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Why You Must Go Deep In The Changing Internet Business Landscape

By Yaro Starak
15 Comments

Deep LandscapeOne of the most popular articles I ever produced for this blog was – How To Make Money Online Using Niche Content Websites. It struck a cord with many because it made people excited when they realized how simple it was, at least on paper. It offered a business model that any person with moderate web skills could implement. To the average net user it wasn’t too hard a process to set-up a website, work on it to the point that it makes two to three dollars per day and then move on to do it again.

The niche content site business model is still viable on the web. It’s probably not as easy as it may have been when I first published the article, since more people are doing it now, thus increasing competition. Google AdSense doesn’t perform as well as it used to, but it’s not that hard to make $2 per day in Google AdSense income from a single website provided you find niches and build traffic. The fact is there is a long tail of niches online and we are far from saturating every niche in the long tail, or should I say every profitable niche in the long tail. I doubt we ever will and it’s not likely there will ever be enough competent niche content site builders to fill every niche, so this business model likely will always be available, just don’t expect to become a millionaire doing it.

The problem with the set-up and forget model of niche content site building is that you don’t ever have any leverage points. You make a few dollars per site and it’s very likely some sites will stop earning while others will suddenly increase. You won’t have a method to predict these events, which is a scary way to run an online business.

Whatever the whims of search traffic will dictate the money you make. Since you don’t have an email list or a means to build value with this model, you don’t have a way to exponentially grow your income. Yes you can keep adding a few extra dollars per site you build but you will need to really perfect a system in order for that to work often enough to make you rich. Only a few very talented Internet marketers could do that, and if they are that talented they are smart enough to know there are better ways to make a lot more money online than building little content sites for AdSense dollars.

Going Deep

In the original article I wrote I made mention of something Perry Marshall referred to in his Renaissance Club Newsletter (aff), which incidentally is still the cheapest way to get a copy of his Definitive Guide To Google AdWords (aff) – plus the newsletter and bonuses you get are well worth the price of admission too.

Perry talked about two types of business people called underachievers and overachievers.

The underachiever is the type of person who would use the niche content model and just replicate it as many times as they could. They may enjoy some success but whenever there is a correction, say Google changes how AdSense works, which is just what happened a few months ago (I suspect a lot of niche content site builders were hurt when that happened) or the search index is updated and the sites are not ranking as high as they were, or possibly at all, suddenly big chunks of their income disappears. It’s a scary way to make money online because it’s so short term and random and dependent on Google way too much. Short term thinking is not a good idea for long term success.

The overachievers as Perry referred to them, are businesses and entrepreneurs who, when confronted with a popular and profitable niche or one that at least has demand and not many suppliers, decide to do something I refer to as “going deep”. Going deep means looking at how you can further leverage an untapped niche for dominance. This may include any or all of the following ideas:

The focus remains on one single niche and a business is built around it, rather than attempting to be a jack-of-all-niches entrepreneur.

The Back End/Front End Funnel of Love

In order to really make it big online – and that’s sustainable, multi-million dollar big – Internet marketers need to follow the successful systems of direct marketers who have come before us who worked offline. The guys and girls who used catalogues and direct mail, who had one shot to make it rich because a mail out COST MONEY, unlike today where an email blast barely costs at all.

Back then you couldn’t just take a risk and see what happens and put out untested marketing based on a strategy-lacking formula, you had to know your back end and the conversion rates for everything along the entire process. The advertisements, the promotions, the sales copy, the target market – every part of the front end had to work with a systematized back end in unity, with rock solid numbers that were predictable and dependable, at least to a certain degree.

The entire sales funnel was a crafted system, not an ambiguous trial and error stumble. If you didn’t test and optimize and maximize conversion rates and know your margins and lead value, you were not going to succeed. In other words, if I was a direct marketer working offline in the manner that I presently do online, I would suck bigtime and I think a lot of people reading this would too.

