Let us start with an example. Suppose we take two search terms targeting two niches on the dog food market: “best dog food” and “dog food analysis” (135,000 and 18,000 Google searches respectively). Which one do you think can bring you $2,400 a month and which one is a complete waste of time?

Surprisingly enough, the correct choice is “dog food analysis”. True, the number of searches for this keyword is significantly lower, but the competition is significantly lower as well. With a keyword like that, you have a good chance of getting your website listed on the first page of the major search engines like Google, Yahoo and Bing.

Let’s see how much you can earn from Google alone if you choose to stick with “dog food analysis”. Assume that your website is at the top of Google’s first search page. Your monthly traffic will be around 30% of the monthly searches for the chosen keyword:

Monthly Traffic = 30% • 18,000 = 5,400 [Unique Users / Month]

On average each sell online will earn you $45. The conversion rate (the percent of visitors who will actually buy the product you offer) averages to 1% of your traffic. Hence, your monthly earnings will be:

Monthly Earnings = [Monthly Traffic] • [Earnings per Sale] • [Conversion Rate] = 5,400 • $45 • 1% = $2,400

If your website targets the right keyword, you’ll get $2,400 every month. Create 10 websites, each targeting the right keywords for its niche, and your monthly earnings will rise to $24,000. Not bad, right?

Of course, each keyword has a different potential. Some will earn you thousands of dollars a month, others significantly less, but in the end, a correctly handled niche research can bring you tens of thousands of dollars a month.

It all sounds peachy, but how do you actually do a proper niche research?

Finding a Niche

Ask any MBA graduate (who is not necessarily involved in Internet Marketing) and he will tell you that a perfect niche will have:

1. High demand.
2. Large market – so that that even small niches will be profitable.
3. Low competition.

Choose a niche that meets all the requirements above and you’re golden. To find such niche, we will use the most popular tools for keyword research: Google Keyword Tool and Traffic Travis.

Google Adwords Tool

Google is not an ally in your search for a good keyword. Don’t expect him to offer you the tools you need on a golden plate. Nonetheless, Google has a huge database of searches which you can use for your own benefit. The only way to access this database is via Google Adwords Tool.

The tool was developed to help advertisers find the best keywords for their online advertising campaigns. However, some of the features the tool offers are applicable to keyword research as well, making Google Keyword Tool useful at least at the beginning.

Go to Google Adwords Tool, type “dog food”, “best dog food” and “dog food analysis” in “Word or phrase” box, solve the Captcha and click “Search”.

The results clearly show that the advertising competition and the number of searches for “best dog food” are very high, with 135,000 global and 110,000 local US searches a month.

On the other hand, the advertising competition and the number of searches for “dog food analysis” are low, with 18,100 global and 9,000 local US monthly searches.

The keyword “dog food” targets the entire market, has a high competition and 2,240,000 global monthly searches.

Under the “Search Terms” section you will find “Keyword Ideas”, as suggested by Google. The list is interesting but mostly useless, since the best keywords are probably already taken by competing websites.

Before we go further with the examples let’s see how Google Adwords Tool may come useful for our niche research. Just to remind you, we’re looking for high demand, large market and low competition.

High Demand

The number of monthly searches for the entire market (not for your specific niche) is the best indicator of the online demand for the product. That’s why you should check the monthly searches for the entire market before targeting a small market niche like “dog food analysis”. In our case, the keyword for the entire market is “dog food”. There are 2,420,000 monthly searches with broad matching for that keyword, meaning that there’s a high demand for the product.

The main challenge at this stage is to identify the entire market for your product. To do that, find the most likely keywords that describe your product, type them in Google Adwords Tool and check the keyword ideas with the highest number of searches and (usually) the highest competition. Those keywords will represent the entire market in most of the cases.

Market Size

“Competition” in Google Adwords Tool doesn’t indicate the SEO competition of the market, but rather suggests how much money is there. What’s the difference? High Adwords Competition means that many advertisers choose to place their ads to that keyword. Thus, high competition for the most general keyword is a great way to evaluate the size of the entire market.

Now let’s get back to business. The keyword “best dog food” is a sub-niche in the dog food market. We will apply our three “perfect niche” criteria to this keyword and decide whether the keyword is good or not.

1. There are 135,000 Global Monthly Searches for the keyword, meaning that there’s high demand for “best dog food”. So far so good.

 

2. The number of searches and competition for the parent keyword (dog food) are high as well. This means that the entire market is large. Many people are interested in this product and many advertisers are ready to invest in ads. That’s even better.

