Using Google Adwords to Determine Demand

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So, you decide that you want to start selling billiards cues, because you love the game and certainly would love to make money off it. Or, you are an avid fisherman, so it’s time to start bringing in cash from selling fishing poles online. Or maybe, you want to start making and painting custom cornhole sets and selling them over the internet. What awesome ways to make a living!

But first, you want to make sure that there is a demand out there for the product you are selling. Fortunately, Google has a tool that makes determining demand pretty easy. Google makes billions of dollars every year selling ad space on their search engine through their Adwords program. All that links on the right side of your search screen or at the very top when you Google something are all paid ads – companies are paying per click to have their link featured here. It can take years and years of building up your SEO in order to get to the front page of the search term ‘billiards cues’ – but with adwords, your link can appear there in seconds. I will write another post later about how to use adwords, and the pros and con.

Google Adwords has a tool called the Keyword Planner. The Keyword Planner allows you to put in a search term, and see how many searches per month there are for that specific keyword, as well as similar keywords. What an awesome way to see how many people every month are searching for what you are selling.

In order to access Adwords, all you need is a Google account.  You just got to adwords.google.com and login with your normal google credentials – the Keyword Planner is completely free.  Once you login, click Tools > Keyword Planner and you will see a screen that looks like this:

 

From here, click ‘Search for new keyword and ad group ideas’ and a dialog box will open up.  All you need to worry about is the box that says Your Product or Service.  For the purpose of this example, let’s use ‘billiards cues’ as the keyword we are trying to search for.

When you type in ‘billiards cues’ and Get Ideas, your results will come up and look like the below image.

 

 

You will see two tabs – one that says ‘Ad Group Ideas’ and one that says ‘Keyword Search.’  I mostly work out of the Keyword ideas tab – the Ad group ideas tab is valuable though, because it can give you ideas of what demand there may be in certain markets.  Let’s start by discussing the Keyword ideas tab first though.  Once you click the Keywords idea tab, you can see that there are 170 monthly searches for the keyword ‘billiards cues’.  If you look below though, you can also see the searches for very similar keywords, such as billiard cues, billiard cue sticks, and so on – these phrases are referred to as the ‘tail’.  When you are determining demand for a certain product, it is important to take all into consideration, because even if you are ranked #1 on Google for the term ‘billiards cues,’ research shows that this will only account for 30% of your traffic, and the other 70% will be from the ‘tail’ keywords.

 

When you look at the ‘competition’ column – I wouldn’t think much of it.  Google only uses Low, Medium, and High, so it is hard to really draw any competitive conclusions from this data.  Who knows what Medium or High really means.  The ‘Suggested big’ column shows you what you would probably pay for a click on this search term if you were going to run an Adwords campaign.  So in this example, I would probably be paying around 79 cents per click on my ads related to the keyword ‘billiards cues.’

So you look at all this – what does it all mean?  Just to give you some rough numbers so you can do some math and determine if your idea is a solid one, the typical conversion for an online store is between 1 and 3 percent.  So, if you have 10,000 people come to your website in a month, you will average 100-300 sales.  So, if you are trying to sell a product, you have to think of it this way:  If there are 15,000 monthly searches for my keyword, and I am able to drive traffic from 25% of those customers, how much will I sell?

15,000 x 0.25 = 3,750 unique visitors x 0.1 conversion = 37.5 sales.  So, do the math – is that enough monthly sales for you to be profitable?  Or do you need to try and sell a product that has closer to 40,000 monthly searches.

It’s tough, because rather than trying to pick the product with ideal demand, you could also build a company website that converts well.  In the example above, if the website converts at 5% instead, all of the sudden we are talking about 187.5 sales per month – a nice jump.

So, go ahead and play around with Adwords and let me know if you have any questions about what you are seeing.  The reason I used the above example is because one of the very first online businesses I built was a store selling billiards cues.  In the example above, you would notice that the search volume for that keyword is really low, but if you change it to ‘Pool cues’ all of the sudden we are seeing much higher demand.

So, go ahead and play around – it is also a really nice way to find a product to sell just by searching for things that you enjoy and seeing if other people are looking around for these keywords also.

Once you have determined there is demand for a product, you also want to assess the competition – very important.  How to do this, I will explain in a later post!

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