Thinking & Building Long Term

One good thing about building niche content sites is that it forces you to work and find niches. Finding a profitable niche you can go deep in is like striking gold and should not be something you take lightly. While Internet marketing may seem “easy” at times finding markets that are large, hungry and not serviced well presently, is not easy. You have to realize the potential when you find it, so that is why it’s important to understand all the tools you have available in your arsenal as an Internet marketer – and it goes way beyond what you do when building niche content sites – it means having some business skills.

If you have been reading the run of free report ebooks that have been circulating or you were ever touched by an Internet marketing product launch you will know one thing for sure – opportunity seeking without follow through is useless. You must take action, you must focus on one opportunity and if everything goes well you should go deep in whatever you are doing.

Preeminence

Establish Your PreeminenceJay Abraham talks extensively about establishing “preeminence” in your market. This means to be perceived as an expert in what you do, better than anyone else, whether or not that really is the case in terms of what you provide compared to what your competition provides. It makes the purchasing decision easy for a customer if they are interested in your buying from your marketplace – you are by far the best choice given your preeminence, and of course that means you can charge more too!

In my opinion, preeminence can only be established in a market you chose to go deep in because it gives you the focus necessary to first understand how to create preeminence in your market, and then how to sustain it. It is not easy to have preeminence or to deliver quality if you are a jack-of-all-trades marketer. In that case you are just like all the other marketers out there dipping their fingers into different markets, making shallow impact with no foundation for the future. Since preeminence is largely based on perceptions, you can’t be perceived as doing everything well – no one would believe you – you must aim to be the best solution to one group of consumers.

You and your business needs to be specialist, focused and built upon a foundation of a system that doesn’t just tap a niche for AdSense or affiliate or advertising income – you must be THE provider in that niche so you can charge more, provide more high end products where the real profits are made and still be making money in the niche years to come, despite competition and market conditions. With focus you can anticipate and adapt and leverage your status and position to deal with nearly all changing market conditions.

Stability and longevity are built around systems, a front end that is flexible and responsive to what the market does and a back end that works in a predictable, profitable manner. With this in place you can dominate a niche and make your millions because your level of expertize is greater, you meet the needs of your client to a higher degree and you can dominate your niche because you know your numbers better than the competition.

From a competitive standpoint knowing your system and business back end gives you the luxury of flexibility in your front end. You can out-compete by offering superior propositions to affiliates and alliance partners because your profits are not based on front end sales – again, the third sale (or somewhere in the back end) is where you make your money – so you can afford to give 100% of that first sale to your partners in order to crush the competition and capture the most leads.

By no means is this an easy thing to do. I’m presently formulating how my business structure will look like and I’ve only just begun to test whether there is even a market for me to go deep in that meets my goals and motivations. At least though I have the awareness to know that if I want big results, and I do, that I need to focus on going deep in my industry. I hope you do too after reading this article. If not, please feel free to ask questions by leaving a comment.

Yaro Starak
Going Deep

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15 Comments

  • Yes I agree with you, concentrating on the one nice market and creating the site around it really does halp a lot. I think your mentioned strategy is working in any market with hard or no competition.

    Thank you for sharing this story with me !

  • YARO – Great post mate – The back-end stuff is so so true… Think about some of the great “marketing” in the ‘real world’ – With their excessive marketing budget, if new coke customers only bought one coke, they would go broke very quickly …. A lot of printer companies sell the printers at near or below cost to make the $$ on the cartridges … If you have no back-end you have no business (quote me on that)

  • Hey Yaro – another nice article. I’ve noticed how it’s getting harder to make money on the front end on the net. Depending on the niche, it’s often a matter of acquiring customers at a break even and back ending… problem is, many people (in my experience) are too lazy to explore the back end, so they wonder why they’re not making any money.

  • Hey Will – are you noticing that front end issue just in Internet marketing niches or are you noticing across the board with all your clients?

  • Hey Pete – I will be sure to quote you :)

    Sorry I missed your Skype IM the other day too!

