Domain Name Traffic Converts Twice As Well As Search

Don't take my word for it..  ask Google  :)

Frank Michlick sends this link to his blog featuring a report with the findings of a study by Efficient Frontier..

Quote: “..When we analyzed the results, we were shocked. We didn't expect to see that domain park sites can bring in the quality of traffic necessary to result in twice the conversion rates, at a cost-per-click that's equal to that on search.."

Well, hardy har.. har har har  Put "that" in your pipe an smoke it Mister: "I want to remove this low converting domain traffic from my Google adwords program."  :)

Google's Adsense partners include Sedo and Oversee (domainsponsor)..  full report here. The way I read this is: "If you get 5 million visits a month to your network of domain names then that is the equivalent of getting 10 million visitors a month if you were a search-engine".  The ramifications of this are HUGE ..  Buy domain names.

Comments

[Ed]

So, if goog stock is trading at 45x earnings then domain traffic is worth 90x earnings correct? oh wait I forgot about branding, the strategic advantage of owning the traffic, the decreased cost in general and admin cost, etc.

***FS*** Ha .. good point.. Seriously though -- it just showshow undervalued some names are.

[Philip Corwin]

Very interesting, given the information in the NY Times article on Google this past Sunday that their algorithm tweakers refer to parked pages as "web spam".

Perhaps we should refer to their results as "search spam".

***FS*** "webspam" huh.. that webspam is propping up their stock price :)

[Isabel Wang]

Um, that document basically advocates typo squatting?

***FS*** Not at all.. you are "completely" misinterpreting..

"What makes domain ads unique is that it helps our clients reach users who are in the final stages of the buying cycle, notes Hanson. These are users who are actively inputting a query into their browser, specifically looking for our clients’ services. Google’s AdSense for domains ensures users are served relevant advertising when they input a non-functional domain name into their browsers."

Skip down a couple of sentences and Hanson adds:

“It’s a perfect fit... our clients discover new customers they would have otherwise missed.”

But how can this be the case if these folks are "in the final stages of the buying cycle"? Is he suggesting that a ready to buy prospect will somehow change his mind if his mistyped URL didn't lead him to a parked domain featuring the vendor's ads?

And lastly:

"Domain park sites generally convert at a rate of over 5%, while search and content conversion rates are at about half that."

I own a handful of domains, and I would love to believe that I can do advertisers twice as much good by not developing them - but does the same apply to Google? Would it be able to double advertiser conversion rates by dismantling its search engine?

***FS*** Isabel.. what exactly did you think the world's consumers were looking for when they typed 'loans', 'shopping', 'travel' in their search box at Google?.. How is the address bar different? You are completely missreading this quote. I can not speak for typosquat trademark variants because that is not the business model I am trying to advocate.. However, what exactly did you think people were looking for when they typed 'personal loans' in their google search box? How is owning the .com version of a generic name any different? Busy day for me here and perhaps I'm missing the point you are trying to make.. But a consumer can shop 'Bank of America', 'WAMU', 'Wachovia', etc and then "still" go to personalloans.com (the generic) to close a sale.. This is NOT about typos of brands.. it's about generics and the power of owning them.

[Dan]

Hi,

I do not look at this information as so much of a plus for parking domains...as I do the bigger plus... that finally a major marketing firm is just now realizing the value of specific keyword domain traffic...In turn their major advertising clients should be made aware of this so they finally "get it" and will also see the power of: "Buy The Domain - Not The Keyword.

Firms like this Efficient Frontier need to switch the focus of their business from PPC advertising busines into purchase ~ SEO ~ Keyword domains for their clients and drive the traffic directly to the clents order page...not to some ladder PPC landing page.

Peace,
Dan

[Isabel Wang]

That are two things that really bother me about this case study:

1. Hanson's quote specifically mentions "when customers input a NON-FUNCTIONAL domain name into their browsers". It certainly sounds like an encouragement to typo squatters: go and register variations of well known products so you can capture type in traffic from ready to buy customers. Advertisers will thank you for it!