 

3. We have no way of knowing how high the SEO competition is between the highest ranking websites. However, high advertising competition for this keyword as it appears in Google Keyword Tool suggests that SEO competition is high as well. That’s bad news – the competition for this niche is too high. Since we’re looking for a low competition niche, that keyword is definitely a bad choice.

 

On the other hand, the second market niche (dog food analysis) has a fair number of Global Monthly searches and low competition. Do we have our keyword? Not so fast!

As I’ve already said, there’s a difference between Advertising Competition and SEO Competition. Theoretically, the two should correlate, but in reality, it’s not always like that. Advertisers and SEO people fail to do their homework from time to time, leaving behind niches with high Advertising Competition and low SEO competition, or vice versa.

Keyword Research Tools

The most challenging thing is to find a keyword with high advertising competition and number of searches in the general niche, but with low SEO competition in the sub-niche you intend to target. Google Adwords Tool is not suited for the task, and we we’ll need additional professional keyword research tools.

I wouldn’t buy expensive keyword research tools, since keyword research is not something you do very often. On the other hand, I wouldn’t suggest using free tools that are available online. You will waste precious time just to discover that some of the features are unavailable and other don’t work as expected.

Obviously, a software tool alone, even a good one, is not enough to help you with your keyword research. Functional, dedicated software can save you a lot of time and hard work, but you’ll need to use your imagination as well.

Traffic Travis

Traffic Travis is an effective and cheap tool that offers two main features that Google Keyword Tool lacks: the ability to generate and manage large lists of keywords and an easy way toanalyze the SEO competition for each keyword.

The Keyword Finder section of Traffic Travis helps you to generate and manage a list of all possible searches that are related to your chosen keyword (such as “dog food”). To generate the list, type different keywords in the “Search Term” box and let the Keyword Finder to pull a list of related keywords.

This is where your imagination comes to play. Let’s think outside the box for a moment. Think about all the people who search for quality and expensive dog food online. There are three categories of people out there: those who come to learn about dog food, those who come shopping for a specific brand of food and those who come to buy this specific food. Each category uses its own search terms. Our keyword example (best dog food) covers all three categories. That’s why it’s a high-competition niche.

Instead of hunting all three categories simultaneously and struggling with a multitude of competing websites, let’s try to target only the first category. People from that category only come to learn about the food. They still don’t know what food is good for their dogs. I’m sure you can guess about the possible searches people use. It may be like “what food dogs can eat” or “raw dog food” or even “can dogs eat vegetables”.

After each search, choose the whole list and click “Move to saved”. Build a massive keyword list from the keywords suggested by Traffic Travis. Once you finished building the list, click “Send to sorter”.

Go to the “Keyword Sorter” tab; delete all the keywords with less than 100 daily searches and save the list as a text file. Remember, our goal is to narrow this list down to one keyword that meets three requirements: demand, money and competition.

After completing the list, check the competition for each keyword using Google Keyword Tool: Open the saved text file with your keywords and copy them to the “Words or phrase” window in Google Keyword Tool (one keyword per line). Remove from the list all the high-competition keywords and leave only best keywords for the final deep competition analysis.

Go to SEO Tools section in Traffic Travis and type each keyword in your short list into the “Phrase to Analyze” box. The tool will give you all the relevant information about your potential competitors (websites with the highest ranking for that keyword). Choose only the keyword that meets the following requirements:

1. High number of searches.
2. Low or medium difficulty (see the ‘Difficulty Rating” in the picture below).
3. The keyword should be short.

The keyword better be short because you’re going to use it as your domain name. A domain name should be as short as possible, to make it easy for people to remember.

When you finally identify a good keyword for your niche, you can start developing you website with a focus on SEO. We’ll discuss the existing SEO tricks and techniques for targeting specific keywords in “On Page SEO” section. You’ll learn how to choose the domain name, how to develop a SEO-oriented website and to create an appropriate content for it and last but not the least, how to get the highest search engine ranking for your keywords.

Summary

We can sum the above as follows. First, generate a keyword list targeting your niche using Traffic Travis. Then, remove keywords with a low number of searches. Copy the list into Google Adwords Tool and remove all the high competition keywords. Create a short list with potential keywords. Check SEO competition for each keyword with SEO Tools of Traffic Travis.

Always remember: A profitable market niche has to meet three requirements: high demand, a large market and low competition for your niche. Good luck with your online business!

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