When you sit down to build a new website, how do you choose the market?

Do you go for the long-tail, niche markets or do you believe in the saying "go big or go home?"

If you listen to many of the "gurus" in the internet marketing business, you probably choose niche markets and shoot for the long tail traffic. There is a lot of talk about how much easier it is to rank for these smaller niches, how targeted the traffic is when you get it and quite a few other arguments in favor of the niche.

Well, before I give you my take on it, let me ask you a question…

Where are those gurus making their money? In the little niche markets they talk so much about or in a big, competitive one - the make money/business opportunity/internet marketing market?

The internet marketing market is really a subsection of a much larger one - business opportunity. Long before the internet made the cost of entry so low, there were plenty of other business opportunities being marketed to people who wanted to earn some extra money. And just like now, there were people who were successful at it and there were (many more) who were not.

In my opinion, the so-called long tail, niche markets are not the place to be doing business. They have a limited audience and only so much profit potential. Even if you find one that pays well, whether through Adsense, affiliate programs, or whatever, you're only going to be able to go so far before things level off.

If you choose a big market, there are always going to be people to sell to and backend products to upsell them to.

That's not to say the long tail, smaller markets are bad. But what you need to do is look beyond the here and now and see the bigger picture.

Take the weight loss market for example. You might build a site about treadmills, let's say. That can be a highly focused site hitting the long tail for that sub-niche of the weight loss market. But you can expand it.

If you choose a relatively generic domain name, rather than my-favorite-treadmill-site.com, you can gradually back into the larger market, one sub-niche at a time.

In two years time, what would you prefer? A whole bunch of small, highly targeted sites, requiring maintenance and possibly customer support, or a single large site in a big market needing the same?

I know which one I would choose.

There was an interesting post on James Brausch's site today called What Do You Do? In it he discusses the most common reasons that people don't get traffic to their sites.

The number one reason is that you're not offering anything that people really want.

He suggests a simple way to determine the potential for a product or market. If you went down to your local mall and asked 100 people if they would be interested in your product, what percentage would say yes?

If you sell a product that helps people lose weight, get out of debt, make more money, or get more dates, odds are you would find more than half of them would be interested.

If you sell "barstool waxing kits" (his example) chances are very few, if any, would be interested.

That "shopping mall niche research" technique translates very well to the web. If over half of any visitors to your site, regardless of the source or how targeted it is, are likely to be interested in what you have to offer, you've got a lot better chance of selling them something.