***FS*** It's important to ask what they classify non-functional as? Are they counting 'parked' in that category? Those names are very much functioning (from a technical perspective). There are plenty of long-tail (longer less frequently typed) strings which garner generic intent traffic for nothing more than the keyword weight of the name (nothing to do with brands).

>>2. Hanson doesn't distinguish between generic domains and more obscure ones which search engines and parking services have MUCH less success matching relevant ads with. I'll go back to my example of http://www.ukcolo.com, on which GoDaddy is running Colorado bed and breakfast ads. These advertisers are most certainly not getting 2x the ROI compared with search and content ads.

***FS*** You're right.. but watch that name. Many of these systems automatically rotate and test different ad-content to see what converts. "UK colo" sounds like people looking for "Co-location/hosting services in the UK", a very lucrative generic niche (lower taxes in the UK/Ireland). That's patently generic and the provence of you, I or anyone.. nobody could equitably claim an all encompassing exclusive right to that name considering the myriad of services that could be offered. So as bed and breakfasts it may not convert (unless there was a former B+B site there) but once they get the optimization right.. Pow!

>>I'm also perplexed by the graphic at the end. Hanson's conversion rate skyrocketed initially, but dropped off significantly during subsequent months. What's going on there?

***FS*** I don't understand that dynamic either and would love to learn more.. I have never seen a chart like that in my years in biz. Could be implementation specific.

>>>In any case, I totally agree that generic domains and the type-in traffic they receive are super valuable. BUT - I'm not sure that owners of generic domains are putting their assets to highest and best use by indefinitely maintaining them as parked pages. There isn't good enough domain parking technology yet to turn parked pages into engaging destinations that visitors don't just inadvertently land on, but actually enjoy coming back to.

***FS*** I agree with you completely on this point.. It works but it's not pretty.. and there is tons of latent value and opportunity to do better.

>>I'm fascinated with Richard Rosenblatt's vision of turning generic domains into community sites that visitors can sign up for and participate on. A passer-by who makes you a few cents now could make you tens of dollars as a registered member!

***FS*** I am genuinely hoping for somebody to elevate implementations and take things to the next level.. haven't seen enoguh of Richard's specifics to know if he will be the guy.. but I agree , what he says sounds good.

Thanks sincerely for your comments.

[Snoopy]

Why did conversions rates on the graph rise to 7.5% then fall back to about 2%?, and what are the "search sites" that the domain park sites are compared to it? If this is a comparison to google.com and yahoo.com why is domain traffic being heavily marked down by smartpricing on the basis of conversion data, surely domain traffic would be given a score of 1.0? Is this actually a comparison to leading search engines, or is it a comparison to something else?, the case study doesn't say.

Given the results the case study is completely at odds with what is happening in the industry in my view,

(from the Marchex research report)

“Currently, Yahoo is in the process of communicating to the domain channel what each partner’s score would be in a post-discounting scenario, but Yahoo has yet to implement discounting…..We have conducted numerous channel checks to determine the score for many types of businesses in the domain space. Results have been mixed, with some portfolio owners receiving higher scores than others. However, the “purest” score we have come across is 8.7 out of 10.”

On thing is definite though, this “case study” will now be stretched to its rubbery limits and used in countless hyped up press releases.

***FS*** My TQS (traffic quality score) from Yahoo implementation today was 10 out of 10 on the highest traffic type-in feeds. It should have been 20 out of 10 imo. I agree with your comments on the wierd chart which must have been skewed by internal implementation at the test subject.

[Snoopy]

***FS*** My TQS (traffic quality score) from Yahoo implementation today was 10 out of 10 on the highest traffic type-in feeds. It should have been 20 out of 10 imo. I agree with your comments on the wierd chart which must have been skewed by internal implementation at the test subject.

//////////////////

Congrats Frank, that is huge, I would have expected you to have about the highest score around.

***FS*** I appreciate but Marchex must have similar.. perhaps safe harbor posturing because they're public.

[Snoopy]

I appreciate but Marchex must have similar.. perhaps safe harbor posturing because they're public.

