This is where most people get stuck when trying to set up a niche site. Before you even start thinking about writing content, picking a nice looking theme or creating social media accounts for your new project, you need to pick a niche. So first things first, how do you choose a niche for your niche site?
First let’s assume you have no competitive advantage in any niche. If you have, then you can consider using that advantage. For instance, if for whatever reason you have a large data base of people who play the guitar that none of us could have access to, then you can consider building your niche site around that. Pick something that will interest that data base you already have and promote your new site to them.
If you don’t have any competitive advantage, then there are two main things you need to consider in order to pick a good niche.
- How do you get traffic?
- How do you make money?
There are two tests you can run in order to make sure you’ll be able to get traffic, which are analyzing the potential target audience and studying the competition.
If your candidate niche passes these two tests then there are two more aspects you need to think about which have to do with monetization.
Let’s take a closer look at each of these 4 tests you need to make your candidate niche go through before calling it a winner.
Potential target audience
First thing you need to figure out is whether or not there is a large enough audience searching for that topic you want to build your niche site around. There are several tools to do this, some more complex than others. For the time being I’m going to stick to some of the simplest ones, all of them free.
Google Trends – If you want to start simple visit Google Trends and enter some topics you are considering for your niche site. Google Trends won’t give you specific numbers about how many people are searching for those terms, but it will give you a very clean and easy to understand comparison chart so that you can see which of those topics generates more interest.
AdWords Keyword planner – AdWords keyword planner will allow you get more specific numbers about how many people are searching for a particular keyword or set of keywords on a monthly basis. You can either start with a broad topic and let the keyword planner give you the numbers for all the keywords related to that topic combined or search for each keyword’s metrics individually.
Let’s move on.
Now that you’ve figure out which topic/s have a larger potential target audience you need to know how much competition you’ll be facing if you decide to go into that niche. By competition I mean how many other websites are trying to rank first for your preferred keywords.
Sometimes it’s better to go into a niche with a lower potential audience and lower competition instead of going into a niche with a larger potential audience but much more competition. In other words, it’s better to get 50% of 100 searches per day than to get 10% of 200 searches per day, right?
AdWords Keyword planner – AdWords keyword planner can also help us figure out how much competition we’ll be going against. It won’t give us specific numbers, but it will grade each key word with a “high/medium/low” competition score.
Keyword Difficulty Tool – The keyword difficulty tool by semrush will analyze the volume of searches for a keyword, the number of results that come up on a Google search for that keyword and the authority of the domains which currently rank first amongst other figures to end up giving us a difficulty score which goes from 0% to 100%. The rule of thumb is that reaching Google’s first page for a keyword with a difficulty score of 80% is almost impossible. For a keyword with a difficulty score between 60% and 80% is doable, although it will take some time and hard work to get there, and less than 60% is what we are all looking for since it will be relatively easy to reach Google’s number 1.
Now that you’ve found a niche with a decent target audience and low competition you need to consider the monetization options for this niche.
I’ve covered some ways in which niche sites generate revenue before, so read this other post if you want to know more about that.
In most cases you will want to monetize your niche site through an affiliate program, so as dumb as this might sound you need to make sure there is an affiliate program that makes sense for your site.
If the niche you’ve chosen is “best calamari in the world” you might find it difficult to make a sale since I highly doubt there is an affiliate program that delivers fresh calamari to your door. You might be able to recommend a few books here and there, but even if the information you provide is the best that can be found on the internet you probably won’t sell much. On the other hand, if you niche is “best portable speakers in the world” and you provide good quality content about which portable speakers are best and why, you have way more chances of selling portable speakers to your readers.
Not only is it important to find an affiliate product that you can sell on your site but it’s also worth considering the price point of the product or products you’ll be promoting as you will probably making a percentage of each sale in most affiliate programs. If portable speakers sell for an average of $40 and you make 10% of each sale you’ll be making a $4 commission on every sale. If your niche is flat screen TVs though, which might sell for an average of $600, you’ll be getting a $60 commission on each sale, that is an increase of 150% revenue per sale.
Finding a niche with a large potential target audience and a low competition with affiliate programs available to promote decently priced products can be tough. Don’t expect to find the perfect niche in half an hour. It might take you days or even weeks to find a candidate that passes these 4 tests.
There are more advanced tools such as Long Tail Pro or Market Samurai which can help you find your niche by suggesting alterantive keywords and giving you a much more in-depth report of the difficulties you’ll find to rank for each of them, however this tools are paid (they have trial periods) and you might need to spend quite some time learning how to use them until you can really take advantage of them.