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Understanding a Niche vs a Vertical and the $ making difference

I see affiliates using “niche” and “vertical” interchangeably, but I think sorting your thinking straight on the key difference is going to be one of the things that helps you scale your online earnings.

At first glance both words refer to a category or topic (like gardening, or finance, or games) that you hope to theme an online marketing campaign around…so it seems similar, but it’s not.

A niche in time…

Let’s look at some examples: A niche (variously pronounced as “nitch” or “neesh” depending on which side of the pond you’re on, or maybe how many beers you’ve had) is something specialized. So the stuff on Clickbank tends to serve a niche. For example “low calorie recipes to promote hair re-growth for vegans” would be a niche. “Dog training for hearing impaired pet owners” might be another niche. These tend to be specialist products with interest from a smaller subset of the Internet audience. The key driver of why this product does well is because the user can’t easily get this info or service elsewhere. After all, how easy is it going to be to find a book on “501 woodworking project for someone with zero technical skill”? So the $27 or $47 e-book on clickbank tends to find a ready audience.

In most cases these niche products tend to top out at a couple thousand in revenue per month. So to bank with these products, you’d usually have to market several of these types of products. If the products are related or complimentary, there exists opportunity to cross-sell and cross-promote, so you can, to borrow a phrase, “stack that money”. You might do this be cross-selling a range of photography books (outdoor photography, fashion photography, shooting kids (taking their photos, not going at them with an AWP…)). If you upsold stuff, you might sell camera paraphernalia, like camera equipment, online photo services, photo events, confences, workshops.

The times I’ve promoted niched products, I’ve felt like a sniper, shooting at demand for long tail demands for which people are willing to pay to make the pain go away, or bring themselves pleasure, or a combination of both.

Generally, you’d need to promote maybe 3 to 5 of these types of products to generate a decent income.

Going Vertical

When promoting offers such as CPA offers, you’d realize that these tend to address big markets – dating, finance, gaming, downloads, travel, fashion – some of Neverblue’s top verticals. With verticals you’re dealing with entire sections of a market – within the finance vertical, you’d have credit cards, insurance, credit scores, financial profiles, stocks, mutual funds, forex, etc.

So when you promote a vertical, you’re addressing a potential market of millions (instead of just thousands in the case of most niche markets). The promo style is different too, which is why most CPA affiliates favor paid traffic.

You’d probably hear the familiar refrain that CPA marketing is a volume game. The more traffic you buy, the more leads you generate, the more you get paid.

In contrast to more specialized stuff, the key is to become a dominant player with each offer you promote. While niche marketers might be content with generating $5,000 per month with a niche product, the CPA marketer might aim at $5,000 per day or more in revenue to make their business model viable.

The CPA marketer is often arbitraging traffic. If your commissions exceed your traffic costs, you’re in the money. In most situations, you’d want to go for the offers with the highest potential in terms of traffic (ie: demand), scalability (how big you can grow the offer) and importantly for affiliates who think of themselves as business owners – your bottomline (how much it will put in your pocket at the end of the day).

My advice for newer affiliates is to find an offer that has potential to scale to something big and aim and work towards at least $1,000 or more a day in revenue. It’s only when you make this a goal in your overall business strategy that you will experience bump in your business and your profits.

24 comments on Understanding a Niche vs a Vertical and the $ making difference

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    November 6, 2012 at 12:31 pm (2 years ago)

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