///////////////////

I guess they might also get a 10 score, I think if the raw figure were disclosed (above 10) it would be lower than yours. There is a level of junk in the portfolio and if Marchex got a 10 it would be the good quality stuff propping up quite a large group of low quality names. Based on what Jordan Rohan said in the research report I wouldn't have thought they would get a 10, I wonder which partners he has approached to get his figures on others quality scores.

I compiled a list of Marchex's top names by ovt score a while ago, I think the portfolio they own is very much a mixed bag (though they are doing housecleaning). Then there is the link pop stuff.

If you run through their biggest names a good 30-50% are typo and spillover stuff, eg nicktoon.com, runescap.com, gleaner.com, cebupacific.com, manunited.com, aliciamachado.com etc

***FS*** Wow! Remind me not to backfill my portfolio with link-pop or problems while you're watching ;)

[DP]

Great article. Would have liked to have seen it go a step further and point out that many domains on parking pages may be for sale and their clients could own that traffic, indefinitely. If a domainer sells at a multiple of 10x earnings that earnings figure is based on the number at the bottom of the food chain. To the adwords buyer, paying the number at the top of the chain, that multiple looks a whole lot smaller.

***FS*** Well said skipper.

[Dan]

How is this for a senario in the next year or so:

It seems to me... that the all the top companies like Efficient Frontier...That control the what the top 500 PPC advertisers spend would be better off in the long run doing something like this.

Instead of spending all their current clients multi-billions of dollars on PPC ad campaigns.. if they were to "buy the .com keyword domain names and own them themselves and the SEO them for only that specific keyword to get them ranked in the number 1 spot on google and then instead of selling their clients a PPC campaign, they would contract each keyword domain out and its ranking in google to the highest bidder of their client pool and then... instead of charging them by the PPC model, charge them on some kind of actual customer conversion rate. This would benefit both advertiser and the marketing firm(s) in many ways.

Advertiser would get much more for his money, markewting firm(s) would retain "assets" that would only grow in value every day.

This as could/would create the greatest boom in .com keyword sales...because, sooner or later (hopefully sooner...LOL) The advertisers themselves would finally realize they could "cut out" the "middle man" and buy the keyword domains themselves...higher a few SEO "gurus" and build these "assets" up themselves and achieve a lot better results for their advertising dollars...than PPC

I for one would love to see a keyword domain "bidding / buying war" between these PPC marketing firms and their current advertising clients over all the .com keyword domains in every major industry and sector.

After spending millions and millions and millions on PPC advertising and all of a sudden you can find yourself saving millions in this area and obtain much better results for your advertising dollars... and to "top it off" your retaining and building valuable "domain assets" for your business at the same time your "denying" your competition access to these same assets...it really is a "no brainier".

Peace,
Dan

***FS*** Dan that is a BIG thought.. and very well thought throuh.. I'm going to digest but already think this is entirely possible.. The only thing is motivating catalyst to get the ball rolling.. you need that spark and bang.

[fantomaster]

While the idea itself is great, I'm afraid it's not entirely viable: Search results are a very finicky, extremely volatile animal, and the SEO efforts involved in keeping those sites in top position in the SERPs over a protracted period of time can actually be prohibitive.

Else, Frank, I fully agree with your take throughout your blog that teaming up domainers and search engine optimizers makes eminent sense and will probably be THE big thing to go for.

***FS*** Thank-you sincerely for your comment.. great comment.

[Dan]

Thanks Frank... I am not smart enough or a public speaker...

but it seems to me there is millions of dollars out there for someone to join the business speaking circuit...just doing one thing, "educating" every major advertising company and every major company on the planet about this.

Right now, most do not have a clue, but the information provided on your blog in the last 10 days or so, shows maybe a few people are "waking up".

A domain consultant "guru" who does this, will not only make himself millions on the business speaking circuit...but could be the "spark" that lights the fuse to the huge keyword domain market.

Best,
Dan

***FS*** Wow.. again . you blow me away with that stuff.. I never considered it. There are many people reading this who could do this. Maybe it will be you :)

[Dan]

"While the idea itself is great, I'm afraid it's not entirely viable: Search results are a very finicky, extremely volatile animal, and the SEO efforts involved in keeping those sites in top position in the SERPs over a protracted period of time can actually be prohibitive."

fantomaster,

I have to "respectfully" disagree...the days of webmasters tring to SEO a 1000+ page website for all its keywords is coming to an end.

