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Finding a Good SEM Niche in ’06 – An Intro to SEO Economics

Online marketing information can change quickly This article is 15 years and 163 days old, and the facts and opinions contained in it may be out of date.

I did a session at SES Chicago on “Developing Your SEM Niche”. I think the only coverage was at WPN. It was the first time for the session, and I had some great panelists to help make me look good, but the content covered and the perspective I approached it from is still quite fresh in my own mind. The idea for the session was based around finding different methods of developing a profitable niche in the world of search engine marketing, and the process of developing the idea has helped to re-kindle my fascination with economic principles which I only got to touch upon and learn about briefly during business school. You can view the original presentation here.

Although, I won’t do my fellow panelists justice, I remember Greg Jarboe talking also about applying demographic information and trends to find a niche. This is a fascinating idea. I won’t drop the gem that he spoke of, but a part of it was understanding the age demographic of baby boomers, and an untapped market that would be available in a few years. That type of forward thinking is critical to developing a niche. Patricia Hursh explained her road to specialization in B2B search engine marketing, and Justin Sanger described his path and vision in the niche of local search marketing. Nacho Hernandez spoke about marketing to the Hispanic audience. Thanks to all four of them for helping make me look good (or better at least;))

Below I have listed my notes and outline with links for your viewing pleasure.

Step back from search engine marketing for a moment
A. Economics 101 – Specialization

  • Specialization (wikipedia – economic specialization)

    The idea of a SEM niche specialization session grew from the basic economic principle of comparative advantage. When I think of economics, Adam Smith is always the first thing that pops to mind, so I thought I’d find a quote of his, despite him not really having an incredible amount to do with this post, this one seemed quite valid:
    “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
    B. Trade Advantages – comparative vs. absolute – i. Absolute advantage – wiki def
    ii. Comparative Advantage – wiki def

  • Absolute advantage goes to the wiser more experienced marketing folks and SEO pioneers –
    The sagely more experienced SEM/ SEO’s are mainly well paid because of the trust and reputation that they have earned within the industry. They command higher rates due to increased demand on their time because people want to work with people that they can trust (especially in a highly conceptual multi-correlative field). The best are trusted due to their track record of success, and are able to coordinate successful programs. They are able to be project managers and find good people to teach and direct. Newer folks are happy to learn from a trusted source, and offer quality services at lower rates for the opportunity to learn new techniques.

  • Comparative advantage goes to newer, hungrier SEO’s with a surplus of time available for research
    -New SEO’s have an advantage in this industry due to the speed at which information moves. After attending my first search conference only two short years ago, I wondered how people had come to regard my observations as highly as they had. I have been around the web for quite some time, but had only been actively practicing SEO for a about three or four years prior. Many folks in this business have been doing it much longer than that. What I came to realize is that those that were highly respected, and had been doing it longer, spent much more of their day actually working and applying the knowledge rather than learning new things. The REALLY good ones, were awesome meta-learners, who have learned to learn better in their years. They also learned that there was great opportunity to trade with newer, hungrier, more specialized folks for mutual benefit. New SEO’s had the advantage of spending more time learning about new concepts and were cheaper labor wise.

    iii. Core competencies –
    Establishing core competencies in an angency is critical to success. Focusing on what you are good at is key to establishing a good SEM niche. SEM’s have a very diverse skillset
    The very diversified skillset of a good search engine marketer is what makes it a specialized niche occupation. There are a variety of different skills that have not traditionally come together in a vocation previously. For more on the skillset required of an SEO please see the difficulty in hiring SEM staff

    2. Abundance mentality vs. Scarcity Mentality
    Information and knowledge are funny things. Timely information has immense immediate value, but knowledge is long term. Deciding which information is appropriate to share, and at what time is a fundamental part of understanding internet marketing and the new information economy. People flock together for new methods of understanding and organizing information and the mentality of folks comes out whether on an e-mail, chat, message board, blog, forum, or in person. Deciding when to share things and with whom helps to create an abundance mentality, or confidence in what a person is saying.

    i. Abundance mentality – lots to go around
    ii. Scarcity mentality – get mine while the getting’s good As I wrote about a bit in a series of articles called SEO is a catchphrase, there are several types of ways you can focus on a niche and make effective returns on your vocational efforts. There are threats and opportunities to each one that make viable niche opportunities.

    3. Web Design and Development
    a. Threats
    i. Oversaturated marketplace – everyone and their cousin can build a website
    ii. Commoditization – web templates, online builders

    b. Opportunities
    i. Standards compliance

    1. Accessibility
    2. Usability
    3. Mobile compliance
    4. Natural crossover between SEM

    ii. Conversion optimization

    1. Split testing
    2. Eye tracking, expected locations ecom elements– other studies

    iii. Value add partnerships and affiliations

    1. Good consultants will have an abundance mentality
    2. You should too – leads for knowledge

    iv. Server level issues

    1. Programmers with an understanding of SEO are in high demand
    2. CMS rewrites
    3. Database and Tool development

    a. Google maps
    b. Google/Yahoo API’s
    v. Geovertical specialization

    1. Real estate
    2. Legal
    3. Medical
    4. Travel

    4. SEO Consulting / Project Management
    a. Threats
    i. Constant target of SE’s
    ii. Ambiguous gray area for many techniques
    iii. Personalization/ Further Segmentation
    iv. Constantly moving target

    b. Opportunities
    i. Bridging the gap between marketing and technology
    ii. Having definitive answers
    iii. Moving towards traditional marketing
    iv. Training in house SEO teams

    c. Utilize a network of people smarter than you
    i. You are the person looked to for answer
    ii. Don’t guess at answers
    iii. Have “coaches” or people you listen to in different areas iv. Learn new things everyday – use the research opportunity
    v. Don’t take on projects you can’t handle
    vi. Give and you will get back

    Some of the areas that I am still just always dabling in are paid search management, public relations online, and affiliate marketing. I am still by comparison quite unskilled and undereducated in these two fields, so I won’t burden you in any more reading in this post, but they are definitely valid SEM niches with several threats and opportunities.

    5. Paid Search Management/ Public Relations
    a. Threats
    i. Client poaching from distributors
    ii. Rising click costs – lower client ROI
    iii. Tough biz model for smaller clients

    b. Opportunities
    i. Lots of long tail
    ii. Large % of keyphrases unbid on
    iii. Yellow page adspend migration
    iv. SEO will certainly evolve into online public relations in many forms 6. Affiliate marketing model
    i. Comparative advantage is rationale behind affiliate marketing vs. in house SEO
    ii. Affiliates do what in house SEO’s can’t
    iii. Affiliates are the ‘renaissance people’

    Related reading:

    If you have or know of good resources on choosing an SEM niche, let me know, and I’ll be happy to add them.

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