If you’re the type of SEO who builds and markets a variety of sites, there’s something very satisfying about spotting an area that few people occupy, and making it your own!
There are various software programs available that help you find niches, often based on finding keyword terms with high traffic and low, or no, PPC bids. These tools can be very useful for keyword list building, however finding great niches requires a little more analysis to establish viability.
Let’s take a look at a few ideas on how to weed out the most lucrative possibilities.
It’s not necessary to pick an area you’re interested in, but there are strong reasons to do so.
If you’re passionate about something, you’re more likely to go the extra mile, especially when the going gets tough. Any endevour involves a period of struggle where it’s difficult to see the light at the end of the tunnel, and often the only thing that keeps us going is sheer force of will. If you’re interested in what you’re doing, it’s easier to ride out this period.
This doesn’t mean you must pick an area you already know. You could pick an entirely new area that you’d like to learn more about. Make a list of areas that appeal to you. Think about business transactions and purchases you have been involved with, and see if any hold appeal in terms of interest, as if your aim is take make money, it’s important that any niche you choose has a commercial imperative.
Make a list of areas you’re interested in, or would be interested in learning about. Next to each topic or keyword term, outline a burning problem that needs to be solved associated with that topic. For example, the term “fishing” may be associated with the problem “how can I compare fishing vacations easily?”.
It is more likely you will find a lucrative niche if you attempt to solve a real problem for people. Be careful to avoid imagined problems. For example, we might find that there are no rasberry-flavored beer available, which may well be an untapped niche, but a lack of raspberry-flavored beer isn’t a real problem for people.
Once you have a list of topics you’re interested in, along with associated problems that need solving, ask yourself how much you know about each area.
Obviously, you’ll save time if you already know a lot about an area, and it’s unlikely you’ll be able to exploit a niche if you don’t know much about it. It’s never a great position to be in where the customers know a lot more about a product or service than you do!
You’ll likely make your money in one of five ways: advertising (i.e. adsense), affiliate, selling services, selling information, or selling product.
You may combine them, too, of course. Each has pros and cons, in terms of what suits your circumstances. Do you have room to hold stock? Do you enjoy direct contact with customers? Do you want full control, or are you happy to hand over fulfillment to a third-party?
Does the niche have appropriate suppliers that match the type of operation your wish to run?
It may sound obvious, but not everything is suited for selling over the internet. Gas, for example.
There may be a good reason the niche you’ve spotted hasn’t been tapped. Perhaps it just doesn’t work on the internet. This is why it’s important to test market before you dive in deep. Try setting up PPC campaigns that lead to a site designed to collect, say, e-mail sign-ups. This will help you gauge the level of interest, to a degree, without the cost of gearing up the back end.
Cut the losers early, run with the winners.
When it comes to online commerce, one important aspect to consider is the access your demographic has to credit or debit cards. The children’s/youth market, for example. Or people with poor/no credit.
In some international markets, credit card use isn’t as widespread as in the US.
As you probably know, there are three types of searches: navigational, informational, and transational.
Unless you’re looking for a hobby niche, and whilst there is some cross-over between the search types, you’ll likely focus on areas where the intent is to transact – to perform a web-mediated activity, and that that activity has commercial intent.
Clues regarding search type are hinted at in the keyword phrase, such as “buy x”, “where can I order y”, are transactional, whereas “Microsoft” is likely navigational. There are many less overt permeations, too of course, however the point is to hone in on keywords that hint at commercial endevour.
Get a rough guide of how much a niche might be worth. This will give you a feel for how much you can spend carving it out, or whether your time may be better spent on a more lucrative niche instead.
It’s a good idea to look up the Adwords bids and traffic volumes. The higher the bids, the more lucrative an area tends to be, however if your niche is genuinely undiscovered, then it’s likely to have traffic volume, but little bidder competition, as few other advertisers have spotted it.
Again, you can test market a niche using PPC and a basic website, where the aim is to see how many people click through from an advertisement, and perhaps show a level of buying interest. Once you have some idea of traffic, you can guess at a likely conversion rate – common industry guesstimates are around 3-8% – and then run your numbers. Conversion rates can be a lot higher if what you offer is in high demand, and in short supply, of course.
Sometimes, the figure you end up with might be too low for you to make any money, but it’s good to know that now, rather than commit a lot of time and resources to an unworkable niche.
