I have been making money off the Internet for several years now and have had many websites fail and many websites succeed (succeed meaning they make money passively, fail meaning they don't do anything). Now that I understand how the system works, I understand one of the biggest factors to building a successful website: doing proper research before even starting the process of building a website!
Many people (myself included, when I was a beginner) go about trying to make money online in the wrong order; they have an idea and then build a website based on this idea and then later on hope it pays off. This can cause many hours of work and frustration for a project that never makes a cent, and will cause a lot people to give up on their dream of making money online forever.
What would the correct sequence of action when starting a website to make money online?
Do your research first! What exactly do I mean by that?
Google provides the data for how many times every word (also known as a "keyword") is searched for around the world on a monthly basis. If you go into Google and search for the "Google Keyword Tool," you will be able to look up any keyword you can think of and see how many times it is searched for on a daily basis.
You can also look up the value of that keyword if it is used in a Pay-Per-Click (PPC) campaign. In other words, you can look up how much advertisers will pay Google every time someone clicks on a link and generates a lead for that company. Certain keywords are worth more money than others. This is because the payoff is much higher for certain industries than others (a click for "health insurance" or "buy car" will be much higher than "hair brush" or "white socks"). This is because someone interested in buying health insurance or a car has the potential to spend A LOT more money than someone who might be interested in purchasing a hair brush or white socks.
So why is this information important to someone who is trying to make money online?
Well, with this information we have some very important metrics related to a keyword: how many searches there are per month for that keyword and what the value of that keyword is as a paid lead (also known as the Cost-Per-Click or CPC). We also know what percentage of traffic a #1 ranking in Google will bring on average: 42%. We also know how much Google pays it's publishers (i.e. the people who place their Google Adsense on their website): 68%. We also know the percentage of people who land on your website that will click on a paid link from Google on average (assuming good Ad placement): 4%.
So what can we do with all these numbers?
We can calculate the minimum amount of money a website can make monthly when it ranks for a specific keyword in Google. I say minimum because Google Adsense is generally the lowest money making method for monetizing a website online. It is also the easiest and that is why it is the introductory method I use, but once you become more experienced in making money online, you will learn other monetization methods that can make you much more money with the same amount of traffic to your websites.
So how do I calculate the amount of money a website can make if it ranks #1 for a specific keyword?
The formula is:
(Number of Searches) * (Cost Per Click) * (.42) * (.68) * (.04)
The .42 is the average percentage of visitors that will land on a website that ranks #1, the .68 is the percentage of earnings that Google will pay its publishers, and the .04 is the average percentage of people who will click on your website when they land on your page. So if for example, you look up the keyword "mountain bikes" and find that is searched for on average 45,000 times and has an average CPC of $1.00, this would be its monthly potential:
(45,000) * (1.00) * (.42) * (.68) * (.04) = $514.08
You would earn about $514.08 in passive income if your website ranked #1 in Google for "mountain bikes" and you put Google Adsense on your website. If you were to monetize with something like Amazon Associates, Ebay Affiliate Network, Commission Junction, or something else, your earnings could be much higher than that.
*Note: If you want to look up some keyword values in the Google Keyword Tool, be sure to look up the EXACT match keywords and not the BROAD match keywords (this is because we want to use only searches that type in that EXACT keyword, not keywords that includes those words or have some mix of them). Also be sure to use the GLOBAL average monthly searches instead of LOCAL (this is because we can drive traffic from all around the world to our website, not just our country).
So now you know the minimum amount of money you will make when you rank #1 in Google for any keyword by using this formula. To start playing around and doing a little research, check out the Google Keyword Tool. You can also watch a full free VIDEO lesson of me doing actual keyword research using the Google Keyword Tool.
The next step is to figure out how competitive each keyword is by learning how to judge the current top 10 ranking websites for those keywords in Google's search results. You can do this by checking their PageRank. If you want to accurately figure out if YOU can rank a website for one of those keywords without too much work (because remember, if it's too much work, it's not worth it - easier keywords can be found), you can watch the free VIDEO lesson of me doing competition analysis for keywords using PageRank.
I hope you're starting to get an idea of how regular people ACTUALLY make online...by doing research BEFORE they make the website!
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