Does the idea of continuous passive income from websites you can set-up and forget about sound good to you? Well that is what niche content websites are all about. Let’s take a look at this online income method.

I was over at Ben Bleikamp’s new blog, College-Startup, where he has been writing about his efforts to create niche content websites.

The concept is reasonably simple. Do some research, find some very tight niches that aren’t well serviced at the moment, build a content website targeting the niche, stick some AdSense, Chitika and similar advertising programs up and just let it sit there earning a few dollars a day.

Now you must be thinking how does this make good money? Well it doesn’t make much, but if you are lucky and do your research well, $2-$3 a day is enough to consider it a success. Once you have done this you can move on to your next niche content website. Over a period of a year if you set yourself a goal to create one of these content websites per week at the end of 12 months you would have 52 niche content sites. If they all make an average of $2 per day that’s $104 per day total, around $38,000 USD per year. Best of all the websites require no maintenance, it’s all about picking an untapped niche and filling it with content.

How To Make This Work For You

Before you run off trying to pull this off remember that in order for it to be successful you need to be confident you can successfully generate good search engine traffic to the niches you select. The recursive income only comes when you have search visitors clicking your ads. By the way, random search visitors are usually better ad clickers than loyal readers and that’s one of the reasons why this technique can work. Randoms come to your site once, read your content, click an ad and probably leave never to return again. Loyal readers come back for new content and often screen out the ads. It’s not in your interest to establish a repeat audience using niche sites. You don’t want the responsibility of adding new content since chances are finding content about a niche you don’t necessarily have much interest in can be tough. In this case it’s just search traffic you care about, forgot about being sticky.

Step One: Find A Niche

First you need to find niches where there is some traffic. You should use the usual tools, such as the overture inventory keyword data miner, to conduct research on how many searches are done for certain key phrases (look for sites with at least 1000 searches per month). Don’t aim for keywords and topics that are highly competitive, look for low competition with *some* traffic. Take for example Jonathan Wold’s Sump Pumps Information niche. How random is that! Do you even know what a Sump Pump is? I don’t, but he suspects enough people are searching for sump pump information online and he only needs a handful of them to click his ads per day.

The key is to find topics that people search for and advertisers use Pay-Per-Click marketing and other online advertising methods to sell to these people. Your niche content site helps to bring these two groups together and you take your middle man fee, with the help of the search engines for traffic and advertising programs for a monetization system.

Always be certain there are monetization possibilities before starting a niche content site otherwise you will be wasting your time. Look for AdWord campaigns by doing Google searches for the niche you are considering – if you see several ads down the right column that target the niche then you know advertisers are paying to reach these markets. To be really thorough, log into AdWords and set some test campaigns up and see what the bid prices are for your keyword research subjects. If the prices are reasonable then there probably is some competition for those keyphrases from advertisers running AdWord campaigns.

Step Two: Scan For Competition

Once you find a few niches you think have potential search those keyphrases and see what results show up. If the natural search result sites that turn up are badly optimized (look for low PageRank, poor title keyphrases and heading tag keyphrases) and you are confident that a site with well optimized content would quickly jump to the top of the rankings and by quickly I mean about 3-6 months (remember the Google Sandbox is going to impact how quickly you get high rankings) then you might have your first candidate for a niche content site.

Step Three: Build A Site

I suggest you go with WordPress to manage your niche content site. WordPress is blog content management software that runs off a PHP/MySQL backend (this blog uses it). It’s very easy to set up, handles most of the search engine optimization for you and all you need to do is pump in the content and off you go. There are some occasions where a plain static HTML site may be more appropriate, for example when you only need a micro site of a handful of pages and it would be quicker to just set up the few pages using a HTML template design, but I’ll leave that up to you (read Bo’s Marketing-Syndrome post onWordPress vs Static HTML? for more discussion on this topic).