Is the market you plan to enter rising or falling? You can make money in either market, of course, but people tend to want to enter either fast rising new markets, or markets where demand is fairly steady, as opposed to diminishing.
If you’re lucky enough to have found a niche with no competitors, well done. However, it is likely you’ll have at least some competitors. It pays to know what they’re doing, so you can emulate them, and go one better, or blow them out of the water by offering something they are not.
Look to see who is advertising via PPC, and who is doing SEO in your niche. How agressive are they? What approach are they taking? Can you make better offers that they make? Can you modify the niche slightly so you’ve not competing directly with them? Your customers will compare offers, so make sure your offer is competitive.
Zynga just filed for its much-awaited $1 billion IPO and know we know how much founder Mark Pincus and the company’s investors own in the company. Zynga’s investors include Reid Hoffman, DST, Google, Tiger Global, Kevin Rose, Kleiner Perkins, Union Square Ventures, Andreessen Horowitz, Peter Thiel, Foundry Group and IVP.
Pincus is the largest shareholder of Zynga, with 16 percent of the company. Kleiner Perkins owns 11 percent of the company; IVP owns 6.1 percent; Union Square Ventures owns 5.5 percent; Foundry owns 6.1 percent, Avalon Ventures owns 6.1 percent and DST owns 5.8 percent.
Pincus makes a salary of $300,000, and Van Natta earns a salary of $200,000.
Zynga finally filed for its IPO today, and we now we get to take a look at its financials. At a high level, the company made nearly $600 million in revenues last year, and $90 million in profits. It grew at an incredible pace, with revenues growing 392 percent in 2010, up from $121.5 million in 2009 (and up from $19 million in 2008).
In just the first quarter of 2011 alone, the company’s revenues reached $235 million (or a $940 million revenue run-rate), and that was up 134 percent from the first quarter of 2010.
The good news for investors is that Zynga actually makes a profit. After a $53 million loss in 2009, it swing to a $90 million net profit in 2010. And profits grew 84 percent in the first quarter of 2011 to $11.8 million.
Zynga makes almost all of its money from the sale of virtual goods (95 percent of Q1 2011 revenues), and the rest is advertising. Advertising revenue grew 321 percent in the first quarter to $13 million, while online gaming revenue grew 127 percent to $222 million.
Zynga also reports a non-GAAP (Generally Accepted Accounting Principles) measure, which it calls Bookings. In this sense, it is joiningother recent Net IPO filers like Groupon, which also put forth their own non-GAAP measure of revenues. In Zynga’s case, Bookings make it look even bigger. For instance, total Bookings in 2010 were $838.9 million, or 40 percent higher than its $597.5 million in revenues.
Zynga defers the recognition of all of its revenues, which is actually a more conservative accounting approach and is a godo thing. But it still wants to get credit for what it could have recognized, so it reports Bookings as well. It’s kind of like a way for Zynga to pat itself on the back in its financials.
Here is how Zynga explains Bookings in the S-1:
Bookings is a non-GAAP financial measure that we define as the total amount of revenue from the sale of virtual goods in our online games and advertising that would have been recognized in a period if we recognized all revenue immediately at the time of the sale. We record the sale of virtual goods as deferred revenue and then recognize revenue over the estimated average life of the purchased virtual goods or as the virtual goods are consumed.
Advertising revenue is treated the same way.
Some other key metrics investors will want to keep an eye on (all numbers are as of March 31, 2011):
Zynga has just filed its S-1 with the SEC, indicating that the company plans to go public. According to the filing, Zynga aims to raise as much as $1 billion, but this could be a place holder amount. Updating
According to the filing Zynga has 60 million daily active users in 138 countries. 38,000 virtual items are created every second and game players spend 2 billion minutes a day on Zynga games. The company had $597 million in revenue in 2010, and posted revenue of $235 million in the first quarter of 2011.
Zynga is profitable, posting $90.6 million in net income in 2010, which is a a 28% net margin. In Q1 of 2011, the social gaming giant reported $11.8 million in profit. Zynga has $995 million in cash on hand.
Founder Mark Pincus writes in the filing of the company’s operational philosophies: Games should be accessible to everyone, anywhere, any time; Games should be social; Games should be free; Games should be data driven and ; Games should do good.
Underwriters include Morgan Stanley, Goldman Sachs, Bank of America, Barclays Capital, JP Morgan and Allen and Company.