If you are GICO and your spending 200K+ a month on Google ads for the keyword term "insurance".

But now, you buy the domain: insurance.com and SEO a 10 page insurance rate comparison type website with NO ADS on it...only links to GICO.com. You would have to be pretty bad at SEOing not to land and keep this website in the top 1-2 spots in Google for the next 20 years.

hypothetically...

Say you bought the domain: insurance.com for 5M...that's less than 3 years of your 200K a month advertising budget for your Google advertising campaign.

So, you could pay for the domain in less than 3 years, you now own & retain the domain for life, the domain as huge "street cred", And now the traffic to insurance.com is only costing $7.00 a year, plus some SEO "guru" your paying 80K a year. Plus, then traffic is much more high quality and converts much better...as we learned in the post that started this thread.

You company is now Fully associated with inssuance and thought of as the top main "insurance" player (branded)...huge.

Also, After you spend 200K in a month on your PPC for this keyword "insurance", the only thing you might retain is say 1,000+ new customers or clients and your 200k is gone. Having the domain, you always retain this valuable asset and it has appreciation value every year you own it, and since the traffic your getting is of higher quality and your converting 2x-3x more customers or clients it makes the PPC model look pretty bad.

Not to mention, the fact that people might not always remember a company name like "gico.com" (or how to spell it), but they will remember insurance or insurance.com...therefore you will get much more "referral" traffic through people searching for insurance.com through Google or typing insurance or insurance.com into their browser bar.

How many people refer to people to an google adwords ad?

You also have gained a huge advantage over your competition...because you have forever deny them access to such a powerful resource. Only one insurance.com available forever.

Peace,
Dan

[Dan]

BTW: I am open to it if anyone wants to contact me about it...as I have part two to this puzzle that will save all companies millions of dollars that do business on the internet...100% realted to domain names nad could a and should be included in a well rounded speech to these companies.

On another note;

Think about this simple fact...when anyone does a search they look at the top 3 "search results" first....not ADS!

I am sure a lot of members here including Frank...because of our time on the internet, when we search google you don't even really see the ads anymore because we are all "search pros" now and we know were we are going and its not to Google adwords.

How may google adwords does anyone here actually click with a serious intent of buying something in a years time?

I know I almost never click on a Google ad... beacuse I do not want to waste the persons money if I am not almost 100% sure I am going to buy their product or service.

Besides, I know how hard it is to actually make a PPC work...for a profit.

IT might not be quite time to sell your Google stock "long" positions, and start "shorting" their stock...buts its coming one day...hopefully sooner than later for domain keyword investors...LOL

Peace,
Dan

[Dan]

I know your not going to believe me me...LOL. but I intentionally "misspelled" geico (gico) to point out a few of other advantages.

1. How easy it is to misspell a Company or brand name. And that if your a large company you need to own the "typos" of your companies main website/corporate name....to save your "brand" and also benefit from all the free traffic your loosing to someones PPC parking service page.

2. Even though a word like insurance is generic in nature...and I do not think you could TM as such. However, you would be able to TM insurance.com (with ext) to build addition credibility and you could then "consider" going after any "typo" versions" of this domain in the .com extension...if it was worth while...IE. "typo" of insurance that was getting outrages amounts of typin traffic. You may or not be successful in this area.

3.The current "Overture" serachs a day shows:
geico 4,920.5 /day

insurance 19,070.9 /day

A huge difference...no matter how accurate Overture is or is not.

Peace,
Dan

***FS*** I believe you Dan.. thousands wouldn't .. but I do ;) thanks for your great comment.

[Robert Haastrup-Timmi]

Hi Frank! It amazes me that there still is not an Ad Agency out there that specializes in bringing clients directly to Parked Pages, or to specific domain owners.

I bring this down to two reasons:
1. Advertising Agencies who typically run banner ads on portals obviously don't understand the value of type-in traffic, parking pages and domains in general.

