In his Feb 28th Article “Evaluating Search Syndication Partners” Andrew Beckman, president of the SearchAdNetwork, shares some interesting research from an advertising campaign in the education vertical:

With our internal tracking system, we selected the education vertical to analyze where traffic originates from, and noticed that directional navigation is 5 percent of the overall syndication of the major search engines.

[...]

Our tracking system shows, from the same education vertical, that search toolbars deliver 3 percent of the major search networks’ traffic with acceptable conversion percentages from those efforts.

[via DMNews]

The Canadian magazine Macleans follows the footsteps of the Business 2.0 article “Masters of their domain” with a similar title and content: “Masters of our domain (names), the cash cows of the Internet” .

The Canadian edition features Yun Ye, Dan Cera of Domaintrader, Buydomains, John Berryhill and some bad examples for parked domains.

There are different ways to earn money of a domain, starting from ‘parking’ the domain with a PPC service to an actual developed site. This is an attempt to show different examples for development and to break down which levels of development may exist. Of course there are in-between levels for all of these – I am looking forward to hearing from you (via email or in the comments), which model works best for you. While the list is sorted by the amount of effort (less to more) that is required to maintain and build a site, this may of course vary on a individual basis.

(more…)

As reported earlier the domainers and investment communities met in Santa Clara at the Targeted Traffic conference. For those of us who were not able to attend, Ron Jackson of DN Journal has got the story for us:
Domain Business Moves Into the Fast Lane After T.R.A.F.F.I.C. Stop in Silicon Valley

Some quick facts from the article:

• Jan 30th to Feb 2nd
• 325 attendees
• reception at Google
• Dan Warner of Fabulous shared amazing statistics (as always)
• selling and buying portfolios was one of the major topics
• domains as an investment strategy
• Sedo is buying main stream business print advertising in order to increase awareness of the market
• Lou Doctor of Arbor Advisors cautioned against holding on to the names for too long and against just PPC-parking your names
• a panel on domain development took place

And those were just some points for the first day. For more information, read the full DN Journal report.

BuyDomains (http://www.buydomains.com), a division of YesDirect, Inc., today [Jan 23rd] announced the acquisition of 32,000 “.com” domain names, increasing the company’s industry leading portfolio size to greater than 600,000 high performance domain names.

The acquired one and two word domains are concentrated in the lucrative advertising verticals of finance, travel, education, and recruitment. Additionally, the 32,000 domain addition consists exclusively of coveted one and two word “.com” domains.

Original release

At the end of last year, YesDirect had also announced a new partnership with GoDaddy‘s TDNAM. They already had similar agreements with Sedo and Afternic in place.

The Targeted Traffic Conference and Expo in Santa Clara begins today with a tour of the Google Headquarters and a cocktail party hosted by Google. Unfortunately I will not be able to attend the event.

According to a report at Excite Money & Investing (based on a study by WebSideStory) a conversion to a sale is more likely when the user comes to a site from a search. It seems that the study differentiates between searches (including targeted PPC), banner ads, shopping search sites and direct navigation/type-in.
Search Sites Better At Getting Shoppers To Buy: Study

• Direct Navigation/Bookmarks 4.23%
• Search Engines (incl. PPC) 2.30%
• Banner Ads/Content related ads (Other) 0.96%

The study, by researchers at WebSideStory Inc. (WSSI), found that search sites produce more than twice the conversion rate of many other Internet marketing efforts. The study defines conversion rate as the percentage of visitors to a site who view an ad or clicking on a search result and purchase a product or service. [...]

According to the research, search sites had a conversion rate of 2.3%, meaning that for every 100 consumers clicking on a search result or advertisement, 2.3 people made a purchase. Online banner ads, shopping search sites and other online marketing efforts had a conversion rate of 0.96%, the study found. [...]

Consumers who went directly to a company’ site without using a search engine – perhaps because they set a bookmark – had a much higher conversion rate of 4.23% .

I’d love to see a more detailed breakdown showing the difference in the conversion ration between “search” by direct navigation and search engine. I am quite surprised that shopping/price search engines (is this the same?) are not doing that well. It also looks like they placed banner ads and content related ads in one category. It is not surprising that direct navigation ranks the highest in the conversion charts – after all the user most likely wanted to visit this merchant’s site for a reason.

[Thanks Wayne]

Danny Sullivan wrote up a summary on the current ‘ads on parked domains’ discussions, which were started off by ‘research’ (MS Research: Typo-Squatters Are Gaming Google) published by Microsoft (I am still wondering if this means that they are not going to try to get into this market with their Adcenter offering.).

I was planning on a summary, but his article give me a good starting point – while I don’t necessarily share his opinion:

Search Engines Making Millions Off Type-In Traffic From Domains

It’s not that domain traffic is necessarily bad nor that domainers are necessarily doing anything wrong. But there’s a difference between the person who did a keyword search as opposed to someone who did a navigational guess (a type in) versus someone who sees ads placed contextually on pages. Advertisers deserve the transparency of doing these as separate buys.

For a while I thought about this the same way, but is there really a difference? A lot of users seem to use domain names as a replacement for search queries. A generic domain that is typed in by the user would probably be the most likely to convert. Someone else follows a link that points to a domain that has been grabbed in a domain drop, will it convert? If they type a domain name of a brand wrong, they might end up on a PPC page. Will they find the brand name they were looking for in an ad on that page?

