The profitability of an Adsense niche is primarily based on the amount that Adwords advertisers are spending to compete in that niche.

Remember that an Adsense ad is only an Adwords ad that is appearing on your site and not Google. The amount that an ad generates per click is therefore directly related to the amount that Adwords advertisers are paying per click. Bottom line - if they are paying more we earn more.

So how can you find out which niches (and which keywords inside those niches) advertisers are spending more money on?

I use two different methods:

1. Keyword Research With Keyword Country

As you will have probably have started to gather I cannot lay enough praise on this tool. In fact I struggle to understand how I researched, chose and targeted niche sites before I got hold of it...it's that good. Aswell as being able to search by category or keyword you can also search by price range. For example, you can decide to find keywords that have an average cpc of say between $18 and $20. If you enter this price range it will return a list of keywords which fall inside that parameter - in this case - 3957 different keyword phrases.

The top 5 rated keywords in this cpc range were: "credit card", "free credit report", "mortgage rates", "consolidate debt" and "website hosting". All you need to do is go down the list work out which ones would be suitable for an Adsense monetized information site, extend your keyword research by taking your chosen phrase and entering it into the search box, build the content, integrate the Adsense and promote your new website.

This is a simple and effective way of finding out where the advertiser dollar is being spent and consequently where the Adsense dollar may be earnt.

As a side issue - with tools like Keyword Country available you should never pay for a keyword list. For less than their cost you can get access to a complete keyword database which includes extensive analysis and ratings in terms of profitability and potential for every keyword or keyword phrase entered into the search engines. Spend your money wisely.

2. Affiliate Analysis With CJ

A different method is to forget keywords for a minute and to focus on markets and their advertisers. Adwords advertisers are made up of two types of people - companies and affiliates. We can't easily find out how much companies are making but we can find out how much their affiliates are by joining up to a third part affiliate network like Commission Junction (CJ), which connects companies that are selling products and website publishers like me and you who are willing to promote them for a commission.

My premise is that if you find the markets that are profitable for affiliates you will find the markets that are profitable for Adsense monetized sites. Why? Because a profitable market is one that you can spend a good sum of money on advertising and still make a healthy return.

Where the affiliates are earning good money, the companies and the affiliates will be spending big money on Adwords advertising.

You can find which markets are profitable in CJ by using their catrgory lists and sorting features. Once logged in simply follow this process:

1. Click on Get Links > this will take you to a categorical listing of all the advertiser programs.

2. Choose A Market From The Category List > this will bring up all the advertiser programs inside that niche category.

4. Click "3 Month EPC" > this will bring the top performing affiliate programs in that niche to the top of the pile. EPC stands for "earnings per click" (at CJ this is earnings per 100 clicks) and illustrates on average how much affiliates are earning for each set of 100 people they direct to that program. For example, the top performer in the financial services niche is a company specialising in mortagage refinance and equity release, with a massive 3 month epc of $354.90.

Now I have my profitable niches - "mortgage refinance" and "equity release" - I go to Keyword Country to see if my theory is correct. If I type in those two keyword phrases, Keyword Country will return to me average cpc, number of searches, competition, number of Adwords advertisers and profitablity rating for every keyword related to those two seperate niches. If I'm right the average CPC for these two keywords will be very high.

This is what Keyword Country told me:

Mortgage Refinance - average cpc $27.17 across 823 related keywords.

Equity Release - average cpc $10.145.

The theory proved correct and I've found two profitable niches that I could build a mini informational site around. In addition, I would integrate the appropriate high paying affiliate program which would give me a second means of monetizing my traffic.

There are hundreds and hundreds of these niches you just have to do the research and find them. If you're using the correct method and know where and how to look you'll be able to build a targeted site around a profitable niche within a few days. Again, these type of mini targeted sites are best and most effectively built using XSitePro.

Best of luck,

Kelvin

PS: I am just finishing a new site of my own which I discovered, researched and built using the methods in this article. I will post the details of it shortly with a run through of what I did, why and how. In the first day it made $20 - not bad for the first day!