How to do Internet Market Research to Check Your Product or Niche Competition
In the previous step, you would have found niches and keywords which are in high demand. But that is only half the story.
The hottest products or niches on the web usually have a lot of websites marketing them. The more of these websites there are, the harder it is for your website to get visitors or make an impact, and for you to succeed.
Which is why, short of doing expensive surveys, the number of websites found for any search term is a useful measure of competition.
Competition should not discourage you from selling a product or service, though, as it is not completely a bad thing. For one, it shows that this is a profitable niche, else others would not be spending time on it. For another, if you're planning to make money by selling ads on your website, you are assured of having advertisers.
It is when the competition is too fierce, the market too saturated, that you might want to re-consider your niche selection. While it is possible to play even in a highly competitive niche market, it is very time-consuming to try and you could get bogged down in it.
You can either look for a different niche, or find a sub-niche or a different slant within your selected niche. For example, 'wedding favors' looks very competitive. But a sub-niche like 'beach wedding favors' has quite good demand without as fierce a niche competition.
A sub-niche can be more profitable too. An e-book on dog training might sell for $15. But one on training Border Collies could sell for 2 or 3 times that with less effort.
The key to a profitable website, therefore, is to target a niche market or product with the highest demand relative to supply or competition. That's why you need to do internet market research to ascertain the niche supply.
(See Niche Marketing Research - Market Demand if you came directly into this page and want to know how to find the demand for your proposed niche market or product.)
Internet Market Research to Ascertain Niche Supply
The previous page explained how to determine your niche keyword demand figures. To determine the corresponding supply or niche competition online, you find out the number of web pages satisfying each keyword or phrase for which you had found demand previously.
Comparing demand to supply for each keyword or key phrase will then give you an idea of the profitability of each.
Start by making a list of relevant search terms you found in the previous step which had what you'd consider sufficient demand. This is anywhere from 10 upwards per day, for each term, depending on how competitive the topic is. Basically the less competitive it is, the lower the numbers you can accept.
Tabulate those terms and their search demand numbers into a table or MS Excel spreadsheet in a format something like this:
Keyword / Key Phrase
Demand Per Day (DD)
Supply (SS)
Profitability (DD / SS)
wedding favors
1,923
wedding party favors
230
unique wedding favors
212
personalized wedding favors
211
beach wedding favors
161
wedding shower favors
138
ideas for wedding favors
117
candle wedding favors
106
fall wedding favors
101
Table 1: Internet Market Research - Market Demand
Use the Google tool to look for other terms. Google lists related words and synonyms that people use, like 'favor boxes', 'bridal favors', and so on.
Then open any search engine like Google or Yahoo, and enter the search terms one at a time, in between quotes, as in the example below for "beach wedding favors". (Using quotes tells search engines to bring back only results containing that exact phrase.) The result gives an idea of number of web pages with that term, which is a rough indication of supply.
Fig. 1: Internet Market Research using Google Supply
Don't be put off by what appears to be extremely high supply figures. The actual numbers are usually less than 10% of the reported figures – the rest are duplicates or spam or junk.
Then do a comparison of profitability by putting in the supply figures into the table you made earlier, and dividing demand by supply, then multiplied by 1000 (to make the end result easier to read).
Keyword / Key Phrase
Demand Per Day (DD)
Supply (SS)
Profitability (DD / SS)
wedding favors
1,923
6,160,000
0.3
wedding party favors
230
198,000
1.2
unique wedding favors
212
512,000
0.4
personalized wedding favors
211
194,000
1.1
beach wedding favors
161
99,100
1.6
wedding shower favors
138
101,000
1.4
ideas for wedding favors
117
12,600
9.3
candle wedding favors
106
97,900
1.1
fall wedding favors
101
54,200
1.9
Table 2: Internet Market Research - Niche Supply & Profitability
From the table, you'd get a good idea of which keywords or phrases have most demand compared to supply. You then shortlist those keywords, and create web pages around them.
Having said all that, there's a school of thought that holds that amount of niche competition is not so important. That demand is more important, as it limits how much traffic you can get. You can leapfrog the competition by using ads or other means.
Conversely, another group argues for the long tail keywords –- terms with low demand, but correspondingly very low supply, so it's easy to rank well.
Never mind if traffic volume is small, they say. At least you get visitors. If you have lots of such keywords, they add up. For this strategy, you'd have to look beyond the most popular keywords, to those toward the end.
Perhaps you could try to have the best of both worlds by marrying the 2 approaches -- have the competitive keywords as a long term goal, but use the long-tail keywords to build up traffic first.
Free Keyword Research Resources
Internet market research is a very important skill to learn in order to build the most profitable web sites you can. Here are a couple of free tools that are useful:
WordTracker has created a PDF e-book that helps people with keyword research. It provides tips, techniques and insights into getting targeted customers. Can be downloaded free at
WordTracker Keyword Research Guide
. (Right-click to open in new window.)
If you're having trouble deciding between niches, SBI provides a free decision-making tool that simplifies difficult decision-making. (You can use it for any other decisions you need to make too!) See SBI Choose It.
Done the research and found what you think will be a profitable niche or product? Let's now go on to Make Your Website!