It would be great if someone (maybe one of the aggregators?) could provide data that shows that domains do work well for the advertiser. I am convinced that there are numerous examples out there. I would just love to see some research – it could teach us a lot. Maybe it even makes sense to split the traffic, based on it’s origin. And of course we also need to make improvements on the other end, after the click on the ad. Bad conversion rates can also be related to a bad and non-targeted landing page.

For the advertisers this is really about the quality of traffic, or even more specific, the likelihood of conversion. Which mindset is the end user in? Which part of the sales cycle is he in? There are many more questions that need to be answered so we can ensure that all the parties are treated fairly in the process. How and where should conversions be tracked, and how much higher would the payout be for a click that converts? What if the conversion takes place 6 months after the click?

Even if a space is very non-public up to a certain point, it’s always a good idea to try to steer how and where this topic will appear publicly, especially if you have a suspicion that there is a strong chance for a negative twist. Now it’s now important to control the damage, which can be a long and painful process.

Some more posts/discussions about this topic:

http://www.searchenginejournal.com/index.php?p=2694
http://www.circleid.com/posts/whats_wrong_with_domain_names/

In the end, I believe that the short term outcome might be that advertisers will be able to pick between content syndication, search and domain advertising. This will have a negative effect for a lot of domainers, at least in the short term. Long term it might lead to a tiered structure where the payout depends on different factors (a combination of of pay per unique, lead, action, click etc).

Types of Domain Traffic (Search Engine, Direct Navigation, Expired Links)

This is an attempt to summarize the different origins of ‘natural’ domain traffic on the Internet. I am concentrating on ‘natural’ traffic here, so I am not including PPC ads or similar means to generate traffic. I came across three measurable main types of traffic that can be generated by a domain, but I think that there will be more categories added as tracking improves – please feel free to comment, I’d love to hear from you.

1. Search Engine Traffic

This is traffic that originally is generated by means of a search term on a search engine. The user is then referred to the target site from the search results.

You can identify this type of traffic by taking a closer look at who refers your users to your website. In the logfiles you will also be able to identify the queries which lead the user to your site. Often this can be used in order to optimize your site so your users find the information they are looking for as quickly as possible.

In order to improve this type of traffic, one often needs to builds an ‘authority site’ on the topic that goes along with the domain name. This can be done by either blogging, re-posting excerpts from other sites (possibly in conjunction with comments etc.). Another possible source for content are free article websites. To improve this type of traffic, SEO (search engine optimization) strategies can be employed.

2. Direct Navigation or Type-In traffic

The user types the name directly into the address bar of the browser, accesses it from a bookmark or has it set as the browser’s homepage. Many users use domain names as a search term (I know that this is something people often don’t believe, but the right name will generate a significant amount of qualified type-in traffic). So a user actually looking for used cars in Toronto, would directly type “torontousedcars.com” into his browser’s navigation bar. Those users often do not distinguish between a search and entering a domain name.

It would be very interesting to differentiate between bookmarked/homepage and actual typed in traffic, but this is difficult to track without using cookies. For example you would be able to see if an Internet Explorer user bookmarks your site (the web browser will access the ‘favicon.ico’ at this time), set a cookie and identify further visits from the same user by querying the cookie.

Another possible origin for this type of traffic includes Instant Messaging and mail, which could form an additional “Word of Mouth” Category. As Brian (my co-worker) pointed out a couple of days ago, this traffic could also originate from print, TV, flyers and other forms of advertising (I see the URL, I remember it or write it down and type it in at a later time). Currently the only way to track this type of traffic separately would be to use a unique URL/domain for every publication.

3. Typo Traffic

This category monetizes miss-spellings of popular high-traffic domains. If investing into this type of domains, one should be very careful to avoid trademark conflicts etc.

4. Linked Traffic (expired/non-expired)

Domainers will pick up domains that have previously been used for an active website. Often these sites experience residue web-traffic that originates from previous links to the site and also from search engine listings. When the original registrant fails to renew their domain name, the new owner buys these names at the dropped names services. Good names will mostly be sold in an auction.

You will be able to identify this type of traffic by checking the referrer URL in your log files. If a site with this type of traffic just serves PPC ads and no content, you will often see the traffic drop off after a couple of months (as search engines might drop them from their index). If this type of site is developed, it might be able to maintain the benefit from the previously existent site.

In the names@work blog, Antony comments on the business 2.0 article and also references a UCLA study: Names@Work » Blog Archive » 15% of all web traffic.

He poses the following questions:

1. How to distinguish between bookmarks and “type-ins”?
2. How many people type in a domain name into the search engine search box? I suspect many people don’t understand the difference between the URL box and the search engine box. Traffic counted as search engine traffic might in fact be domain name traffic typed into the wrong box….

1) This is going to be very challenging technically. In IE you can track when someone bookmarks you, because IE requests the little favicon at that point. If you can connect this action to future access from the same user (cookies?) you might be able to differentiate between the two. Mind, this would not work for Firefox, because Firefox always tried to load this Icon.

2) Many people – including my mother in law If you are the one operating the site, you will see it in the referrer URL coming from the search engine. You can also see this in the Overture Tool:
http://inventory.overture.com/d/searchinventory/suggestion/?term=google.com

8941053 searches for “google.com” in the month of October across the Overture network.

I have always been saying it’s about time someone does a user survey and publishes the results. Or at least maybe some of the aggregators can share some statistics. I for one would be reluctant to give all my traffic (and the corresponding data) to an aggregator if I had other choices (meaning enough traffic to get access to an XML ad feed).