This is the tenth in a series of articles on How to Achieve Internet Business Success. In the last article we discussed how Google search results and search term frequency give us critical information about supply and demand.
Let’s use an example to illustrate this. Let’s compare supply and demand for two popular recreational pursuits: fishing and golfing. You can do the same comparison for other things or anything you are interested in.
If you fish or golf you know that people spend a lot of money in these areas, because you are one of them.
I know I’ve spent a lot of money on golf through the years, and I am typical. Luckily, I never had to buy a boat to play golf — I figure that saved me a lot of money! (Which might be wishful thinking, considering how much I’ve spent on golf through the years.)
How to Measure the Marketplace Demand:
- You calculate the Google search volume for “golf” and also for “fishing”
- The Demand is measured by the number of clicks on Google’s “pay per click” (PPC) ads.
- Golf has 33,000 daily clicks; fishing has 10,000 daily clicks.
- The number of daily searches using the word: Golf, 1,600,000; Fishing 500,000.
How to Measure the Marketplace Supply:
- Google has data on number of webpages that contain any search term or Keyword.
- This data is shown every time you do a Google Search
- The number of web pages mention “golf” or “fishing” in the title: Golf: 158 million; Fishing: 63 million
What have we learned? We know there is data here we can use, but how? Well, we can divide the clicks by the webpages to get a rough idea of the relative supply and demand positions of golf and fishing.
Divide searches by web pages:
- Golf, 1,600,000 divided by 158 million (.0101)
- Fishing 500,000 divided by 63 million (.0079)
- We conclude that with fishing, there are fewer searches and fewer ad clicks compared to the total web pages.
- Golf has more web pages to compete against, but even more searches and clicks indicating a huge demand in this niche market.
From this data we can conclude that Golf is a much bigger market than Fishing and also there are fewer webpages on a relative basis. This means golf has less competition online than fishing.
This analysis has been very simplistic, but it gives you an idea of how we analyze supply and demand on the internet. This analysis is a very critical component of research into the relative desirability of internet businesses.