How To Find Content

At first thought this would probably be the hardest part of using the niche content site technique – how do you come up with content for a niche site that very likely you have next to no interest in or experience with? Now if you are not the writing type and can’t waffle on and bang out a few key pages of content yourself by utilizing what’s already available online, then you may want to try these options:

• Use articles from public article repository sites such as Ezine Articles andGoArticles

. Writers contribute articles to these sites that you can republish on your site as long as you keep the author’s byline intact. The downside of this is that other people also can do the same and your article won’t be original. However if your niche is small enough there won’t be that many other people out there discussing the topic (in fact you are banking on it) so if you are lucky enough to find some on-topic articles in repository sites, make use of them.

• Another popular method is to republish Wikipedia content. Wikipedia is an online encyclopedia contributed to by anyone and if you have ever used the site you know that it has entries on virtually any topic you can think of. Chances are your obscure niche content site topic will have some entries in the Wiki and under the GNU Free Documentation License you can republish the content on your site.


• Freelance writers all over the web are eager to take your money in exchange for their writing skills. Elance is the largest freelancer hub online and listing your article writing project there will flood you with responses. Most writers are pretty adept at producing content on almost any topic, even if they just regurgitate someone else’s writings in a new way. A few thousand words shouldn’t cost you too much money. If possible try and establish a long term relationship with a good writer if you plan on needing their services again.


• There are special article subscription services that give members the rights to make use of articles, some even promise a certain amount of new articles on a range of different niches will be provided on a regular basis so as to keep members subscribed. The idea here is that you get access to an article pool that only other members are granted access to. This is deliberately done so the articles are only utilized by a handful of people and often membership sites will cap their numbers at a few hundred. Members can do what they want with their articles knowing that at worst only a few hundred other sites are using the same materials.
  

  Personally I have never subscribed to an article site and I’ve read various reports, some good, some bad, about article membership services. I’m skeptical about the concept and I don’t like the idea that you have to either choose a niche that directly matches the articles available or try and modify articles to match your niche. I also have no idea where article membership sites source their articles but I have a feeling it would be a room full of trained monkeys writing the new articles each month (or ahh, freelance writers of course, and let’s not talk about cheap Indian labor). Given that most members subscribing to the articles will be chasing the same niches this seems like a formula to guarantee you will have at least a few hundred people competing in your niche – not much of an opportunity then is it!

  
  

The Importance Of Keyword Click Through Prices

For most niche content sites AdSense and/or Chitika will be the main monetization strategy. These programs pay on a per click basis and click through prices are calculated based on advertiser demand. The golden mix is to find a niche with few well established content sites but a lot of advertisers competing to find customers. This means click through prices will be high but the market is not likely to stay untapped for long and likely a bunch of competing content sites will pop up. In fact you may never find this combination.

A more likely scenario is a niche where there are high click prices because of lots of advertisers and a few well established content sites or moderate to low keyword prices but almost no competition. How you can succeed in these situations is to be better at search engine optimization than any of the other sites. If your site pulls more traffic you get more clicks.

The situation you want to avoid is a niche with few advertisers so low click through prices. No matter how much traffic you get and much you dominate a niche, if there are no advertisers paying to use Google AdWords you won’t get any AdSense income or it will be 10 cents a day from the one advertiser with no competition. Bear in mind however that there are general advertisements, for example Chitika can show cameras, computers and other electronic products that may appeal to a general audience and produce enough click throughs to make it worthwhile. This is a risky venture though since your niche is not relevant to your monetization method, the amount of income you earn will like be very random and inconsistent.

Underachieving Due To Low Entry Barriers

If you have read Perry Marshall’s Renaissance Club Newsletter you will know about two online marketing strategies he discusses, one called ‘underachiever’ and the other ‘overachiever’.

Note – if you haven’t signed up for the special offer to try Perry’s marketing newsletter it’s still available and you still get the Definitive Guide to Google AdWords, five marketing reports and five audio CDs thrown in just for trying out the membership for one month at $29.95 – check it out here for more information.

