After you have determined that there is adequate demand for your niche, it's time to
evaluate the competition. There are two methods I use to evaluate the competition.
Method 1 - Check the Competition in Paid Search Listings
One of the best ways to check out the competition is to review the paid search listings in
the top search engines (Google, Yahoo, and MSN). Paid search listings appear at the top
and the right side of the search results page. They're generally marked "Sponsored
Results".
To check out the competition in the paid search listings, take the keyword list that you
used to evaluate the demand for your niche and enter these same keywords into the
respective search engines.
When you’re sizing up the competition in paid search, think about the following
questions:
What keywords are most competitive? What keywords are less competitive?
As you’re doing keyword research take note of which keywords may be too competitive,
and try to identify keywords with less competition. Remember if you’re not on the first
page of the paid search results your business doesn’t exist in the mind of the customer.
I recommend that you use the Google Keywords Tool to evaluate the ratio of search
volume to competition in paid search. In the example below I compare the search volume
for two popular Canon camcorders:
competition. Conversely the keyword “canon optura 100” had fewer searches, but
significantly more competition. This doesn’t necessarily mean that you shouldn’t target
the Optura camcorder, but you do need to recognize that there will be more competitors
bidding on that product.
What keywords have the highest bid prices? What keywords have lower bid prices?
While you’re surveying the competitive landscape you need to estimate average click
costs for your keywords. Using the Google Keywords Tool you can get click cost
estimates by selecting “Cost and Ad Position Estimates” from the drop down menu.
In the graphic below I used the keywords “canon elura” and “canon optura from our
previous example.
I’ve found these estimates to be fairly accurate in terms of click cost and ad position, but
if you write poor ad copy or bid on keywords that aren’t relevant to your website than
your click costs will most likely go up as your ad position is lowered. It may seem
counter-intuitive that your ad position would fall while your costs go up, but Google
rewards relevant ads.
How many competitors are showing up for various keyword searches?
When researching a new niche I like to see how many competitors are showing up for
various keyword phrases. General keywords containing 1-2 keywords will generally have
the most competition and the most traffic. These words can be very expensive to bid on
as an affiliate. Keyword phrases that contain between 3-5 words are more specific and in
many cases have less competition. The traffic volume for these keywords tends to be
lower, but in my experience they often convert better.
As you’re doing keyword research pay special attention to the type of
advertisers bidding on your keywords.
Take time to note if there are other affiliates bidding on your keywords. At first glance it
may seem like a good thing if you don’t see other affiliates, but it can also mean that
others have tried and failed. This doesn’t necessarily mean that you will fail, but you
should try to understand what could be preventing other affiliates from bidding on those
keywords. It’s possible that you uncovered a niche with little competition, but it could
also mean that bid prices were too high or the conversion rate was too low.
As you’re reviewing your competitor’s search listings and websites try to observe their
strengths and weaknesses. Can you find any hidden opportunities? Where can you add
value? What can you do to differentiate yourself from the competition?
Method 2 - Check the Competition in the Natural Search Listings
In addition to evaluating the competition through the paid search listings, it's also a good
idea to see which competitors are showing up in the natural search listings. Advertisers
cannot pay to be at the top of the natural search listings. Natural search listings are
determined by the search engine's own algorithms. Natural search listings appear in the
main body of the search results page.
Don't be alarmed, but there are going to be A LOT more results showing up in natural
search listings than paid search. This is because the search engines are going to display
every web page that mentions the keyword that you have typed in, including blogs,
forums, classifieds and other non-commercial results. Most of these websites will not be
competing directly with you, so don't be intimidated by the number of results returned.
Google Natural Search Example:
To determine how many pages are showing up in the natural search listings, all you need
to do is type your keywords into the search box of your favorite search engine. If your
keyword contains more than one word, you should place the entire keyword phrase in
quotes, which will ensure that the results contain that exact keyword phrase and not just
pages that contain any combination of those words.
Tip
Another way to determine how many competitors you have is to search for your keyword
with Google's allintitle operator (allintitle:"keyword"). The allintitle operator will tell you
how many web pages use your keywords in their page's title tag. The title tag is
commonly used to optimize a web page for a particular keyword
For this demonstration we’ll use the keyword “HP Pavilion a1520e” from our previous
example. Let’s start by entering in the keyword without quotes:
From this illustration you can see that Google returned 13,200 result pages for our
keyword phrase. Keep in mind that this search returns all pages that contain our
keywords, regardless of word order. If we encapsulate this same keyword phrase in
quotes there will be fewer and more targeted results because Google will only return
pages that contain our exact keyword phrase:
Figure 2.2.3.g – Natural Search Results for “HP Pavilion a1520e” using
phrase search
By limiting results to pages that contain our exact keyword phrase you get a better idea of
how many competitors may be optimizing their sites for this keyword. Google lists 962
pages, compared to 13,200 when using broad search.
What You Need to Look for When Sizing-Up the Competition in Natural Search
One keyword search may return 1,000,000 results, while another only returns 1,000.
Regardless of the number of results returned the only positions that really matter are 1-
10. Your listing will be invisible to most users if you’re site is on page two, and you can
forget about getting any traffic from the search engines if you’re on page 11.
If you’re planning on getting traffic from search engine optimization efforts you need to
determine how difficult it would be to crack the top 10.
At this point you are just trying to get a feel for the competition. Don't be intimidated
when you do a search for one of your keywords and it returns 182,000 results in the
natural search listings. This DOES NOT mean there are 182,000 competitors jockeying
for top position in the search engines. It just means the keyword is mentioned in that
many places on the web.
