Online Marketing Lesson 33: Targeting Highly Competitive Markets and Niches

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It is perfectly possibly to make money in narrow niches, and for many people, it is also the recommended way. That being said, targeting highly competitive markets and niches can often be the path to huge profits. In this lesson, we will explain why you should or should not target a competitive niche, why you need to think in terms of strategies and not tactics, and we will also list three simple strategies to illustrate the concept.

Notice that we already explained the difference between a market, which is basically a place where buyers and sellers meet to exchange goods and services, and a niche, which is basically a general area of interest. If you are going to sell something, you need to think in terms of markets. If you are going to publish content and make money with advertising or related methods, you need to think in terms of niches. For the sake of simplicity, however, we will use the terms niche and market interchangeably throughout this lesson.

Why You Should NOT Target a Competitive Niche

People who choose to not target highly competitive markets or niches usually defend themselves with one of the three arguments below. These arguments are valid in some situations, but not in others, and we will explain why.

Argument One: “I am more likely to succeed if I focus on a small niche.”

To some extent this argument is true. It is easier to get search rankings and organic traffic in small niches. It is also easier to establish your website as one of the authorities in a small niche. Whether this will represent success or not depends on your goals and on how you define success.

For someone who is just looking to complement his monthly income, for example, a website in a small niche that makes $500 monthly could already be considered a success.

For someone who wants to create an online business and be able to live comfortably with it, however, such a website would be far from a success.

You need to keep in mind that every niche has a ceiling, or a maximum amount of money that you can make with it. The smaller the niche, the faster you are going to hit that ceiling, the less room for expansion you will have.

If you are just getting started with online projects, however, choosing a small niche might be a good idea even if you have bigger plans for the future. This is so because it is easier to learn how things work in a small niche. Your search rankings, for example, will move much faster on a small niche, and this will allow you to get some hands-on experience with the different search engine optimization factors.

Argument Two: “It is better to target several small niches than to target one competitive one.”

It is possible to target a wide range of small niches and be successful with it. There are webmasters, in fact, who will create hundreds of websites targeting very small niches. Each of those websites will often earn less than $20 monthly, but if you add them up the monthly income can become substantial.

The advantage of this method is that once you setup the websites and get them ranked, the income will be passive.

It might sound appealing, but the method also has many disadvantages. First of all setting up and getting hundreds of websites ranked well on search engines is a lot of work.

Secondly, a single, popular website has much more authority than 100 smaller websites, and that authority can be leveraged for a wide range of purposes. It can be leveraged to launch secondary or related projects, to network with influential people in your niche and so on.

Argument Three: “Competitive niches are way too hard!”

Out of the three, this argument is the one that actually is true in most situations. Targeting a competitive niche and having success at it will require experience, time, and sometimes money.

If you do have success, however, the rewards will more than justify the efforts.

Often times the path to a profitable business, in fact, is not finding a market or niche with no competition but rather doing what it takes to beat the existing competition in the market or niche that you want to take home.

But then again, it won’t be easy.

Why You SHOULD Target a Competitive Niche

We talked about the reasons that might lead people to not target competitive markets and niches. Apart from those, there is also one big reason why you should consider targeting them, and that is: competitive markets and niches are proven money makers.

In fact, they are so competitive exactly because they can be enormously profitable. Obviously, not everyone entering into such markets or niches will see the money, but the ones who manage to stay abreast of the competition will see a lot of it.

In a small niche, on the other hand, you might end up not making a significant amount of money even if you dominate it.

In other words, when you start working in a competitive niche, you know that if you succeed, the profits will be there. In a small niche, however, you don’t know what is going to happen even if you succeed.

Tactics vs. Strategy

The first thing that you need when competing in highly competitive niches is a new mindset. More specifically, you need to think in terms of strategies rather than tactics.
What is the difference? Tactics are the actions that one must take to make a strategy successful. While the tactics are necessary, the strategy is far more important.

We can illustrate the concept with a military analogy: When the general orders the archers to fire, he is using a tactic. When the cavalry attacks from the flank, you have a tactic. The same is true for when the infantry charges. The combination of those tactics, their time and position, on the other hand, are the strategy, and that is what will determine whether or not the battle will be won.

