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July 19, 2007

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software domains

Hi Frank

Enjoy your posts.

Thought you may be interested in this Wall Street Journal article regarding viruses in web ads.

http://online.wsj.com/article/SB118480608500871051.html?mod=yahoo_hs&ru=yahoo

My question to you...

Do you think this may act to push the "leasing" of domains in lieu of...or should I say... as a supplemental approach to PPC?

Would an advertiser be encouraged to seek to lease 20 or 30 domains that are an exact MATCH to the keyword terms that the advertiser bids on in the Google / Yahoo advertising networks?

As an aside I currently hold Software Domains that represent 5 of the top 20 keyword search phrases for a particular high PPC bid price Software category.

Thanks for you time.

software domains

Frank,

I have a question with regard to domain leasing as a source of revenue for domain holders.

Please advise as to my methodology for a reasonable domain lease value.

Historically the domain averages 300 direct navigation visits per month. The cost per click on Google for a top 3 PPC listing result is $10 per click.

The domain is an EXACT match generic product keyword string.

The estimated combined average number of searches performed on Google and Yahoo per month for this exact keyword string is approximately 7000 to 8000. I will assume a 7% click thru rate for PPC listings on Yahoo and Google. That equates to approximately 400 to 600 click thrus on PPC listings per month.

An advertiser is willing to pay $10 per click.

My view is that a reasonable discount off of the PPC of say 20% to 25% would be attractive leasee's. The number of monthly direct navigation visits of 300 is approximately half of the expected click thrus on Google and Yahoo per month.

Taking a 25% discount off of the $10 PPC price would result in a $7 per visit price.

$7 x 300 per month = $2,100.00

Is $2,100 per month a reasonable lease price?

What would be a reasonable expectation for an advertiser to pay for THEIR SITE to come up exclusively on my domain (exclusive redirect to the advertiser website) in lieu of a list of 10 other PPC listings when a direct navigation visit occurs.

A direct navigation visit to a leasee's website ELIMINATES a step as the direct navigation results in a DIRECT visit to the advertisers website. Secondly...an advertiser would be wise to leverage the leased exact match generic keyword domain within their own marketing efforts.

As a side note regarding advertiser ROI.

This particular product/service averages a $5,000 to $7,000 price tag. If the advertiser gets 3,500 direct navigation visits per year and converts 1% (very reasonable expectation) that would result in 35 sales per year. That would result in approximately $200,000 in revenue.

Expected Revenues = $200,000
Leased Domain = ($25,200)
Net = $174,800

A pretty good return.

Why aren't more companies turning to Domain Leasing? A highly descriptive generic keyword product domain is the equivalent to opening dozens of satellite sales offices throughout the world. People are driving right up to the door of your office looking for exactly what you are selling.

Please comment.

***FS*** Companies don't like the fate of their campaign resting in the domain owners hands and domain owners don't like the complications.. It's too much work to lease onesey twosey, stay on top of accounts, etc.

software domains

"***FS*** Companies don't like the fate of their campaign resting in the domain owners hands and domain owners don't like the complications."

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The fate of the advertisers campaign would be SUPPLEMENTED by leasing of domain names. If I am a second tier software vendor looking for more exposure to SUPPLEMENT my current campaign on Google and Yahoo PPC - why not lease the domain name? If a software vendor realized the ability to leverage the descriptive generic domain name to drive traffic DIRECTLY to their respective landing page - why not?

"***FS***It's too much work to lease onesey twosey, stay on top of accounts, etc."

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Frank, with all due respect...which is much...I believe you are looking at this from the perspective of someone with a HUGE NUMBER of domains. I believe somebody with a collection of 50 to 100 domains could easily handle this type of setup directly with advertisers. Also...in my case...I have a collection of vertical sets of domains that all could be leased by one company.

Thanks for your responses. I would really like to get more input from you looking at it from the perspective of small operators like myself with less than 250 to 500 domains. I believe there are quite a few of us smallish operators out here who would be interested in your views.

Software Domains

Frank...here is an example of what I am talking about. Marchex obviously leased this domain to CSN Stores.

http://www.coffeetables.com/

CSN looked at the domain and said why not have all those visitors who go to coffeetables.com by direct navigation go STRAIGHT to our website versus a PPC landing page with 10 other vendors competing for a visit.

An analogy would be a company who has 9 other competitors in town competing for attention putting their own sign up on the front door of the other competitors buildings that reads..."out of business"...

The company that LEASES the Domain STEALS the traffic from the other 9 competitors that would otherwise show up on a PPC landing page.

CSN stores obviously approached Marchex and said...How much to have EXCLUSIVE rights to that domain? Marchex did a calculation and said...If we historically make $20,000 per year from coffeetables.com thru PPC and CSN Stores is offering us a GURANTEED $40,000 lump sum payment for a period of one year in return for EXCLUSIVE TRAFFIC from coffeetables.com ...WE SHOULD TAKE IT!

CSN realizes that the estimated 75,000 annual direct navigation visits to coffeetables.com is worth $.50 per visit.

AND IT SHUTS OUT THE COMPETITION 75,000 times per year!

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