If you have an idea for an online business you often are faced with the option of designing your website for a broad market or a niche market. Do you want to sell Sporting Goods or exclusively Football Equipment? Just like in the real world, there are benefits of each option, but online has a different set of issues that will factor in your website’s success. Whether you are selling an actual product or simply building a website of information, you need to consider whether a broad market or niche market is the way to go.
In researching our competition I often find that they have decided to go for a broader market while still serving the same demographic that we do in our niche market. In most cases I find that they are less successful in marketing to a wider market than we have been marketing to a niche market. For example, Fido Finder which was built to market to “lost dog” owners has been more successful in than other “lost pet” website (and also more successful than any “lost dog” website). We get more animals registered per day than even the top “lost pet” websites. We learned early on that there is a benefit to marketing to a niche market when it comes to online marketing.
For most new websites your traffic will come in this order: online ads, word of mouth, and search engine results. Due to the Google algorithm, natural (free) Google search results will be one of the last ways that you get traffic to your new website. In the end, natural search results will be the king, but it takes time to get there, often many years. Up front you will be paying for most of your visitors and then enter a pattern of paying for something more like 15-20% of your visitors while getting the rest from word of mouth and natural search results. Your goal should be to end up with the majority of your traffic coming from word of mouth and natural search results. Niche marketing can get you there.
Any new website has to advertise to get started, period. You’re not just going to be on the news after a week of having a website. Using Google Adwords as a model, the cost of your ads will be determined by the popularity of the keywords that you want to see your ad next to. If you decide to sell Sporting Goods you have to compete for space on Google’s search results with every other sporting goods website. Some of these websites will be willing to spend much more per click than you are willing to spend on your startup. If Dick’s Sporting Goods, Sports Authority, and Academy are all bidding $0.30+ a click you’ll have to bid up there with them in order to get a decent volume of visitors from your ad. Conversely, advertising for “football equipment” produces a different subset of advertisers. East Bay, a large catalog company, is the only big company competing for that keyword. You can now bid for the number two spot without losing money on each customer acquisition. In general, niche Pay-Per-Click (PPC) keyword marketing will be cheaper than broad keyword marketing. Since online ads will be your first source of traffic it’s much cheaper to start a successful niche website versus a broad market website.
Word of Mouth
Links from Facebook and other social websites have become a top source of visitors to all of our websites over the last 2 years. Having a Facebook presence (page) definitely helps, but word of mouth via social networking is a very good source of traffic without having a popular Facebook page. Having Facebook users, bloggers, and people on Twitter talking about your website all fit under Word of Mouth as far as online goes. Having a niche website actually increases your chances that users will start talking about your website with their friends, online and offline. Although your market might be smaller, the passion of your customers is usually higher. Everyone knows that one friend they have that is in 5 football fantasy leagues, but rarely do we know that we have a friend who plays 5 different sports. People who are passionate about one specific thing tend to discuss it more often, with a higher energy, than those who have a more rounded interest. Getting links from football-related Facebook groups is much more likely than getting links for a general sporting goods website from a general sports-related Facebook group, for example. Online forums fall under this category as well. Most online forums are built for a specific niche. Becoming a well-known website within those niche forums could garner a great deal of traffic. It’s just more likely that your startup will spread like wildfire through word of mouth around these niche markets than in a broad market.
Once your website is established there is no doubt that search engine results are the king of traffic. The most important thing you can do for your new website is focus on becoming #1 for your keyword. It’s going to take 1-3 years for most websites to even have a chance, but you should do the work to get there. It’s a lot of work to get the #1 listing but if you get it it’s worth every penny. You’ll get 2-5x the traffic from being #1 versus #5 for the same search term. This means you’ll spend less money on online advertising as you’re getting so much free traffic. A high website ranking is based on your website score. Good Search Engine Optimization (SEO) will greatly increase your chances of being in the #1 spot.
In SEO you optimize your website for a specific keyword or set of keywords. When people search for XYX you want your site to show up. This means you have to have this keyword all over your website as well as have this keyword in or around all the links that link to your website. If you decide to build a Football Equipment website all the links to your website will have “football” in them, and often “equipment”, “gear”, or some other keyword accompanying “football.” This will make your website rank very well for “football equipment” if you get enough links and perform all the right on-page optimization techniques. If instead you build a Sporting Goods website and want to rank well for “football equipment”, “basketball shoes”, “baseball bats”, “soccer balls”, etc, you have a lot more work to do, and are frankly less likely to be successful at ranking for all, or any, of those keywords. A website that is strictly SEO’d for “baseball bats” will usually rank higher than the baseball bat section of your sporting goods website. In some markets it’s much more likely for a person to actually search for the niche keywords than the general category.
Online it’s much more important to have a website that can do well with SEO techniques than a website that mimics a real world store. If your website concept does not SEO well you will always be paying high dollar for advertising and have a hard time ever getting “free” visitors. The most valid site for a keyword will always show up at the top of the list. For example, although we all know Amazon is the king of online books, etc, Barnes & Noble actually shows up first in the natural search results when you search for “books” in Google. This is because all of their website content and links to their website focus around the keyword “books”. They get all that free traffic for ranking well for “books” while Amazon has to rely on other methods (word of mouth/advertising/brand recognition).
Unless you have a large marketing budget it’s going to be hard to get your broad market website to get the same amount of traffic as the #1 site for a subcategory of products you sell. For example, although my company could have created a Lost Pets website, it is more successful to develop a Lost Dogs (FidoFinder.com) and Lost Cats (TabbyTracker.com) website separately because of the factor of search engine traffic. Each website does better in registering a high volume of dogs and cats, respectively, than any other Lost Pets website does. The same goes for our website Naming Force. Although other websites offer product naming among their slew of crowdsourcing options (logo design, copywriting, website design, etc) we get more naming projects than any of our competitors do. When you search for “crowdsource naming” we come up first. Our website also appears before our competitors for other keywords such as “business names”, etc. We focus strictly on naming businesses, and Google knows that.
This is a good except from Wikipedia about niche marketing online:
“An often used technique for affiliate marketers is Internet-based niche segments of larger markets, referred to as niches, a website can be developed and promoted quickly to uniquely serve a targeted and usually loyal customer base, giving the affiliate a small but regular income stream. This technique is then repeated across several other niche websites until a desired income level is achieved. A bigger niche is harder to market to as the expense of online advertisements increases according to the popularity of the keywords used (on Adwords, for example).”
Online niche marketing is the fastest method of growth for a new business. Getting a business off the ground is more important than the overall potential to serve a business has. Just because you can do everything doesn’t mean you should market yourself as being able to. If you never make a profit it doesn’t matter how versatile your website or business was. Online, niche marketing is the way to go for rapid, affordable, marketing of a business. If you decide to expand on your initial product offering, the way Amazon has, that’s fine, but starting out by being known for selling one thing, or one group of things, is much a cheaper option and gains traction much quicker. This will increase your success rate ten-fold.