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Niche Markets in AdWords: What are the Pros & Cons?

White Shark Media

12 years ago

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Niche markets consist of groups of consumers (or market segments) within the larger marketplace, who share similar demographics, buying behavior, and lifestyle characteristics.

For you as a marketer/business owner, this implies to focus all of your marketing efforts on a smaller but also more precise and ideally well-defined sector of the population. Otherwise, it will most likely not be as profitable as you’d be hoping the business to be because you will be targeting a mass audience with a niche product or service.

A big part of niche marketing, is really knowing your audience. Niche marketing is based on how well you know your customers, which directly influence how well you’re able to successfully promote your product.

In niche marketing, you often talk about creating your own markets. By identifying your key customers’ needs and wants (which aren’t being met by other products), you can easily sell a product or service to meet this unfulfilled demand.

Advantages of Niche Markets

Niche marketing allows you to focus your resources on a small (specific and targeted) market segment. The outcome of this is that you’ll avoid wasting very valuable time and resources in attempting to sell your product or service to every customer in what’s more commonly known as “mass marketing”.

Niche Marketing Brings Less Competition

Another terrific advantage of niche marketing is that it usually has a smaller volume of competition. Although this is not something that will always necessarily apply, it usually tends to be the most common scenario. In PPC, this scenario is the most ideal since it would represent a lower cost-per-click, a good conversion rate and a cost-per-conversion, as well.

More Intimate Relationship with Consumers

Since niche marketing emphasizes the fact that the product or service is unique in comparison to mass-market-based products or services, this uniqueness and personalization usually appeals to the consumer and it helps you build a more loyal customer base. Similarly, if the product is unique, it can definitely also help you in building a unique business brand.

You Need to Know Your Audience

Before moving ahead, something worth mentioning or actually emphasizing on, is that if you know the needs, desires, wants, and/or problems (to which you’ll have a solution with your product or service) of your targeted audience.

Then the hardest part is done. The more you know your prospects, the simpler it will be to adapt your offer to those needs.

This is mainly the reason why it is so very important to conduct thorough keyword research, as well as thorough overall market research.

Disadvantages of Niche Markets

There are, as in everything in life, positives and negatives when it comes to niche marketing. Here are some of the negatives (they are lesser than the positives, and this is something to keep in mind).

The disadvantages vary depending on whether it is a competitive niche, or an uncompetitive niche.

No Competition is not Necessarily the Gold Mine You Think it is

If it is an uncompetitive niche, it is important to understand that if a particular niche lacks competition most likely it is for a reason, and the most common one is because there isn’t a large market for that niche.

So as a result, you may not be getting as much sales and profits as there aren’t enough potential customers or consumers. If that is not the case, then you may be the first to discover the market, and you could be getting your “golden eggs hen”, so take advantage of it.

When it comes to PPC, if there is no competition but there is not sufficient traffic from potential customers, then the average cost-per-click will be very low. But the sales and profit generated however may be equally low, as well.

Competition in Small Markets can be Ruthless

If on the other hand, you are part of a competitive niche market, the disadvantages could be many.

It can become a little too competitive and without enough experience and skills, success can be somewhat considerably more difficult to achieve and you could reach a point where you may become frustrated with your end results.

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