In my last post on making money online, I touched on the basic principles behind what makes a site subject profitable. To review in brief, those are:
- Not too many existing pages on the subject (Supply).
- Good search volume (Demand).
- Lots of advertisers for the topic (Demand for your audience).
As you can see, the concept boils down to the most basic of economic concepts: supply and demand. If you’re selling a product, those two are all you need to know. But when giving away free information in exchange for ad revenue, things are a little different. Your product is not the information you provide, it’s your audience. Your customers are not your readers, they’re your advertisers.
This concept is absolutely critical to your success if you intend to make money from advertising. Gathering an audience and providing fun content is all well and good, but you have to ask yourself: Do advertisers want to reach your audience? If the answer is no, then you’re not going to make any money from advertising.
Failure to understand this concept is the reason why so many popular sites go under. They may have gathered lots of readers, but if those readers aren’t buyers, then no on will pay to advertise to them.
Recognizing a Good Passive Income Opportunity
To understand how this works, put yourself in the shoes of an advertiser. What sort of audience do you want to reach? It should be easy to see that advertisers want to put their ads in front of the people that are most likely buy the product or service they’re offering. Advertisers will pay big premiums to have their ads put in front of people who want to buy something right now. So if you want to maximize your ad revenue, that’s the sort of audience you should be looking for.
Often you can figure out if someone wants to buy something just by looking at the keyword they’re searching for. I call keywords that indicate that someone is ready to buy “Wallet Out” keywords. Let’s try it.
Pick a topic that you have a passion for. Personally, I have a passion for guitars, and have recently taken up building them myself. A site on this topic would be fun to make, so let’s consider the options.
First, who will our advertisers be? Chances are they’ll be companies that sell guitar making supplies. So let’s say you have a company that sells guitar making supplies. I’ll throw out two keywords, and you decide which searcher you would rather have see your ad:
- Guitar Making
- Guitar Parts
Now you might expect that either of these searches indicates interest in your products, and you’d be right. However, as it turns out, searcher number 2 is twice as likely to make a purchase during his web session than searcher 1. Why is that?
Passive Income Comes from Product Seekers, not Information Seekers
Someone searching for “guitar making” is likely to be looking for information about how to make guitars. He might be a guitarist who is idly learning how his favorite instrument is made, or a kid doing a research report for class. He might eventually end up deciding to try guitar making himself, and buy some parts to get started. But right now, he’s more likely to be in the learning stage than the buying stage.
Consider someone who searches for “guitar parts,” on the other hand. What is this person after? Do people go around idly searching for “guitar parts” just to do some pleasure reading? Or to research a report for school? Not likely. People who search for “guitar parts” by and large want to buy some guitar parts. Therefore, passive income from a site on “guitar parts” is likely to be significantly higher, on average, than from a site on “guitar making.” Put differently, the guitar making site will have to get a lot more traffic to earn the same amount of income.
As you can see, a slight shift in focus can create a huge shift in passive income potential.
