Before you start making money online, you need to be good at identifying niche markets or niche opportunities. It is true that the internet is creating wealth for a lot of people. What you read on many sales pages around the topic of “making money online” are somewhat true but without knowing your specific target audience, you will waste your time and money.
On my previous post, “what are you doing online today“, I’ve discussed with you about why people go online everyday. The Ruder Finn’s Intent Index broken down the reasons in seven different categories. The seven categories are Learn, Have Fun, Socialize, Express Yourself, Advocate, Do Business and Shop. They further broken down the main categories into sub categories and provided more details on why people go online. If you haven’t read my article, I would recommend that you read it before you proceed further.
What is a Niche Market?
A niche market is a subset of the mainstream market. The subset should be a distinguishable area of the overall market. This niche audience will have similar characteristics – i.e. same occupation, lifestyle, etc. Basically your audience will have the same interest therefore if you were to target a product of interest to them and market it well then you are bound to be successful.
The difference between mainstream marketing and niche marketing is that you know your customer and you know who and what kind of people will buy your product. If your product is targeted for the mainstream then you are just shooting the arrow in the air and hoping that it will hit something – that’s right, you are just counting on anyone to come and buy your product. Hence, if you are buying paid advertisement and you place your ad in the wrong section, you will again waste your money because you did not know that particular group of people will not buy your product. This is why a niche market is more cost effective and easy to do business with.
How to identify a Niche market?
Basically the secret is to identify a small market that is profitable. If you are going to start a blog site and you have interest in the environment then you may want to target other people with similar interest. You can further divide the environmental group into, renewable energy, saving the planet, no to coal and nuclear for energy productions, save the forestry, recycling, etc, etc… That means you are further narrowing the focus of your blog – which is a good thing because you can then become an expert on that topic and provide valuable content for your audience.
Therefore in order to identify a niche market, you have to first start off with some research. Above I’ve discussed about the 7 reasons why users go online. Your research should basically answer the following three questions:
- what is the demand in a particular sector/niche?
- who will be your competitors and what are they selling? and
- how will you monetize in that particular sector/niche?
You can use the following free tools to help find the demand and the competition:
- Start off with a Google search – run a simple Google search for some keywords within the niche market that you are researching. Analyze the results and the sites that come up on the first page. Then analyze all of the advertisers that uses Google Adwords program for the same keyword. You can find the advertisers on the right hand side of the Google search results page. Both of this information will give you some sense of what is selling and who is selling it.
- Go to Amazon.com and search for the same keywords and do the same analysis.
- Go to ClickBank.com or other affiliate network and search for the same keywords and complete similar analysis.
With the above research, you can see who is selling and what type of products are being sold in a specific industry. This will help you identify the need in that particular niche market.
Once you identify the niche market, you can then setup your website and focus on writing good content for the niche audience. Quality content with good advice will eventually attract the audience over to your site.