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Niche marketing explained

Updated on February 15, 2013
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What is niche marketing?
What is niche marketing? | Source

What is Niche Marketing?

When it comes to making money online niche marketing is one of the most effective ways for the budding online entrepreneur. A niche market is a very specific subset of an existing market that has a specific demand. For example shampoo would be a general market people want to buy shampoo to wash their hair. There are literally thousands of websites that are trying to market shampoo and many companies have been doing this for years and are well established. This means that it is difficult for a beginner to break into that market and will find it hard to beat their well established competitors,’ (it is not impossible to do, but it is time consuming and will make it difficult to earn money for a long time). Due to the large number of competitors targeting the shampoo market it would be a good idea for a new marketer to target one of the subsets of afore mentioned market.

A subset of the shampoo market could be apple scented shampoo. There may be thousands of websites targeting ‘shampoo’, but there will be less websites targeting, ‘apple scented shampoo’. As you can see a niche market is one where a specific type of product is geared towards an audience who really wants that product. In the above example that would mean people who want to buy shampoo that smells like apples.

The main rule to remember when starting out as a niche marketer is identifying the most profitable niches. A profitable niche can be easily identified using keyword research. A niche marketer will search for keywords that are searched for regularly over the course of a month (usually over 1,000 searches per month) and have low competition (usually less than 100,000 websites showing up using that keyword). Niche marketers target low competition, high search volume keywords because they can use them in their websites and can optimize their website to reach the first page of Google and other search engines. A website that appears on the front page of a search engine gets about 500% more traffic than one that is on the second or third page. It is a well known fact that more traffic equals more money.

Niche marketing is highly profitable because of the type of audience it attracts. Looking back at the previous example it becomes obvious that a website that targets the keyword shampoo will attract an audience who want to know more about shampoo. This does not necessarily mean more money for the website owner because within that traffic will be people who just want to know what is in the shampoo, what shampoo is, other uses for shampoo, which means that it is a very generalised audience. The niche marketer who targets apple scented shampoo will attract an audience who are looking for specific types of shampoo, which means that the audience is already in a state of mind where they are willing to buy the offered products. This proves that the statement ‘more traffic equals more money’ is not always true. The statement should be ‘more targeted traffic equals more money’.

Niche marketing isn’t just for small business owners who are just starting out it can be used by large companies who have a well established online presence. The larger companies have more money to spend on keyword research and can hire people to do all of the tedious work that is necessary to target niche markets. This does not mean that the niche markets will become saturated and will become just as difficult to reach the top of for smaller businesses because there is an almost inexhaustible number of niche markets and new ones appear every day. One of the reasons that big and small businesses target niche market is because the advertising costs are much lower for niche markets. Online adverts tend to be priced up according to the demand for a set of keywords. The lower the demand for a particular keyword or key phrase the lower the adverting cost. Niche market keywords tend to have a lower demand so they cost less to advertise in.

Niche marketing is very lucrative for affiliate marketers and the companies that they are marketing. Companies like Amazon.com allow affiliate marketers to join their affiliate program and pay the marketer a commission for every sale that they bring to Amazon. Affiliate marketers will search for niche markets, they then search for products on Amazon to promote to those niche markets and then they create websites that promote those products and they earn money for their hard work.

To conclude niche marketing means that a more product is chosen and the promotion of said product is tailored for the audience that wants it most. Usually the more specific the market is the lower the competition. If a niche market is targeted with an effective marketing strategy it will have a higher conversion rate than if a more generalised market were targeted.

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