2. Domainers if you don't mind me saying here, also don't fully understand how to leverage what they have collectively with advertisers...at least not yet. For now its a very parochial channel.

I say this because, I happen to run Blackworld.com and would typically make on average $15,000 for a 30 day run whenever ad campaigns come along through an online ad agency, passively. Now, what would be interesting is to see at what point do these ad agencies begin to switch client campaigns to domains and parking companies? I doubt very much this will happen anytime soon because they really really don't understand the domain advertising medium at all, its way too revolutionary.

That leaves domainers with deep pockets to collectively buy out an Ad Agency of some kind, big or small for instance and get the ball rolling! I must admit, I was extremely suprised to pick up "DomainAdvertisingAgency.com" yesterday. Ok the domain is a long one, but because it was not taken, it tells me that perhaps our industry is just not ready at all to accept advertising from ad agencies or directly from vendors. If that is the case, then its a big mistake! Therefore we appear to be quite content to leave all our eggs in the two baskets of.."Google" and "Yahoo". I just hope these two baskets don't fall over and break all the eggs anytime soon! seems a very dangerous un-sustainable strategy to me. I like google, but the fact is our industry really does not have to rely on these guys for our revenue.

Perhaps we could set up our own domain outbound call center somewhere for instance and court vendors, agencies and keyword advertisers on google and yahoo directly. Place these ads with existing parking companies, domainers etc, both interms of ppc text, advertorials, content and reach media banners, even exclusives can be negotiated.

A massive global market without relying on G & Y will thereby ensue as more domain advertising agencies evolve...makes more business sense for the long term!

[daniel rueda]

Time for serious sincere major domain contenders to show their cards. Who has the finest platform portfolio of strategic keyphrase top level domains? Being conservative I guesstimate that 99% of all domains are bunch of garbage. Cpc puppy mills from hell. That will die a slow death as natural algorithm results disappear, making way for strategic social networked vertical domain distribution channels. All adsense programs die in 10 years as a word of mouth vertical social networks helps consumers find products and services by local referral only. Making the value of these huge mumbo jumbo portfolio owners worthless. Mumbo Jumbo thats why none of them will show you there cards. That could be the smartest thing they could ever do with there portfolios.

***FS*** Thats a big prediction.. will be interesting to see what happens .. thanks.

[fantomaster]

Dan,

>But now, you buy the domain: insurance.com and SEO a 10 page insurance rate comparison type website with NO ADS on it...only links to GICO.com. You would have to be pretty bad at SEOing not to land and keep this website in the top 1-2 spots in Google for the next 20 years.<

You're not talking from actual practical experience, I assume? (Ok, let's brush over that "20 years" prediction as a mere figure of speech. After all, search engines have only been around for about 12 years if you count the early Yahoo! and Looksmart versions as such - in actual fact they were simply directories, of course.)

Myself, I've been into SEO - amateurishly at first from about 1996, professionally since 1998) and there's preciously little I haven't seen in this sector.

To cut a long story short: It's not about "ads" making your rankings drop. It's an ever shifting ground, and competition (including the hard hitting kind) is growing fiercer every day. On page factors alone are no repeat NO guarantee even for temporary, short lived rankings let alone persistent ones.

And it's very, very much about links, as well. Plenty of them. Most of which you simply can't and won't control.

Where domaining enters the equation in a big way, however (beyond the obvious naming factors, of course) is the exceedingly strong bias the search engines are currently upholding in favor of vintage domains, preferably live ones. This is a veritable gold mine if you know what you're doing.

And it's entirely conceivable that classical SEO could be dead and gone for the most part, and pretty soon, too, if it refuses to adapt to this fact.

Again: I really like your idea and I'd be more than happy to see it work out, but at this point in time I'm afraid I just wouldn't want to bet the farm on it.

[2w.com]

allo/hallo , hi , y'all ,
@Dan ,
>> If you are GICO
>> and your spending 200K+ a month
>> on Google ads
>> for the keyword term "insurance".

hi , Dan ,
spending USD 200k+ a month for the keyterm
`insurance' ????

real ?????

***FS*** sure