Niche Research is the third article in our How To Find Niche Markets series. The first article in the series goes over some niche market fundamentals. The second article helps you develop an initial list of niche ideas. This article is all about Niche Research– or evaluating your short list of niches to find the one that you can succeed with. If you have followed the steps in the first to articles, you should have a short list of about 10 potential niches that you need to research. The detail research phase consists of: market sizing, competition, and potential to add value to the niche.
Niche Market Sizing
There are a variety of ways that you can measure the relative size of a web market opportunity. Two relatively easy ways to evaluate a market size are to research the number of searches (search volume) and to determine a relative sales volume. The easiest way to determine search volume is to use Google’s own keyword tool. There are other tools on the market (including my favorite- Market Samurai), but Google’s tool is free, and the data source is Google’s search engine which will most likely be your number one source of traffic.
If you use the Google keyword tool for “elliptical trainer” you will find that there are 201,000 Global Monthly Searches or 135,000 Local Monthly Searches. Is this number big or small? Well, like everything, this number is relative…”elliptical trainer reviews” has 18,100 global searches while “treadmill” has 1,830,000 global searches. The Google keyword tool also give you information on trends (to see if there is any cyclical nature or growth/decline factors) and Cost Per Click (CPC) dollar amounts (which helps you understand the advertising market opportunity).
Determining potential sales volume is often tricky. For a product-centric niche (such as “elliptical trainers”) you can go to Amazon.com’s Best Seller section and get a sense of the top selling items (and even compare them to other niches).
The Amazon list of best sellers for “Cardio Training” shows a small elliptical trainer as number one, but a “Recumbent Mag Cycle” as number two. Perhaps, a niche around “recumbent mag cycles” is worth exploring…but not before doing more niche research!
Another approach to determining potential sales volume is to consider “purchase intent” keywords. A purchase intent keyword (such as “buy”, “purchase”, “reviews”) are keywords that you can add to your niche phrase to understand how many people are looking to purchase something in your niche. Use these purchase intent keywords (buy “NICHE”) in the Google keyword tool to get a sense of the relative sales volume potential of your prospective niche.
There are a myriad of ways to do niche research on your competition. I’ll review a couple of free ways and a couple of paid tools that can speed up the process and provide you some more insight.
Google For Niche Research
Google, once again, provides good insights into the competition. Simply type your niche keyword into Google’s regular search engine and you can find some valuable information. The first piece of data is the number of search results that is listed right under the search box, and above the search results. This number represents your competition in that it shows the number of web pages that have relevant results for your niche. In general steer away from anything with more than 100,000 results (although as you get more experienced in internet marketing this will not be a factor and there are more sophisticated metrics to evaluate). The niche “elliptical trainer” returns 1,330,000 results – this is enormous, you will never make any headway in this niche. On the other hand, “Dunkel Beer Brands” returns 7,960 results – this is very manageable. Remember: Use your niche in “quotes” to get the number of pages for your exact niche phrase.
The next thing to evaluate is the sites that come up on the first page of the Google rankings. This is your real competition. If you don’t ultimately rank on the first page for your keyword, you will not get any significant traffic. The quick and simple way to measure your competition is to evaluate each of the top 10 ranked websites. To do this, look for the following:
Established brand names – If all of the top results are from established brand names (i.e., apple.com, ge.com etc.) you will find it very hard to rank.
General Authority sites
Exact match domains
Article sites, Web 2.0 sites. How to Sites – If you see results in the top 10 from sites like squidoo, hubpages, zimbio, ehow, wikihow, etc. then you know you have a chance at gaining a top 10 ranking. These sites tend to only be one page deep on any specific topic and can be outranked by a site with strong, deep, relevant content (that also has a strong backlink profile)
Garbage results – If you see results from completely nonsensical sites (parked domains, one page websites, or websites with completely irrelevant information) this is another good indicator that you will be able to crack the top 10.
Market Samurai for Niche Research
Market Samurai is the tool that I recommend to help you evaluate a niche (or just specific keywords). I have used multiple tools (including Micro Niche Finder, Niche Finder, Word Tracker, Traffic Travis and a variety of others) to help research and evaluate keywords and Market Samurai is the easiest to use and offers great support to make sure that it is always updated as the search engines are continually evolving.
With Market Samurai, you simply enter in a keyword and it will automatically create a list of related keywords using Google’s keyword tools. You can easily modify the list by adding positive keywords (words that are required to be in the results) or negative keywords (words that cannot be in the results). You can also specify a minimum and maximum phrase length to help you keep the list manageable.
The real strength of Market Samurai is how it automates the keyword research/evaluation phase. The tool will take your initial list of keywords and compile a comprehensive list of useful metrics such as:
- Total Searches
- SEO Traffic
- Adwords Traffic
- Adwords CTR (Click Through Rate)
- Adwords CPC (Cost Per Click)
- SEO Competition
- Title Competition
- URL Competition
- Adwords Competition
- Adwords Value
- SEO Value
Even better, you can filter your results for most of these metrics, sort them, and export them to Excel for further analysis.
My personal favorite metric is SEOTC which is the number of webpages globally that have the entire search phrase in the title of a webpage. If the search phrase is in the title of the webpage you can be assured that the webpage is being optimized for that search phrase and is your competition.
The other nice research/evaluation component of Market Samurai is its “SEO Competition” tool.
This tool finds and displays the top 10 web pages for your search phrase (niche). It then provides 15 different metrics to help you identify how strong the competition is. It even color codes the results (red, yellow, green) to help you quickly gauge the overall market competition.
Potential To Add Value to the Niche
The final item to consider when evaluating potential niches is…how can I add value to this topic. In other words, is there a void in the market (regarding this niche) that your website or blog can fill. Is there lack of meaningful, objective reviews? Is there no in-depth information freely available on the niche? Are you an expert in this niche? If you are looking for a niche that has long term earning potential, then you must consider what unique value you can bring to the people that are interested in the niche.
In Part 1 of the How To Find Niche Markets series, I examined the fundamentals behind finding a profitable niche for your website.
In Part 2 of the series, I showed you how to develop a short list of Niche Ideas.