Before embarking on an on-line advertising campaign, you first need to determine if your products and services will sell on-line. Are Internet users searching for your product or services? Are they buying? How much will it cost to advertise? Is there return on investment?

This is a numbers game, so first let me explain the first set of numbers. There are many ways to drive traffic to your site, but for this example I'm only going to discuss using pay-per-click campaigns (PPC) like Google Adwords. PPC ad campaigns are designed so that every time someone clicks on your advertisement, you pay Google the cost per that click. This can be an expensive method depending on how competitive the keyword phrases are that you will be using. The cost per click will vary based on the popularity and competitiveness of your niche. Using Google Adwords you will write a three line advertisement for your product or service based on the keyword phrase that you are focused on. Every time your ad appears in a search, it is called an impression. When someone clicks on your ad, it is called a click. So first let's look at the relationship between clicks and impressions. A typical PPC campaign will yield a 1% to 10% click to impression. If you have 1,000 impressions in a day, we can expect 10 to 100 clicks. In other words for every 1,000 impressions, 10 to 100 prospects will visit your landing or product page on your website. In researching your niche we are not only looking at impressions or how many people are actually searching for your product or service, but also what the cost of those clicks might be. We also need to look at how people actually purchase your product once they arrive at your site. This number will vary greatly based on how well designed your campaign and landing pages are. There are several tools available to help you research your niche.

Google Insights for Search (http://www.google.com/insights/search/#) - This free tool gives a search history based on a keyword phrase or phrases. This will give you an idea of broad trends in Internet search behavior. Let's suppose we are interested in selling a dog training video. By typing in the phrase "dog training video" into Google Insights we see the following screen:

Google Insights is a great tool to identify trends in Internet search. It also gives you insight as to where your products and services are popular so that you can focus your activities in those areas.

Google Traffic Estimator (https://adwords.google.com/select/TrafficEstimatorSandbox) - This free tool gives you an estimated search volume (impressions), estimated clicks, and the estimated cost per click. The screen below shows you the estimated traffic for the keyword phrases "dog training videos" and "dog training".

The traffic estimator gives you an idea of which keyword phrases will get you traffic and how much it will cost. The reason I chose the keyword phrases in the example above is to show you the extremes.

The exact phrase "dog training" is estimated to yield 424 to 532 clicks per day at a cost of $960 to $1,740 per day. If we are able to close 5% of the Internet searches that visit our site, we would be looking at selling 21 to 26 products a day. If your product price is $100 you would be making money. If your product price is $10, you would be losing money.
On the other extreme is the exact phrase "dog training video". There are very few searches for this exact phrase, so the cost per day would be low (2 clicks per day at a cost of $3 to $5). Because the search volume is low it would take 10 days to make one sale at a 5% close ratio. The secret here is to find good keyword phrases that have a decent search volume at a cost where the return on investment is high.

As you can see there are many variables in the equation to determine if your product or service will make money on the Internet. In researching your niche, you have to understand that there are many ways to drive traffic to your website. The exercise shown above is only to give you a high level idea of whether your product or service will make money on the Internet. The pay-per-click example is a good place to start because it will give you an idea if it will work using pay-per-click methods, which is probably the most expensive method. If the numbers are close using pay-per-click, then you should pursue it further and refine the numbers so that your return on investment is as high as possible. If the numbers are not even close, then you should probably look at other methods of driving traffic to your site.