture.

Go to : http://inventory.overture.com/ and type in"snoring". This returns a list including :

snoring 27352

stop snoring 8211

snoring cure 3308

snoring remedy 2366

cause of snoring 2186

snoring treatment 1233

snoring solution 1133

snoring problem 800

prevent snoring 623

... and a whole lot more. The numbers indicate the numberof times that each of those keywords/phrases have beenrequested in the previous 30 days.

Step Three:

Next we need to find out how many competing sites thereare for each of our keywords/phrases. We're going to dothis on Google - but first we need to decide what number ofcompeting sites is acceptable for our niche subject.

As with any subject, opinions differ widely.

Rosalind Gardner (Super Affiliate Handbook) does notconsider anything under 100,000 competing sites to be aviable niche.

Jimmy D Brown (Nicheology)suggests 30,000 - 100,000competing sites to be the ideal.

At the other end of the spectrum Andrew Williams (KeywordResults Analyzer - Word Tacker Version) looks for nicheswith 1,000 or less competing sites for each keyword/phrase.

For our example here I'm going to use Jimmy Brown'scriteria : 30,000 - 100,000.

Now go over to http://www.google.com and start enteringthe keywords/phrases from your Overture search, taking noteof the number of sites which are displayed. (Enclose yourkeywords/phrases with " for specific results, e.g. "snoringcures").

Here's the Google results from the list above :

snoring 977,000

stop snoring 121,000

snoring cure 3,850

snoring remedy 24,100

cause of snoring 2,310

snoring treatment 6,660

snoring solution 21,100

snoring problem 18,500

prevent snoring 3,510

So what does this tell us now?

The first keyword "snoring" is a non-starter. The termis well outside our competing sites criteria at 977,000and a far too general.

There are no individual search terms in the 30,000 -100,000 range, but that doesn't rule it out as a viableniche, the term "stop snoring" isn't too far out of theball park and we can combine some of the otherkeywords/phrases to meet the criteria.

Result - we probably have a viable market niche.

Step Four:

Finally we need to check the ratio of "supply" to "demand"for our keywords/phrases to make doubly sure the niche isworth pursuing.

Here's how we do it. The formula is :

Google Results(Supply)/Overture Results(Demand)

The lower the ratio the less competition. Here's anexample using our keywords/phrases :

snoring : 977,000/27352 = 35.72

stop snoring : 121,000/8211 = 14.73

snoring cure : 3,850/3308 = 1.16

snoring remedy : 24,100/2366 = 10.19

cause of snoring : 2,310/2186 = 1.06

snoring treatment : 6,660/1233 = 5.40

snoring solution : 21,100/1133 = 18.62

snoring problem : 18,500/800 = 23.13

prevent snoring : 3,510/623 = 5.63

So do we have a viable niche?

Based on the figures I would say the subject has prettygood potential. The niche is tightly focussed and the levelof competition is low, so it's worth pursuing.

Will the niche make money?

The answer to that question will be down to how effectiveour marketing is.

One final note : This system has it's limitations. If you'rereally serious about this Niche Marketing stuff you shouldinvest in some specialist tools which will provide a morecomprehensive range of keywords/phrases than Overturereturns.

Copyright © 2005, André Anthony Niche Market Know-How

André Anthony owns and operates Niche Market Know-How aresource for beginning Niche Marketers. Visithttp://www.nichemarketknowhow.com today to find strategies,tips, tools, products and resources for effective nicheproduct creation and marketing. Get his Niche Market Know-how Mini Course here:http://www.nichemarketknowhow.com/course.htm