It makes good sense to begin with topics that you are at least a little bit interested in, because that interest will show in your content and on the overall quality of your site. But of course, don’t restrict yourself to things you are passionate about, or even to things you think you know a lot about. For example, you may know next to nothing about scrapbooking, but it’s a very popular niche.

Generally, you want to focus on a niche with enough interest in it to give you enough traffic to profit from. But you don’t want to go with something so huge that your little website won’t get noticed.

Also, there are sites out there that show you the highest paying niche. Some of these niches are paying up to $30 per click on Adsense! But the problem is that most of these niches have very little traffic and competition tends to be quite stiff because of the high-priced clicks. Even though it’s paying a lot, you get very little traffic and those that actually click, may amount to only a few a month. So, personally, I think it’s not worth the trouble. You can check out this site for the highest paying niches:
http://www.rumler.com/google/adsense/top-paying-keywords.php

Ok, here are the niches:

1) Acne
Sub Niche: Acne scar laser treatment
- Search: 783/month
- Avg CPC: $4.89
Sub Niche: Acne blemish laser treatment
- Search: 500/month
- Avg CPC: $2.18

2) GPS navigation system
- Search: 5490/month
- Avg CPC: $2.13 – $2.85

3) Webkinz
- Search : 2090820/month
- Avg CPC: $0.14 – $0.22 (While it’s little but look at the traffic and it’s a relatively easy niche)

4) Hypnosis
Sub Niche: Hypnosis for beginners
- Search: 810/month
- Avg CPC: $0.92

5) Paintball
Sub Niche: Paintball guns sale
- Search: 7410/month
- Avg CPC: $0.99

6) Massage Therapy
Sub Niche: massage therapy benefits
- Search: 2190/month
- Avg CPC: $1.21 – $1.73

7) Yeast Infection
Sub Niche: Yeast infection remedy
- Search: 13290/month
- Avg CPC: $1.0

Stretchmarks
Sub Niche: How to get rid of stretch marks
- Search: 2430/month
- Avg CPC: $2.30

9) Mutual funds investing
- Search: 5730/month
- Avg CPC: $10.24

10) Stress Management
Sub Niche: Stress management strategies
- Search: 2190/month
- Avg CPC: $1.24

I find topics about everyday problems that are a pain in the butt for most people are the best niche for Adsense. The reason is because there are a lot of solutions out there and the best ways for the advertisers to get customers and exposure is through a lot of advertisement campaigns. They also have one of the best advertisements around and have one of the highest CTR (click through rate). Just check out the Acne niche, acne is a big problem to a lot of people and if you look at the ads on the sites with Adsense, you will see what I mean. Think about it, if you have a problem with acne and when you stumbled upon a site about acne and you see an Adsense advertisement “Clear your pimples in 24 hours”, wouldn’t you click to find out more on how you can get rid of the problem that’s been plaguing you?

Alternatively, if you are short of ideas for a new niche, you can sign up at this site and you will receive a niche each and everyday in your mail box. Each niche comes with traffic information, like how many times it’s being searched for everyday and also the price per click that it’s costing advertisers.
http://www.nicheaday.com

This next site provides very good information about a niche and is very helpful in your research. All you need to do is enter your keyword and it will display valuable information all in a page. It will also display keywords that are related to the keyword you have just entered. You may find a hidden gem under these results! It will display traffic stats for Google, Yahoo and MSN, cost per click, future trends and other valuable information. I personally use this site for my research and the best part is, it’s FREE.
http://tools.seobook.com/keyword-tools/seobook/index.php

Once you have a niche or keyword to target, the next thing you need to find out is how difficult it is to rank for this keyword. It’s a rough estimation but it’s good enough to tell me whether it’s hard to rank for this keyword. This is FREE too. Here is the URL:
http://www.seochat.com/seo-tools/keyword-difficulty/

The tools provided above are free and I personally think it’s enough to help me find a good niche for Adsense but of course, there are paid tools too. These tools will do all the above at a click of a button. It will save you a lot of time but what it’s doing is not something you can’t do yourself. They just do it much faster. If you are still new to this and prefer not to spend any money until you start to make some, I suggest you use just the free tools.

Paid Tools
Here are some of the paid tools that I personally use and find useful.

1) KeywordElite
All you need to do is enter a niche and it will display valuable information for you when it’s completed. The screenshot below is a snapshot of the result produced by KeywordElite. I used it on a niche that I’m thinking of getting into for one of my Adsense projects. The niche is “Dental Implants”

As you can see, the niche is hot. It has a lot of searches and the competition is not that stiff and advertisers are paying around $6 to $7 per click! You can drill down a bit more if you find this niche a bit too competitive.

2) Micro Niche Finder
This is another excellent tool. I prefer this one as compared to KeywordElite. The reason is because it’s more graphical. As you can see, at a glance, I can immediately tell whether a niche is difficult to rank for by just looking at the right most column called “SOC”. A green circle says there’s not much competition and easy to rank for and by looking at the “search count” column, I can quickly tell whether there’s enough traffic to earn from. Do remember it’s a niche tool and not a keyword tool, so the number of keywords returned is not as extensive as KeywordElite.

If you see properly, you will notice that the results returned from these tools (free and paid) is a bit different. So, my advice is to not just depend on a single tool for your research. Use multiple tools. But from the result returned, you can see that a niche that could be profitable will show up as potentially profitable on the other tools too.

Here are the links if you want to find out more about the paid tools:
Keyword Elite
Micro Niche Finder

Auto insurance (or any kind of insurance) is another great niche, however there is too much competition out there so you will be fighting with the likes of geico, allstate etc for top ten position. Auto insurance, with over 6100 search per day and an average CPC of $25 – $34, it’s one of the best niche for Adsense but the problem is, it’s also one of the hardest niche to rank! Estimated cost per day from Google shows that it averagely cost advertisers $280,000 – $460,000 a day! Now you know why Google is doing so well?

If you enter this niche, you will be fighting against Geico and other big insurance companies! I suggest you go after sub niches of auto insurance instead. Please see some of the results obtained from Micro Niche Finder below. “Insurance Companies Directory” is a better bet and at $5.82 per click, it’s one good Adsense niche.

Ok, that’s basically how to find good niches for Adsense. Enjoy and do let me know on what you think.