Great questions. Allow me to answer each one in turn:
“The question is, how exactly should I proceed with setting up my site? Would I be better off researching forums or using tools like LongTailPro for niche research?”
> It depends on what stage you’re at. Have you chosen a niche? If yes, then you should know the problems that your target audience is facing. Then you should be doing keyword competitiveness analysis (using a tool like Long Tail Pro) to figure out the keywords you should be targeting for your website. If you haven’t yet chosen a niche, you should be researching the forums (or running a survey) to find out the problems various niches are facing.
“And speaking of niche research, should I be looking for a low-competition niche and gradually build an authority site in it using organic traffic (which can take a lot of time), or can I disregard the competition (unless it’s too high) and just leap in using PPC?”
> This totally depends on your risk tolerance and patience level. Low-competition authority sites still take time to rank in the search engines and start bringing in a good level of income. Do you have the patience for that? On the other hand, you can start generating sales right away if you launch a PPC campaign – but that campaign might take some time to make profitable (i.e. you might be making sales, but not enough to cover the cost of advertising).
I have one low-competition site that has brought in between $400 and $1000 per month in Adsense revenue for the past five years, and I haven’t touched it in three years. But it took over a year to start bringing in decent Adsense income.
On the other hand, I promote my health info products using PPC and have been making sales from day one, but it takes time and effort to optimize those campaigns so they’re profitable.
So basically you have to choose a route and stick with it – because all of this takes time.
Hope that helps,