Zynga’s investors include Reid Hoffman, DST, Google, Tiger Global, Kevin Rose, Kleiner Perkins, Union Square Ventures, Andreessen Horowitz, Peter Thiel, Foundry Group and IVP.
For today’s giveaway, we are giving away one Xbox 360 4GB Console with Kinect and two tickets to our 6th annual summer party at August Capital. The Xbox 360 Console comes with the Kinect sensor, built in Wi-Fi, Xbox LIVE, the Kinect Adventures game and more. Tickets to our summer party at August Capital are selling out fast, so this is a great way to win tickets plus something a little extra. The winner of this giveaway will win the Xbox 360 Console and the two tickets.
If you want a chance at winning them, make sure you follow the steps below.
1) Become a fan of our TechCrunch Facebook Page:
2) Then do one of the following:
- Retweet this post (making sure to include the #tcaugustcapital hashtag)
- Or leave us a comment below
The contest starts now and ends July 3rd at 7:30pm PT.
Please only tweet the message once or you will be disqualified. We will choose at random and contact the winner this weekend with more details. This giveaway is for U.S. only and does not include airfare.
A special thanks to DailySteals.com for the Xbox 360 Console with Kinect.
As we heard from Mark Zuckerberg this week, Facebook is revealing something ‘awesome’ next week. And the invite to the news event just rolled into press inboxes today. The event will be held next Wednesday at 10 am in Facebook’s Palo Alto office.
Reuters reported yesterday that Zuckerberg told reporters at the company’s Seattle that Facebook was planning a big announcement for next week, it would be ‘awesome’ and the product was created at the Seattle office.
Possibile product launches for the news event could be the company’s much awaited iPad app or a new mobile photo app. We know for sure is that it won’t be Project Spartan, the HTML5-based app platform that Facebook has been working on with a small group of outside developers in secret for months. As my colleague MG Siegler wrote yesterday, Seattle’s Facebook office houses teams with deep ties to mobile, so that could be a clue as to what will be announced next week.
So we have one more small piece to the puzzle. We’ll be covering the launch next week so be sure to check back on Wednesday, July 6.
Loopinsight has an interview with HP’s developer relations guy, Richard Kerris, where he basically says that WebOS is HP’s enterprise strategy, not their consumer play. He says:
“We think there’s a better opportunity for us to go after the enterprise space and those consumers that use PCs,” said Kerris. “This market is in it’s infancy and there is plenty of room for both of us to grow.”
“We think the world of Apple and have the utmost respect for their products,” said Kerris. “It would be ignorant for us to say that we are going to take it [the market] away from Apple.”
Clearly the Android Market is growing rapidly, and there’s no reason to even mention the Apple App Store, which just breezed by the 100,000 iPad app marker. But we can’t leave the little guys out, especially when their growth is also relatively impressive.
Another day in Europe, another accelerator launched. The Difference Engine – an accelerator programme in the North of the UK we covered last year which borrowed heavily from the YCombinator/TechStars model – has itself ‘pivoted’, announcing a rejuvenation and a new name. The new Ignite100 will be a startup accelerator programme with a £1m fund that will invest up to £100k per team for ten teams later this year in the North East of England. The programme set for a September launch and will take applications from
across Europe anywhere.
As you may have heard, Apple’s new version of its video editing software, Final Cut Pro X, has received considerable backlash from users. And as Jim Dalrymple reports, video editing rival Adobe has been welcoming these disheartened Final Cut Pro users with open arms. Now Adobe is taking it one step further, announcing a formal ‘switching program’ for any Final Cut Pro or Avid Media users.
Adobe says that anyone who has purchased any version of Apple Final Cut Pro or Avid Media Composer and want to switch to Adobe’s video tools (Production Premium or Premiere Pro) will be eligible for a 50 percent savings on Adobe Creative Suite CS5.5 Production Premium or Adobe Premiere Pro CS5.5.
Adobe has been pretty active in its marketing efforts towards disgruntled Final Cut Pro users. For example, the company has posted a number of ‘success stories’ of Premier Pro users who have made the switch.
Of course, not everyone hates the new version of Final Cut Pro, so it’s unclear how many ‘switchers’ Adobe will gain from the backlash. Also, check out Conan O’Brian weighing in on the Final Cut Pro X debacle.
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