  • Great post Yaro! It’s vital that one positions himself as an expert in an area that he is targeting. This doesn’t apply to just IM, but every industry.

    People need to realise that it is possible to succeed in any industry. But in order to do so, they have to be the best in that particular area.

  • Thanks Leonard!

    I’m certainly seeing a theme repeated more and more as I study business and in particular Internet business. Concepts like the long tail, USPs, niche marketing all point to the same thing – if you don’t specialize you don’t make it big or you have trouble surviving long term.

  • Yaro – This is probably one of the best posts I’ve read on the changing landscape. Many of the home-based business folks I’ve worked with have already discovered the power of the niche in the “real world,” and some are beginning to see how that can be leveraged in an online marketing world.

    One of the most exciting things – IMHO – is that many niches can be just an extension of someone’s existing expertise. Learning to build upon that expert status is one way of tapping the potential of your niche.

  • Hi Yaro,
    Nice blog–Entrepreneur’s Journey. (I’m always proud of myself when I spell “entrepreneur” correctly;)
    Anyway, I totally agree that I most of us in internet marketing would be a lot more careful if we had to compete offline only. The pioneers like Claude Hopkins would probably be able to make a killing on the internet if they were around today.

    And as far as getting started in internet marketing, I personally thought that if I had every piece of software I couldn’t fail; so I wasted lots of money but worse–time–until I realized that you have to actually create something worthwhile to be successful. I wrote an article on my site called, “Internet Marketing: One Big Self-Licking Ice Cream Cone” that (sort of) covers this…

    Anyway, great site and blog,

    Charles Brown
    http://www.honestysellsbest.com

  • Hey Yaro – to answer your question: I have noticed a lot of transition in the online space from low competition / easy money in many niches to hyper competitive markets in which no one is making much money, on the front end at least.

    One client built a big business with a lot of traffic driven by Google Adwords with average order about $500 and cost per order $20. That was 2 or 3 years ago. Now clicks in that niche are 400% more expensive so the CPO is now $80 – that is *significantly* changing the dynamic of their client acquisition strategy.

    This is a pattern that I’ve observed across a number of industries.

    Competition in the offline arena is, if anything, letting up a little bit because the internet is so hot and marketing budgets are being diverted into the online area.

    Bottom line is, you have to start by creating uncontested market space through value innovation so that your marketing message can gain traction. “Me Too” strategies just don’t work.

    Will

  • Hi Yaro,
    Great post. I’m an avid reader of Perry Marshall’s stuff as well and everything you’ve said resonates with me.

    Chasing the long tail is of vital importance in my honest opinion, unless you’re a news broadcasting website or you ARE able to provide extremely useful information to a broad market. Which is tough :(

    Cheers,
    Kang

  • Yaro,
    As usual, you are able to make sense of changes in internet busness strategies. I continue to implement many of the suggestions which you make.
    This week, I began charging all of the Certified Anger Management Facilitators listed on my website $49 per month per site. To my suprise, no one complained as they all realized that I am the key to their success.
    I also increased the rates on my products and services without a whimper.
    Thanks,
    George

  • Hi George – I’m pleased you were able to implement something I talked about successfully.

    Good work!

  • [...] Why You Must Go Deep In The Changing Internet Business Landscape [...]

  • Hi Yaro,

    Going deep is one way for us normal people to establish pre-eminence. Those who are celebrities already don’t need to do this (at least initially).

    I am re-reading again a book by Edward de Bono and an Australian John Lyons. It is called Marketing Without Money. The idea is to offer such outstanding value that people talk about you. This has much more validity than self-promotion.

    This comment is really to alert you to this book. It has a different take on business that is very thought provoking, has real substance and is genuinely different. (No I don’t make money from its sales). You should be able to get it from a library.

    Going deep is one way of creating such outstanding value that others talk about us. A way that is available to all of us non-celebrities.

    Thanks for the post. Evan

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