The Best Kept Secret About Domain Traffic Sale Conversions

It's not just 2X ..  According to Rick Schwartz it can be sooooo much more if you implement correctly, laser targeting the domain to the content which the user seeks..  Makes sense to me. 

Quote: "Targeted traffic on items that can be sold online and is matched up to a website that can actually close that sale run at the rate of 3X-5X at a MINIMUM."

Who am I to second guess a guy with first-hand experience. It will be interesting to see what this report does to Google's and Yahoo's smart pricing models as the years wear on.  If you own domain traffic that converts "better" than their network traffic, how can they expect to keep that traffic long term and pay a discount for it.  There is too much demand and not enough traffic inventory ..  things are going to change at some point.

Comments

[AhmedF]

Not all things are equal. Domains included.

I remember at one of the TRAFFICs Benko talked about buying PPC (in the $xx,xxx range). He found domains did *not* convert better. How come no one heralds that analysis?

I'm sorry, but the way this is spreading is sorta ridiculous. It worked for clients in the automative industry. We have no clue what domains were used. What keywords were targeted for PPC. A lead is not the same as a sale. It talks about the content network, of which domains are a part of. Then it segways directly into domains ... content network != domains. After which, it says domains are at 5%, and content is at half of that.

So the content network (content + domains) were a 250% lift in leads, but content converts just as well as search, and domains covert 2x as well (100%).

Also - why did the conversion spike and then fall? A using searching and clicking on an ad is not necessarily the same as a user visiting a domain and clicking on an ad. Were there control tests performed there?

I could go on and on and on with questions, but I think I've elucidated my point well - lots of talk, little *real* data to back it up.

[Isabel Wang]

Frank,

Forget Yahoo! and Google. Domainers need to explore opportunities beyond getting higher PPC rates from search engines.

I recently read that Amazon's auto-recommendation technology is responsible for 30% of its revenue. Similarly, Aggregate Knowledge's personalization software helped Overstock.com generate $100M of incremental holiday sales.

So, imagine I'm shopping for X, an expensive product that retailers tend to sell at a high markup. While researching my purchase, I land on many of the related domains you own.

My type-in and click-through history could have given you a lot of clues about my preferences. By collecting this data, you'd have the ability to present me *AND* other visitors with similar behavior with spot-on recommendations. You could even build statistical models to calculate correlations: maybe new owners of X have a 80% likelihood of purchasing Y.

You'd be able to produce out-of-this-world conversion rates and retailers would pay enormous fortunes for your referrals.

But instead, you're stuck waiting for your domains to "optimize". Then you split Adsense revenues with Google, without benefiting from "in-network" traffic. I don't get it, Frank. This is not worth settling for. Better technology already exists; it's time for parking providers to catch up.

***FS*** Okay, you are a very clever person.. and you're right.. I think some name portfolio holders are getting there.. trying to kick it up to the next level. Soon come ;)

[Salman]

It is obvious companies like netshops like generic domains.

I think the best way to do a fair analysis would be for an ecommerce site. Say someone started on a brandable domain and was getting 2% conversions. Then switched over to a generic domain and conversions increased to 3.5% (all other things being equal i.e. WITHOUT changing the web design etc).

Also, are we talking conversions in terms of CTR on a text ad, lead or purchase? (I guess all three?).

[Martin]

Great blog here, Frank, thank you sincerely for your efforts.

As for this conversion report by Efficient Frontier - there is something really fishy about it, don't you think?
http://www.efrontier.com/efficient_frontier/customers/images/EfficientFrontierAdSenseForDomains.pdf
Why is there the Google logo plastered all over the report? Why is it called "Google AdSense for Domains case study" and not "Domain traffic conversion case study"?
Doesn't the part "Google's AdSense for Domains ensures users are served relevant advertising when they input a non-functional domain name into their browsers. Hanson finds this very valuable." sound suspicious? This is PR speak, not a case study.
There is no real data. What domains did the traffic come from, what keywords were they targeting, how did it compare to the search traffic keyword by keyword, how long did they test the conversions?
Also even if this report was real, they speak about online leads (email submission probably), not sales! There can be a vast difference in conversions (different phases of the buying cycle). Etc etc.

