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Signs of profitable markets

November 21st, 2009 | Internet Marketing, Training

In order to save a lot of wasted time , effort and money, you should know what looking for when determining the possible profits in your market.

There are two factors you need to research.

How many customers are there in the market (Traffic levels) and what is each of these customers worth.

You will need quantity as well as quality details to determine if a market might be profitable or not.

Traffic: half of the truth

Traffic levels are simply the number of people searching in a specific market.

There more people search for your market related keywords the bigger the market is and the more potential customers are there.

Unfortunately, this is only half of the truth.

People browsing within this markets are not necessarily the “starving crowd” eager to buy products from you. Browsers are not essentially buyers.

That’s why it is not enough to just look at the traffic levels. That’s the reason you also need to look at the quality side of the coin.

You need to find markets with good traffic levels and good visitor values.

Traffic data

To get the traffic data we will use the Google’s free

1. Keyword tool

2. Edit the “Results are tailored to” [select language], [select countries]

3. Type in single keyword

4. Tick “Use synonyms” box, and tick “filter my results”

5. Tick “Don’t show ideas for new keywords. I only want to see data about the keywords I entered.”

6. “Approx Avg Search Volume” box indicates how many people are searching in this market each month

The next step is to calculate the Market Value by looking what each visitor is worth.

Actually, it is not difficult as google will help you to get an estimate. The riddle’s answer is the Cost per Click figures out of Google Adwords.

Things you need to know when it comes to calculate the customer’s value is:

The more an advertiser is willing to bid for a customer, the more the visitor is worth. In plain language: if advertisers is paying 1$ per click to get the #1 position in Google, he’s making at least $1 per visitor on average.

The next steps will show you how to work out the cost-per-click figure for #1 position and then estimate the maximum value of visitors in a  market.

After determining the traffic details in your specific market you should see

Visitor’s value

7.  Drop-down box “Show/hide columns“

8.  Select “Show Estimated Avg. CPC“

9. “Show Estimated Ad Position“

10. Select in “Calculate estimates using a different maximum CPC bid:” your currency

11. Type your estimate and “Re-calculate”

12. Check the figure “Estimate Ad Position” says “1-3″

13. Use the figure “Estimate Avg. CPC”

The Formula

Approx Avg Search Volume (Step 6)

(x multiplied by) Estimate Avg. CPC (Step 13)

= Total Market Value

If you need to compare different markets this formula gives you the foundation to determine which market is more profitable.


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1 comment so far ↓

#1 sunnyshine on 11.24.09 at 7:12 am

thank you for the good article.

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