Creating Content Sites Around Profitable Niches

One question that often gets asked is "How do I find a profitable niche?"

Of course there are many ways to find profitable niches, this is one method that has worked for me and you'll find that you can find some amazing niches using this process.

I recommend creating "content sites" around the niches you find using this method and derive income from Google Adsense and/or affiliate programs related to the niche.

Step 1. Find potential keywords

In this step, you want to make a list of keywords that would be the main keyword for any of the potential niches you're considering. The types of keywords that I like to look for are ones that cover specific product genres, preferably for high-priced, specialized machines that users may be looking for more information about before they buy. That way you can create a simple "review" site or "directory" with information about the products in that niche, and create ultra-targeted traffic for your Adsense ads or affiliate programs.

An example of a keyword I came up with that fits the bill: "cappuccino machine". Basically any high-priced, consumer or business machine, is PERFECT for a keyword rich content site. Just for comparison, I'll also include "coffee machine" and "espresso machine" in my research as an example in this article. At this point I have no idea which of these will turn out to be the best option to pursue.

You can find ideas for niches like this virtually anywhere. Look in magazines, the yellow pages, go to a nearby store... heck, you could look in your own house for products YOU'VE bought. The possibilities are limitless.

2. Research Popularity

Now for each of the keywords you've come up with, you want to look at a few things. We're going to be comparing only three keywords, "coffee machine" , "cappuccino machine", and "espresso machine" in order to determine which market would be better to pursue (I still don't know myself as I write this). You can extend this method of research to your own list of keywords which could be much longer than just two.

The first thing you'll want to do is head over to

http://inventory.overture.com/d/searchinventory/suggestion/

and run a search on each keyword to determine how many people are searching for it every month. "cappuccino machine" shows 7788 searches per month on Overture "coffee machine" shows 8283 searches per month "espresso machine" shows a whopping 26,890 searches per month

3. Research Market Price

Next, we are going to want to look at what the top bids are for these keywords. We can do this at Overture's main site:

http://www.overture.com

or by logging into Google Adwords and attempting to make a campaign using those keywords to see what the bids are. I also like to look at the #10 bid, because sometimes the top bid is out of whack with the rest of the bids. For this example I'll use Overture since it's faster and easier.

"cappuccino machine" has a top bid of $0.91 and a #10 bid of $0.25 "coffee machine" has a top bid of $1.97 and a #1 bid of $0.41 "espresso machine" has a top bid of $2.27 and a #10 bid of $0.70

4. Research Competition

The last the we are going to want to look at is the competition in each of these markets. So far it's looking like "espresso machine" has both the top bid amounts and the most searches. But this alone doesn't necessarily mean we definitely want to pursue this niche. Instead, we want to pursue a niche that has the best ratio of market price to competition. It doesn't matter if a market is getting a million searches a month and $10 per click if you can't get any traffic to your site. (Example: "credit cards")

I've devised a pretty simple way to research the competition in any niche market.

First, do a Google search for the keyword. Then look at the total number of search results:

Results 1 - 10 of about 312,000 for cappuccino machine Results 1 - 10 of about 7,760,000 for coffee machine Results 1 - 10 of about 1,390,000 for espresso machine

Here we can see the total searches for each of the keywords. To get even more information, look at the Google Pagerank for the top results on each search. You can probably compete in the market pretty easily if some of the top results have a pagerank of around 4 or 5.

5. Analysis

Now we've got a lot of data. How do we put this all together and actually decide which niche to pursue?

I like to look at the following info all together: number of searches (N), average of #1 and #10 bid (A), total results (T)

cappuccino machine, 7788, $0.58, 312000 coffee machine, 8283, $1.19, 7760000 espresso machine, 26890, $1.49, 1390000

(If you don't like Math, you can usually just look at these numbers alone and intuitively choose which niche looks like the best one to puruse... if you'd like an exact formula, read on...)

Now, you can use a simple formula with these numbers. I call this the "Profit Guild Profit Ratio" (PGPR) and it gives you a rough idea of what niche to pursue.

Here's how it works. Take the total number of searches and call it N. Take the average of the #1 and #10 bids and call it A. Take the total number of search results for the keyword and call it T.

Then, simply compute (1000*N*A) / T

So, for the keywords we're looking at, we have:

cappucino machine: 14.48 PGPR coffee machine: 1.27 PGPR espresso machine: 28.82 PGPR

Very simply, the higher the number, the better the niche. So as you can see, we now have a mathematical way of determining that "espresso machine" is the niche we should focus on for maximum profitability!

Good luck with your niche marketing!

Joe Lloyd has been quietly making a living online for over six years, and is the owner of Profit Guild, http://www.profitguild.com, an information hub and community for Internet Marketing professionals. This article may be reprinted as long as this message with a link to http://www.profitguild.com stays intact. Copyright 2005 Zen Marketing, LLC.