Under the SEO perspective, the tactics would be the on-page, on-site and off-site optimization factors that we discussed in the previous lessons. Knowing and applying those factors is necessary, but that alone won’t guarantee success. You will need to have a strategy, which is the overall plan that will guide your actions. This includes how you will build backlinks, how you will interact with competitors when you will execute each action and so on.

Three Sample Strategies

We are now going to cover three simple strategies that have been used successfully on a wide range of markets and niches. You can use them if you think they might be suitable for your online projects, but remember that they are just examples. In other words, don’t be afraid to develop and test your own strategies.

Strategy One: Divide and Conquer

Instead of targeting the competitive niche or market directly, you can break it down into sub-niches, and then target those, one at a time. This strategy has many advantages. First of all it will make the task at hand easier. Secondly, it will give you a larger leverage as you move forward since the assets (e.g., email lists, traffic, backlinks) that you built under one sub-niche can be used for the subsequent ones. Finally, by targeting one sub-niche at a time you might also be able to fly under the radar of the large competitors.

For example, if you plan to enter into the “weight loss” niche, instead of starting by targeting that keyword, you could start with “weight loss tips” or “weight loss pills.” You would need to create an internal page or even a collection of internal pages that will cover the chosen sub-niche, and then you would need to work on the promotion and link building part individually. Once you are ranking high, choose a second sub-niche and repeat the process, until you feel you have enough leverage to hit the main keyword.

Strategy Two: Learn and Adapt

This second strategy involves analyzing successful players in other niches and learning about the strategies that they are using. This includes their keyword targeting strategies, link building strategies, content development strategies and so on. Once you understand those strategies, it will be just a matter of adapting and applying them to your own niche.

Once again suppose that you want to compete in the “weight loss” niche. After examining one of the top ranked websites for the keyword “credit cards,” you find that one of the strategies that it uses to build an email list is to offer a free credit report while requiring an email address to deliver the report. You could adapt that strategy to the “weight loss” niche by offering a fitness condition report and by delivering the results by email, for example.

Strategy Three: Smart Remora

The remora is a fish that attaches itself to a host, usually a shark or a whale. It does so because the host is bigger and thus able to swim faster. The remora also feeds on leftovers from its host.

If you want to target a highly competitive market or niche, you can use this same strategy. First of all, you need to choose the big fish that you are going to attach yourself to. After that, you will need to analyze its strategies and follow up on the same steps.

You should use anything available to analyze your competitor here, from web tools to affiliate programs and direct points of contact. If your competitor offers a service, for example, you should become a paying customer so that you will be able to understand how they are marketing the service, delivering it, handling customer support and so on.

Keep in mind that sooner or later you will need to let your competitor go and develop your own strategies, though. This is the only way to beat it.

Backlinks Rule

If you want to play inside competitive niches, you will inevitably need to work constantly on link building.

First of all, this means that you will need to build links every day, all year. In narrow niches, once you reach the first positions on Google, you can often slow down on your link building effort and still keep your rankings and the organic traffic. The same is not true in competitive niches. If you stop link building you will start sliding down.

Secondly, you will need to get many high-quality backlinks. In narrow niches, it is often possible to rank well without high-quality backlinks. In competitive niches, however, this is not the case.

Finally, you will want to monitor closely the link building efforts of your competitors, replicating them as often as possible. If you manage to get backlinks from the same sources that they do, after all, you will be able to neutralize the advantage that they would get from those links.

Action Points

  1. Evaluate the arguments that people use to not target highly competitive niches, and evaluate whether or not they apply to you.
  2. If you decide to target a highly competitive niche or market, spend some time drawing your strategy before you start taking actions. Practically speaking, you need to figure out what keywords you are going to target, in what order, how you are going to build links, who your main competitors will be and so on.
  3. Remember to track your results extensively. You can’t improve what you don’t measure. Some of the metrics that you can track are: the organic traffic, the conversions of advertising CTR, the rankings for your main keywords and the number of external backlinks.

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