1. Initial Brainstorming

This first step is best approached with a very open mind and a notebook and pen handy. The idea is to seek topics that are outside your current realm of knowledge. One of the best ways to do this is by reading blogs.

Bloggers come from every walk of life, and you will find blogs with information on almost any niche topic imaginable. Best of all, bloggers provide fresh, timely information.

Start spending some time reading some random blogs. A good starting place would be at blog directories such as Blogdex or Technorati. As you are reading, you'll discover many different topics being discussed. Many of these you may have never heard of before. Start writing these down.

Example: You found yourself reading a blog post that described the blogger's recent experience at a demolition derby. Maybe you don't know much yourself about this niche, so you add "demolition derby" to your list.

2. Keyword Research

Once you have a list of several possible niches, the next step is to find out what keywords and keyword phrases people are using to search for this and related information via the major search engines. Good Keywords is a free Windows software you can download that will help you do just this. With this program, you can type-in a topic from your list and the software will begin to uncover many related keyword phrases being actively searched for.

It takes time to get the hang of this software, but once you master it you will be able to generate large and valuable keyword lists. After you uncover at least a few dozen related keyword phrases, save your list and move onto the next step. If you are not able to uncover many related keyword phrases, chances are there is not much potential here and you should start over with another topic from step one.

Example: Using Good Keywords or a similar tool, you enter the term "demolition derby". You soon have a large list of related keyword phrases people have been using to search for information on this topic, such as "demolition derby video" and "demolition derby car for sale".

3. Secondary Idea Creation

Read through the keyword list you generated. Some of your keyword phrases are going to give you ideas for other target audiences you may want to explore in the future. Take some time now to write these new ideas down while they are still fresh in your mind. Save this information for later reference. You can never have enough fresh ideas to explore when trying to uncover under-exploited niche markets.

Example: One of the keyword phrases in your "demolition derby" list was "demolition derby game online" - you note that later you should explore what other types of online games people are searching for.

4. Niche Potential Analysis

If you used Good Keywords to mine for keyword phrases, you will have also been provided with an approximate number of times each of these terms was searched for during the past month. The next thing you need to do is compare this number, representing potential search engine traffic, with the number of websites already catering directly to these searches.

To do this, start by taking your keyword phrases and do an exact phrases search on each of them at Google, making certain to surround your keyword phrase in quotes. Write down the number of results google brings back for your search. Next, compare the number of monthly searches for each phrase to the number of Google results.

If you are lucky, you will discover that some of your keyword phrases with good monthly traffic don't have many results in the search engines yet. If you find that you have uncovered a niche that has several keyword phrases with a high number of monthly searches and at least a few of them have a low number of results in Google, chances are you have found a very good niche to exploit with your next online project. If not, go back to the list you created in step one and repeat the process.

Example: You discover that the phrase "demolition derby car for sale" is searched for around 700 times monthly, but brings back only 486 results in Google and the term "demoliton derby pic" receives several hundred searches a month but only returns 258 results in Google. You are very happy to have discovered a potentially hot niche with good under-exploited keyword phrases to target.

Although there are several costly and difficult to master programs available that can help you discover unique target markets, the system above has proven to be an effective free method for uncovering niches to profit from. Apply it today and be on your way to niche marketing success.