Overachiever

Overachieving is when you dominate a niche, become an expert and “go deep” by offering more than just one product or service. You may offer seminars, audio recordings, DVD video classes and a whole host of additional materials that make the lifetime value of a loyal customer a lot more than a once off purchase or text link ad click. This method means you can afford to compete by making a loss on the sale of your first product or lead capturing method because the value over time of that conversion is much higher. I’d say Perry’s offer that I mentioned above is a loss leader (overachiever) strategy too, he can’t be making money shipping off all these CDs and reports at such a low price and paying out affiliate commissions – but he knows that the 5% of customers that become fans and purchase everything he produces will spend hundreds to even thousands of dollars over time.

Underachiever

Niche content website building is an underachiever strategy. Profitable niches rarely stay uncompetitive for long and as niche content site building becomes popular you are going to be fighting with others for niches. Underachieving is when you deliberately choose to lightly skim a niche, perhaps by selling an ebook to a market that currently is not satisfied. Niche content sites service a unique niche with basic information and generate advertising income as a side effect, there is no intention to further capitalize on the audience. The idea of course is to rinse and repeat, building up a portfolio of profitable niches. The problem here is that you must keep working to find new niches to replace those that become too competitive to fight for.

For those that can manage a lot of sites and in fact enjoy the variety that comes from building sites on such an array of different topics, the niche content site strategy can work well. If you can build a really large portfolio, competitive action won’t impact you significantly because it will take a long time erode your entire income stream. Remember though that it’s not true passive income forever since you will need to replenish your portfolio with new niches if you want this strategy to work for you long term.

In my mind however a better way to go about this is to treat niche content site building as an education and research tool. Learn what it takes to get free traffic to a site from search engines. Learn how to optimize sites, find profitable niches and build content quickly. When you stumble across a niche with unexpectedly high demand and return consider switching your strategy from underachiever to overachiever. Start collecting email addresses to build a list. Get an ebook written, find affiliate products to sell, create a membership service, record screencasts to build information products, and “go deep” in the marketplace. Become the expert in that niche so you can own it and depend on it for long term income despite competitor actions.

Leverage Your Previous Hard Work

I’m sure you will find that many of the weird and wonderful niches you come across are already serviced by hobbyist sites, very unprofessional, perhaps hosted on free hosts with designs created in Frontpage or even (shudder) Microsoft Word. They usually have low PageRank but due to lack of competition will show up as top results in search engines. A quick search and easy technique to surpass these sites in the search engines is to leverage one of your already successful, high PageRanked sites.

Most online marketers have a site that they devote the majority of their time to, likely a blog or their main business project. This site enjoys good, hard-earned traffic and has lots of backlinks that were built up over time. Using this site as a tool to promote another site is an advantage, especially in the niche content market.

For example this blog is my main site. If I built a niche content site I would link to it from the sidebar that is on every page giving the niche site lots of valuable backlinks, PageRank points and helping it to very quickly enter the search engine indexes. In fact I’d hazard a guess that a site-wide link from this blog alone would vault a niche content site to the top of the results for it’s niche without much other work on SEO. There might be some sandbox issues initially, and true the relevancy of the links would not be very good, but given the competition likely doesn’t even know what SEO is and your carefully researched niche is small and untapped, the advantage is significant. Having a powerful site to leverage is a big helping hand for a niche content site marketer.

Conclusion

You will be surprised by what type of niches you can dig up. Often the most bizarre topics have real followings. Everything from how to raise turtles, where to find the best secondhand clothes, how to do magic tricks, how to snowboard, learning to cook vegetarian – and these are mainstream topics already well catered to. It’s your job to find the obscure, to think outside of your box and find markets that you would personally never consider being a part of yourself. Thankfully the search engines are full of keyphrases and all you have to do is get out there and research. Browse Wikipedia, follow the external links and expand your horizons. You may find some very profitable niches that no one else has thought of.

Yaro Starak
Internet Business Guy