Not all niches are created equally. Readers will have a much higher propensity to buy products and services in some niches than others. In some niches, customers might hand over hundreds of dollars to purchase an online course without batting an eye. In others, it might be more like pulling teeth to sell a $7.00 e-book. There are several questions that you can ask yourself to determine whether or not the customers in the niche you are considering will buy products:
- What are the demographics of my niche? Who are the people that follow your niche? How old are they? What kind of income do they have? Are they capable of spending money on my products and services if they want to buy them? If your potential audience is pre-teen girls or homeless people, you’re going to have a tough time selling anything because those demographics don’t have a disposable income. On the other hand, if you’re audience consists of upper-middle-class men or lottery winners, you don’t have to worry about whether or not they will be able to afford your products and services.
- Are people in my niche already buying products from someone else? If there are already products and services in your niche that people are already buying pretty regularly, then you know that they would probably be willing to buy products and services from you if you were to come up with a better product or service. If no one is successfully selling anything in your space, take that as a major red flag. If competitors are selling products and services in your space, pay special attention to the price points so that you know what kind of revenue opportunity exists in your potential niche.
- What kind of benefits will my audience gain from buying my products? If your audience will make money, save money or save time by implementing the knowledge offered by your products and services, your sales pitch becomes much easier. Most people would happily pay $500.00 for a course if they know that they were going to earn five times that much money by implementing what they learn in your course over time. I once paid $2,500 for an online course and made more than $100,000 in the following year from what I learned in that course. I’ll buy $2,500 courses all day long if I know they are going to yield similar results.
- Is my audience fanatical about my niche? There are certain markets where participants are extremely passionate and enthusiastic about their niche. They evangelize others to join them and spend a lot of money on products and services to further their interest. Magic The Gathering, a competitive card game, is an example of a niche with a rabid fan base that is more than willing to spend money. It can cost as much as $600.00 to put together a competitive deck that will do well at tournaments (https://www.quora.com/What-is-the-average-amount-of-money-per-month-spent-by-an-avid-Magic-The-Gathering-player). If someone is willing to spend $600.00 on what amounts to a deck of cards, you know that is going to be a profitable niche.
Your business ultimately has to make money by selling your own products to your customers or by selling someone else’s products to your audience through advertising. If the people in your audience are unwilling or highly resistant to purchasing products and services in your space, you should probably find another niche. If people in your niche are more than willing to buy information products and services that you might sell through your business, you know you’re on the right track.
Choose a Market with Advertising Demand
You also need to know whether or not there are companies that are interested in advertising to audiences like yours. If there is a healthy level of demand for advertising space in your niche from advertisers, you will have a much easier time making money. When there are more advertisers competing for ad placements on your website through Google AdSense or another advertising network, the average cost per click (CPC) to the advertiser will rise and you will make more money.
Here are the top ten most expensive keywords to target using Google AdWords, according to WordStream.com (http://www.wordstream.com/articles/most-expensive-keywords).
- Conference Call
- Cord Blood
Certain niches consistently demand high CPCs because of the profitability of selling products and services in those niches. Keywords in financial, legal, medical and business services consistently generate above average CPCs for publishers in those niches. For example, there are mesothelioma-related keywords that command more than $100.00 per click (http://grepwords.com/1000000-top-high-paying-cpc-adwords-adsense-keywords-2015/). While this sounds like an outrageous amount of money to pay for a single click, law firms that operate in this space can make a killing by suing companies on behalf of people that were exposed to asbestos and developed mesothelioma. The average mesothelioma trial award is $2.4 million (http://www.asbestos.com/mesothelioma-lawyer/settlements.php) and the law firms representing the plaintiff keep a significant portion of that money. If you were a lawyer that represented mesothelioma patients and you knew that one out of every 250 clicks would result in a new client that had a strong likelihood of getting a 7 figure settlement, you would pay $100.00 per click all day long.
There are a number of ways that you can determine whether or not there is strong interest from advertisers in your niche. Here are the steps that you should take to gauge advertiser demand in your niche:
- Perform Google Searches – Make a list of keywords that people in your niche might search for on Google. If your niche is pet care, you might search for words like dog toys, dog facts, dog food and dog breeds. Navigate over to Google in your web-browser of choice and search for those keywords. If you search for your keywords and there are always three or four ads on the top and bottom of the page, there is very healthy demand among advertisers for your niche. If you don’t see any ads in Google when you search for relevant keywords, consider that a possible red flag that there may not be strong advertiser interest in your niche
- Look For Affiliate Programs – Look for products and services that you can promote on various affiliate networks, like CJ Affiliate (www.cj.com), LinkShare, (www.linkshare.com), ClickBank (www.clickbank.com) and ShareASale (www.shareasale.com). You can also do web searches for phrases like “dog food affiliate program” to help determine what affiliate networks have relevant offers in your niche. If there are a number of programs catered toward your niche, this is a good sign that there’s advertiser demand. Take note of the relevant affiliate offers that you find, as you might be promoting these offers to your audience later.
- Look on Competitors Websites – Find other websites in your niche and take a close look at what kind of advertisements they are running (if any). Make sure to visit these sites in private browsing mode so that no ads are shown based on your past browsing behavior. If they are running an ad network, like Google AdSense, and their website is displaying ads relevant to their niche, that is a good sign of healthy advertiser interest. However, if generic ads that aren’t directly related to their niche are displaying, that might mean that no ads that are relevant to their niche are available. Again, take note of the products and services being promote on your competitors’ websites because you may be promoting those same products and services in the future.
If you want to determine what kind of advertising revenue you might be able to generate from your website, head on over to the Google Keyword Planner (https://adwords.google.com/KeywordPlanner). You will need a Google AdWords account to use this tool. Enter keywords relevant to your niche and perform a search. Look at the suggested bid column and try to make an average of 10-20 relevant keywords for your niche. That is an approximation of what advertisers will pay Google for each click. Since ad networks typically take a 30-40% cut of what an advertiser pays, make sure to reduce your average CPC calculation by that much. That means if advertisers pay an average CPC of $1.00, you’ll earn about $0.65 for that click.
Once you approximate what you will earn for each click, you can make an estimate of what you will earn for every 1,000 visitors on your website through Google AdSense. Assuming that your website has a 2.5% click-through rate, you will earn about $16.25 for every 1,000 people that visit your website. Please note that your CTR may be as low as 1% or as high as 5% depending on how you position your ads and where your web traffic is coming from. These calculations provide a very rough estimate of what you might be able to make, but there could be a significant variance in what you actually earn depending on advertiser demand, your ad placements, your traffic sources and a variety of other factors.