One of the struggles that many people have when seeking to build niche websites, is actually finding a market that has lots of advertisers that pay well. This is particularly important if you are monetizing your site with Google Adsense or other forms of advertising.
One method that I have discussed in detail to find those keywords that pay well, is using the Cost Per Click (CPC) displayed on the Google Adwords Keyword tool. However, this number can sometimes be deceiving. For example, I currently have a website that is based on a keyword that has an Exact Match CPC of $1.38 in the adwords tool. However, in reality I am only making about $0.07 or $0.08 cents on average per click! What happened? This caused me to dig a little deeper as to why I could have picked such a low paying keyword when the adwords keyword tool suggested differently.
My 3 Mistakes
I made 3 mistakes – I didn’t look at the broad match cpc, I didn’t look at the amount of advertiser competition (more is better), and I didn’t think about the overall profitability of the market. If I simply would have looked at the broad match cpc, I would have seen that this broad keyword only pays $0.28 rather than $1.38. So, what’s the difference between broad and exact match CPC? Well, usually there is not much difference. However, in this case there was and I now I think its always a good idea just to check both match types. More importantly, I think if I would have looked at the amount of competition a little closer then a red flag may have gone up for me.
Check the Competition
The level of competition available on the Google Adwords keyword tool shows the number of advertisers that are paying to display ads based on this keyword. Google only shows whether the keyword is Low, Medium, or High competition (and the green bar displays how low or high). So, if you are building niche websites you actually want to see High competition in this case because that means more advertisers are willing to pay for this keyword – more advertisers usually means there is more money for you in the market.
So, if I would have looked at my keyword, I would have seen low competition and known that the $1.38 CPC was probably an anomaly. If there are only 3 or 4 advertisers, and one is bidding $1.50 to be first, but the rest are only bidding $0.05, then the chances are that you are going to be getting $0.05 clicks on your website. What you need is lots of competing advertisers bidding over $1.50 or more to really start to expect to see $1.50 clicks on your site. If the competition is High for a keyword, and the CPC is also high, you can start to feel a little more comfortable that the keyword data is more reliable.
Is the Market Profitable?
Finally, its also important to look at the overall profitability of the market that you are going into – not just the single keyword. If can see that the overall market has lots of money spent on advertising in it, you can be more certain that the keywords you are targeting will pay well. In fact, even if you discover keywords that say they only pay $0.05 or $0.10 – they actually might be worth targeting if the overall market has a lot of ad dollars being spent!
For example, a HUGE amount of money is spent in the education market (think University of Phoenix, etc). In fact, University of Phoenix spends over $20 million per month on Online ads (its probably much more now as this article is from 2008: http://paidcontent.org/article/419-displays-big-spender-university-of-phoenix-category-continues-to-wait-f/) Its possible to find keywords in the online education market that only have a CPC of $0.05 on the adwords tool. In fact, I just found one – “online schools for education” according to the Google Adwords keyword tool only has a CPC of $0.05. I promise you that this keyword pays WAY MORE than $0.05.
The adwords keyword tool shows that similar keywords in this market are paying closer to $5 to $15 on average. So if I were to build a niche website around the keyword “online schools for education” I would fully expect to get paid at the higher CPC – not $0.05.
Broad Match CPC Better?
The reason is mainly because of the amount of money that advertisers are spending in this market. The discrepancy may occur because maybe less advertisers are targeting “online schools for education” specifically; but LOTS of advertisers are targeting “online schools” or “online education”. So, your website will mention “online schools”, so you will still get advertisers for this keyword even though you are targeting “online schools for education”.
Anyway, hope some of that made sense.
So, one great way to find profitable keywords is to simply target those markets that you know have a lot of advertising dollars being spent. This will ensure that you know there are advertisers spending money, and you are sure to get some great CPCs for your sites.
Let me know your thoughts below!