The Importance of Market Research for Internet Marketers

All too often, people get into internet marketing with the aim of making a fast buck and, after learning a few basics of affiliate marketing, dive straight into promoting some affiliate product without any thought as to how to build a sustainable online business. This may be summed up as the Ready…Fire…Aim, approach.

The truth of the matter is that building a successful online business, indeed building any type of business, requires planning and that planning starts with choosing the right market. In the context of internet marketing, choosing the right market is in fact the first of three steps to creating a marketing funnel, the number one method of making money online.

Guiding Principles

Before entering into a discussion of how we go about choosing the right market, it is important to know that there are three principles that should guide our efforts in choosing a market, as follows:

Principle 1 – the market should be large enough.

In other words, the market should have enough people to yield lots of prospects and customers. The word “large” is of course relative in this context. For instance, there are millions of people looking for ways to get fit and stay healthy, making the Health & Fitness market one of the largest on the internet. However, within the Health & Fitness market, there are “smaller” niches such as the Diet, Fitness, Supplements, Remedies, Healthcare and Anti-Aging niches, which are vast markets in themselves that can be broken down further into smaller niches.

Another example of a large market is Wealth Creation, which can be broken down into the Make Money Online, Investing and Insurance niches. These may also be broken down further into relatively smaller niches.

The Relationships market is another big one. This includes Dating, Family History, Networking, Parenting and Family Relationships.

Then there is the Hobbies Market which covers Sports (Football, Golf, Baseball etc.,) Arts and Crafts (Fabrics, Woodworking, Plants and others,) Knowledge (College courses etc.,) and the Outdoors (Hunting, Fishing, Scuba and others)

For a more comprehensive list of profitable markets download my “156 Hot Markets” resource guide.

Principle 2 – the audience should be willing to spend money

This may seem obvious, but there are lots of examples of people who may be interested in a particular topic but may not be prepared to spend money on it. Examples that come immediately to mind include freebie seekers and people that are searching the internet for educational purposes.

Principle 3 – it should be easy to reach your market

In short, how hard or expensive is it to promote yourself to your intended audience? It is very important that you should be able to put yourself or your offer in front of your starving crowd.

Therefore, market research involves the use of certain techniques to put specific measurements against each of these three principles, thus enabling us to pick our market in such a way as to avoid the unprofitable.

How to Choose a Market

Having shed some light on the principles that should guide our market research efforts, the question arises as to how we choose which market to enter, amongst the many and varied available. One approach is to follow your passion, particularly if you are just starting out as an online entrepreneur.

Following your passion is advisable because, as we have seen, there is a vast range of markets to choose from and starting with a subject you are passionate about will make the experience more enjoyable. It will also give you the motivation and enthusiasm to overcome some of the challenges you will inevitably face during your journey.

Another benefit of starting with your passion is that you will come across as genuine when communicating your knowledge about your subject.

You Are an Expert

Another approach to choosing a market is to look at your own experience. In the introductory paragraph of the About page of this blog, I say that, because we all experience life uniquely, we all have something valuable to offer our fellow Human Beings. So why not use your life experience as a basis for your business by setting up a blog teaching people what you know about a particular subject. With experience you can turn you knowledge into paid information products like eBooks, video and audio courses that you can sell online to generate passive income.

No subject is too small in this regard. You can create a blog and information products about just about anything. What have you done in the world of employment, sport and recreation, hobbies and other walks of life? Could you articulate your experiences and teach others how to do what you know? What about the world of social media? As the world embraces social media, there are many opportunities to teach people how to make use the many platforms like Facebook, Twitter and others that are now the everyday tools of life.

The Three Step Market Research Process

Having identified a potential online business opportunity, the next step is to determine if it will be profitable for you by researching the market. Keeping in mind the three principles of market research alluded to above, the goal is to see if there is a large enough market with plenty of willing buyers well within your reach.

Therefore, online market research essentially involves providing answers to the following questions:

1 How big is the audience?

Searching the internet involves the use of keywords. People type into search engines like Google and Bing, a word or phrase that represents, as best as they see it, the item or subject they are looking for. For example a man who is looking for romance may type the words “dating tips for men” into Google and a list of websites relating to dating will appear in the search results.

2 Are the people in the market motivated to spend money?

The answer to this question is equally important because the key to online selling is audience engagement. You want to be sure that you are entering a market that is already vibrant and doing lots of trade for you to cash in on.

3 How competitive is the market…how hard is it to reach your intended audience?

This is a very important question because if a market is costly to reach, in terms of either time or money, then it will not be profitable to you.

There are two factors to consider when evaluating if a market is reachable.

The first is the number available promotion sources or outlets. Some markets, like the weight loss market, have more available places to promote your service than others.

The second is promotion costs. Some markets have relatively high promotional costs and you have to be sure you have the budget, in terms of either time or money or both, if you want to be a player in that field.

Keyword Research

“Keyword Research” is the term used to describe the various tools and techniques employed in analysing and evaluating the vast amount of data generated by the daily search activity of millions people on the internet. Keyword Research is a big subject all of its own, way beyond the scope of this post. Suffice to say market research tools exist for the assignment of scores to search engine results as a means of determining whether a market is suitable or not.

In conclusion I would reiterate the importance of conducting some proper market research before venturing into a particular marketing, even if that market intuitively looks attractive. I have aimed to highlight the key factors to consider when choosing a market and how these have an enormous bearing on the profit potential of your chosen market. Thinking about them before diving into any market will save you time and help you to avoid making costly mistakes.