Where to Find Your Data

So where do you find Visitor Values and Traffic Level data to help us work out the potential profits in a market?

Well, these are two separate pieces of information that you will need to gather...

Getting Traffic Data
It's easy to get a highly accurate yardstick of online traffic levels now that Google has released their search volume data.

Using the data from Google's Keyword Tool, we can see an accurate yardstick of how many people search for a particular keyword every month.

This gives us a very accurate indication of how much traffic (and therefore how many potential customers there are) in any market.

How to use the Google Keyword Tool to get traffic levels in your market:

1. Go to: https://adwords.google.com/select/KeywordToolExternal

2. Up the top, you'll see a bit of text that says "Results are tailored to...".

3. Click the "Edit" link beside this, and select "English", then "All Countries and Territories" (or the appropriate country if you're want data specific to a particular country - good when your target market is based in a particular country.)

4. Type in a single keyword that best describes the market.

5. For example, if you wanted to research the Car Insurance market, use the keyword Car Insurance

6. Tick the "Use Synonyms" box, and tick "Filter my results".

7. Enter the capcha (the funny-looking letters that appear in the picture) into the box provided.

8. Then tick "Don't show ideas for new keywords. I only want to see data about the keywords I entered."

9. Press "Get keyword ideas"

10. The "Approx Avg Search Volume" box will give you an indication of how many people are searching in this particular market each month.

Getting Visitor Value Data

Next, we want to look at what each visitor is worth.

Ι looked at a lot of options for this, and finally settled on a simple, but ingenious solution.

The solution was to take Cost Per Click figures out of Google Adwords.

If you haven't heard of Google Adwords before, it's a marketplace for advertisers to essentially buy visitors to their web-sites.

Advertisers create an ad, and choose how much they are willing to pay for each visitor - and they only pay when someone clicks on their ad - so if Google Adwords doesn't send them any visitors, the advertiser doesn't pay a cent!

This means advertisers have less risk - they only need to pay when their ad is effective.

The benefit for advertisers to pay more for their ads is Google gives prominence to advertisers who are willing to pay more per click for visitors.

For Google, this is a way of maximizing their ad revenue.

For advertisers, this is a way of maximizing their clicks.

So advertisers will compete and outbid each other for the most prominent ad positions, in order to attract the most customers.

This makes Google Adwords like a stock market for visitor traffic!

The more someone is willing to bid for a visitor, the more that visitor is worth.

No visitor wants to go bankrupt, so we can be pretty certain that if the guy in the #1 ad position in Google is paying $2 per click, he's making at least $2 per visitor on average!

So if we can work out what the cost-per-click figure is that we would need to pay in order to achieve the #1 position in Google, we can estimate the maximum value of each visitor in a
particular market.

How to get Cost per Click figures using the Google Keyword Tool:

1. After following the steps detailed above (under "How to use the Google Keyword Tool to get traffic levels in your market"), you should see a drop-down box that says "Show/hide columns".

2. Click the "Show/hide columns" box, and select "Show Estimated Avg. CPC"

3. Click the "Show/hide columns" box again, and select "Show Estimated Ad Position"

4. In the "Calculate estimates using a different maximum CPC bid:" box, select the appropriate currency - the currency you plan to sell your product in.

5. In the box beside your chosen currency, type 99 and press "Re-calculate"

6. Check that the figure in the "Estimated Ad Position" column says "1-3"

7. The "Estimated Avg. CPC" figure displayed here is the figure we'll be using.

Calculating Total Market Value

Once we have estimates of Traffic Levels and Visitor Values, we can put them together using a very simple formula:

Traffic
(x Multiplied by) Value per Visitor
----------------------------------------
(= Equals) TOTAL MARKET VALUE

This tells us the total monthly value of visitors searching for a particular keyword (or keywords) in a market.

(Because Google's Traffic figure is a monthly figure.)

So, let's try this calculation out, using Scrapbooking as an example:

Τhe average monthly traffic figure for the Scrapbooking market ιs around 2,740,000;

And we know that people are paying up to $0.85 per click - just to get ONE of these 2,740,000 people to their web-site.

And we can use these figures to estimate the Total Market Value using the equation:

Traffic 2,740,000
(x Multiplied by) Value per Visitor $0.85
----------------------------------------------------
(= Equals) TOTAL MARKET VALUE $2,329,000

So 2,740,000 x $0.85 = a Total Market Value of $2,329,000 per month, or $27,948,000 per year!


18
So 2,740,000 x $0.85 = a Total Market Value of $2,329,000 per
month, or $27,948,000 per year!

Don't Get Greedy!
OK - now that you have this knowledge, it's important to use it wisely.

That's why I give you this warning:

Don't Get Greedy!

It's easy for someone to let their greed gland secrete, and start counting the money they'll make - before they've made it!

If you feel your greed gland getting away from you...

STOP IMMEDIATELY!

Just because there's $28 million dollars worth of traffic around for Scrapbooking, it doesn't mean you are likely to make $28 million dollars per year out of this market.

You're not. I'm sorry if I've burst your bubble.

You're more likely to make a tiny portion of this (so don't go buying dune buggies, waterfront mansions or small nations just yet!)

After all, the figure represents the total value of all Google traffic in that market - which is shared between thousands of web-sites ( it's shared unevenly - with high ranked web-sites getting more traffic!)

How big is the portion you're likely to capture?

Well that all depends...

  • on what you price your product for;
  • on the competition in your market;
  • on your visitor-to-sales conversion rates;
  • on how many competitors exist in the market;
  • on how easily you can achieve high rankings;
  • on the strength of competition in that market;
  • on how hard you work;
  • on how easily you can dominate your niche;
  • αnd on a stack of other factors that can influence your business...

But all things being equal - if you have two markets with similar levels of competition, where you sell a similarly priced product at similar profit margins - you can generally expect that the market with the higher value will be more profitable.