How to Quickly Test a Market

Discussion in 'Affiliate Programs' started by barsha, Jun 25, 2008.

  1. barsha

    barsha Registered Member

    Apr 9, 2008
    Likes Received:
    07/01/2007 11:51 PM Quote Reply Alert
    I shared this recently with a colleague and he suggested I pass it onto the forums. This is not an "all inclusive" list, but one that can assist you to make a good decision quickly.

    As affiliates, sometimes we get "bogged down" with the hype and the dollar signs that we never look at reality. Here is a close look at "reality":

    Often, when you are looking to get into a market, you get in without doing some "quick math" in your head and a few searches to determine if you should do that $100.00-500.00 ad spend in AdWords as a test. When you find a potential market, spend ten minutes to determine if it can be profitable. If it can be, then turn on the PPC test to see if it can convert well for you. Sometimes, a great market just won't convert well for you ... it happens (even to me) and it is best to know as soon as possible if the market is a dud. And it isn't the money wasted that is the issue, it is the time. Remember, you can always make up lost money, but you can never make up lost time.

    Make sure you do these steps first!

    In this example, I will use ClickBank, which sells mostly eBooks. You can apply these steps to any affiliate program or network.

    Step One: Write down the industry, exact eBook name and author.
    Step Two: Write down the commission per sale.
    Step Three: Based on a conversion ratio of 5%, project revenue. (while I realize that 5% seems high, it is what you should expect with the right targeted keywords, the right product and the right landing page).
    Step Four: Write down your "break even" point in terms of Cost Per Click (CPC).
    Step Five: Open the Keyword Tool in Google AdWords
    Step Six: Enter the "main keyword"
    Step Seven: Add all keywords Google suggests
    Step Eight: Click "Estimate Traffic"
    Step Nine: Highlight Keywords in List
    Step Ten: Open the Traffic Estimator tool
    Step Eleven: Sort by Estimated Clicks Per Day (highest first)
    Step Twelve: Look for keywords in the range of the break even point you wrote down in Step Four. You must have at least ten estimated clicks per day to keep the keyword in the list.
    Step Thirteen: Verify that at least 100 clicks per day can be had for the "break even" CPC point.
    Step Fourteen: Re-run "Traffic Estimator" and target the actual product name and the author's name and look for traffic estimates of ten clicks or more.

    Let's do an example together:

    1. Dog Training. Kingdom of Pets: SitStayFetch by Daniel Stevens
    2. $26.31
    3. $131.55 ($26.31 x 5) 5 sales is based on 100 visitors at 5% conversion (most will state that this conversion ratio is too high, but because we will focus on the keywords that sell, this is the minimum that you should expect).
    4. $1.32 ($131.55/100) Paying $1.32 per click would "break even" on the campaign.
    5. N/A
    6-11. N/A
    12. training dogs: $1.58 (60-75 clicks projected)
    training a dog: $1.41 (17-21)
    free dog training: $0.84 (16-20) - this can be used to promote a free guide and then upsell the eBook
    dog training tips: $1.07 (11-14)
    german shepherd training: $1.32 (11-14)
    dog house training: $1.03 (10-13)
    dog potty training: $1.14 (10-12)
    training your dog: $1.04 (10-12)
    13. Verified. On the conservative side, 145 clicks a day are estimated.
    14. Searching for "kingdom of pets", "sitstayfetch", sit stay fetch" and "daniel stevens" did not return results of 10 clicks or more.

    With the above, it can be assumed since we can get over 100 clicks per day at around the break even point that this would be a product worth pursuing. A $100-$500.00 PPC test would be worthwhile.

    Questions and Comments welcome.

    Best Regards,

    Jerry West
  2. stealthisblog

    stealthisblog Regular Member

    May 26, 2008
    Likes Received:
    New York City
    this is a very cool way to test run markets... I'll definetely be using this next time I set up a niche site :D thanks a ton!
  3. ChanzGrande

    ChanzGrande Elite Member

    Feb 16, 2008
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    Northern Woods Counting Money
    Awesome. Let's do like ten more examples?