HomeBasedBusinessAdviser.com Niche Marketing Short Course – Part 3 How To Evaluate A Niche Market, For Profitability In the previous article we discussed how to find good, strong, niche markets. In this article we are going to learn how to evaluate whether or not the niche market you want to enter is going to be profitable. The first thing you want to do in your evaluation is to analyze the following: 1. The size of the target market you wish to enter 2. How competitive is that target market 3. Advertisers and payments Once again for this article we are going to be using the Google Keyword Tool for our research. This is the most inexpensive (free) way to get started in analyzing keywords. The tool I personally use and highly recommend is Micro Niche Finder which provides all the information in one easy to use interface. Ok, so let’s go to our keyword tool and type in the main niche market we want to enter, be sure to check the box that says “Use Synonyms”. You want to see synonyms for the word you use because not everyone searches for one word only. You want a good cross section of search information. For this article we are going to use “recycle” as the main target niche we want to enter. Here are the results that Google’s Keyword Tool came up with. The keyword “recycle” shows a monthly search of 2,240,000. This is far to many searches to be considered a “niche” by our terms and would be difficult to tackle because of the competitiveness. However, this is the main target niche. You will see as we begin to drill down we will find some very nice, smaller sub-niches, that we can enter and possibly make money. Generally I try to find a niche that has between 4,000 and 25,000 searches per month. This ensures there is enough interest in the topic that I can drive traffic to my site and it is not so competitive that I can’t find a unique selling proposition to compete with others in that market. If you are following along at the Google Keyword site you will see there are tons of “recycle” ideas that came up in this search and that fit our needs as far as the number of searches per month. Here are just a few that the search produced: • • • • • recycle aluminum recycle batteries recycle bottles recycle cardboard recycle computers • • • • recycle electronics recycle glass recycle materials recycle toner Some of these could definitely have potential. What we have been able to do in just a couple of minutes is determine whether there is a demand for the information in the niche market we want to target. This specific market is full of them. Now we must determine if people are paying for information in this target niche. All the demand in the world for this information will be useless if they aren’t willing to pay for it. So how do we go about determining whether people are paying for information in this niche? Luckily for us Google provides that information as well. When Google displays the results for your search the first column displays the keyword suggestions and the second column displays the “advertiser” competition. According to Google this means: This column shows the number of advertisers bidding on each keyword relative to all keywords across Google. The shaded bar is a general guide to help you determine how competitive ad placement is for a particular keyword. That alone will give us a pretty good idea of whether or not people are buying because no one is going to pay to advertise if no one is going to buy. Another quick way to see if there if there are paying advertisers is to simply type your keyword phrase into the Google search bar and look on the side to see how many advertisers there are. If there are more than a few pages worth of advertisers then you know that it is somewhat competitive and people are making money. I like to have more information than just a graph that says people are advertising which is one of the reasons I use Micro Niche Finder. It gives me access to many more tools than the free Google Keyword Tool, such as (my favorite) the ad cost for each keyword, exact phrase count, SOC (strength of competition) and OCI (Online Commercial Intent). The extra information provided by Micro Niche Finder really narrows down the profitability of a keyword and makes it much easier to know whether your niche is viable and more importantly, profitable!