All in all, the report is PR bullshit, not a case study. Don't jump on the bandwagon and above all don't use this report as an argument about the great domain traffic conversion!

Generally speaking - conversion rates are all about targeting. If I owned hotels.com and put up ads for a car dealer in Nebraska, what do you think the conversion rate would be?
There can be a certain stable conversion rate for a domain + business combination, but domain + businesses? Domains + business? Domains + businesses (which is this case)? Bah.
This makes it even trickier to speak about a general conversion rate for a single domain, let alone ALL domain traffic!

I am really skeptical about this. And sorry, I don't believe Rick's comment about 3x-5x higher conversion rates either. Higher than what? What domains? Targetted how? What was on sale?

Just to make it clear: I am NOT saying the domain traffic isn't worth, I just want to say that we, the domainers, have to be really careful with generalizations (even if they are positive for our field).

Long rant.

[FX]

"""Targeted traffic on items that can be sold online and is matched up to a website that can actually close that sale run at the rate of 3X-5X at a MINIMUM."""
Rick has never tried to monetize his own traffic. This guy pumps up all kinds of things with out ever having seen any data first hand.

***FS*** Rick has always been one of the industry's biggest advocates but he has been selling web traffic since the late 1990's (before there was PPC) .. To his credit he get's the conversion concept and does monetize his own traffic.

[Sahar Sarid]

"Rick has never tried to monetize his own traffic. This guy pumps up all kinds of things with out ever having seen any data first hand."

Misinformed at best. If you only knew.

I won't go into details but Rick can if he wishes. Ask him about egold.com, ebid.com, and the days of 96,97, 98, long before ppc, long before most got into the game, when Rick monetized allot of traffic with direct affiliates.
So easy to come late to the game and shoot down the pioneers, not for the fact they haven't gone through it but for the fact you are quick to judge rather then first ask.

***FS*** Thanks for your comment Sahar

[Sahar Sarid]

"But instead, you're stuck waiting for your domains to "optimize". Then you split Adsense revenues with Google, without benefiting from "in-network" traffic. I don't get it, Frank. This is not worth settling for. Better technology already exists; it's time for parking providers to catch up."

Work/time ratio my friend. Where do I get more and do less?
There's something to be said here. Just because you work harder does not mean you make more.
With the kind of income many domainers pull in why work hard? why not live life to the fullest? And why not do what you are passionate about?
Another issue is timing. There's time to buy there's time to build. Domain purchasing was, and still is, a unique opportunity in time. As time is limited, you have to choose where to put your time. Many domainers rather concentrate on continue building their portfolio rather then put time into development.
And lastly (for now anyways), development requires a different skillset then acquiring. If you compare to RE then simply see the differences between a property owner to a property developer. I truly believe most domainers, to the most part, cannot be developers. They don't have the skills, the knowledge, what it takes. They need outsiders to come and do that (maybe you?) and until then, they do what they are good at, which is.. buying.

***FS*** Great perspective Sahar.. said like somebody who knows about such things

[Isabel Wang]

Frank,

You and Sahar are both assuming that your choices are either/or. There are only 24 hours in a day; you'd rather spend as many as possible finding/buying domains. As such, it's better to leave money on the table than get sidetracked. But what if someone else could do the work - for free - so that you can have your cake and eat it too? As Richard Rosenblatt puts it:

http://money.cnn.com/magazines/business2/business2_archive/2006/12/01/8394990/index.htm
"If you can make that much doing nothing, what if we added some Web 2.0 sprinkle so that people would come back - user publishing tools, social networking? What if we built a platform where we could snap that into as many domains as we wanted? That's when the lightning bolt hit me: You'd have a company that generates its own traffic, generates its own content, and monetizes itself."

Think about it... every generic domain is a community waiting to happen. Each attracts experts who want to broadcast their knowledge, customers who are eager to share their experiences, and shoppers who are looking for such content. Why not let them have at it - and generate more advertising inventory for you?