[']The House Always Wins - SEM Arbitrage and Keyword['s] Domain Names

http://frankschilling.typepad.com/my_weblog/2007/03/the_house_alway.html
[[[[[[[[[ 'the edittor notes : :::::
My Dear Sir Frank Schilling 's the legendary individual domainer ,
not just largest ,
he donated USD 50,000 to IAC ,
'the Internet Commerce Association ,
'the Association working for all domainers
http://frankschilling.com/
]]]]]]]]]]]]]]]]]]

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March 23, 2007
The House Always Wins - SEM Arbitrage and Keyword Domain Names

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Funny thing is,
a lot of poignant, generic .com names don't get very much
organic type-in-traffic each
(considering how meaningful they are).
Take a name like CrossStitchPatterns.com.
That name has enormous resonance.
While you and I may not be logging on anytime soon to seek out
Cross Stitch Patterns;
in the Month of February,
[[[[[[[[[2007]]]]]]]]]
9010 people searched for that phrase across Yahoo's network.
That's
more than 300 people a day seeking out that search phrase
at assorted third party search-pages powered by Yahoo
(and at Yahoo.com itself).
Compare that to the
4 unique type-in visits a day this name generated on its own.
Don't cry the blues for the name's owner.
4 consistent type-in visits each day on a generic name
like that is actually quite good.
These visits come for free, without referrer
-- based purely on type-in to the address bar
as a result of this name's meaning and resonance.
You can not get less visits to this name as none come via the search engine,
the only way is up.
So I searched "Cross Stitch Patterns" at the leading search engine
and noticed the paid search advertising on the right side.
These are advertisers
who want to buy traffic under the matching cross stitch key-phrase.
As I reviewed the URLs of the advertisers,
none of them contained "Cross Stitch Patterns" ..
we have michellesneedlecrafts, adventures-in-stitching but no exact match for the search string.
What do you suppose would happen
if I advertised my URL under the key-phrase that matches the name?
Well,
I tried it and
I found that because
my URL matched the key-phrase people were searching for,
I had to bid less for traffic.
People were more apt to click on a link
when it matched the URL..
and the power of .com just reaffirmed to Jane Public
that she had found the market leader.
The same psychology that
makes a great domain name get organic type-in visits,
helps the advertised URL to get the attention of the shopper in a search marketing setting.
It is difficult to change human behavior.

I went through this little dog and pony show to illustrate my belief
that
in a few years time
theworlds largest SEM, traffic arbitrageurs will be those
who own large portfolios of typein traffic domain names
with high Overture counts
(keyword apart).
Why?
Because
if
you get four organic visits across hundreds of thousands of domain names,
you will be in a far better position
than
a naked arbitrageur to take-on a few thousand arbitrage plays
paying
35cents at Google and selling to another market/advertiser for as low as
35.5 cents ..
The naked arbitrageur without the type in traffic domain portfolio has
no cash-flow driver to prime the pump and compete at lower margin levels.
It would drive them out.
Couple that lack of organic cash-flow with the fact that
the keyword-weight of high search-volume domain names will
always
help their owner to draw more clicks in an arbitrage setting
(and ultimately pay less for traffic
because
search algo's reward
sites drawing more clicks)
and you can see why I say; the house always wins.
Buy generic keyword domain names with type in traffic
(and high "apart" search counts,
cuz that's where the searches/people are)
and you 'become the house'.

Posted at 05:41 PM in Paid Search Permalink

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Comments

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i'd rather have the .com's of course for the obvious reasons,
but i got in the game a bit late.
there's another reason to own exact match names
apart from arbitrage
- the same advantage they enjoy in adsense
will boost their performance in the organic search rankings
(more clicks for the same search ranking for anyone
doing development)

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***FS***
Ha ha .. glad to make you feel better about names without traffic.
I will say though..
If you have the correct order
"free psychic readings" as opposed to
"psychic readings free"
you will clearly do better..
the url has to match the user intent
as they typed the string.
That goes back to the human behavior part.
This goes for singulars and plurals too IMO.
Interesting color on the .org names.
I think
in a
com/org head to head arbitrage battle
com would win.
Org folks wouldn't convert as well
because they are looking for "freebie info."
I want people with wallets open.. so do advertisers
But still orgs may work better for religion/charity categories.

Posted by: Eric Shannon March 23, 2007 at 09:19 AM

> the power of .com just reaffirmed to Jane Public that she had found the market leader.

That's the ingredient
that's still missing in the mindset of most companies doing business online.
You can have the slickest office or showroom, with the plushest furniture,
but none of that is visible online...
[[[[[[[[[ 'the edittor notes : :::::
your generic domain's your net slickest office or showroom
4u2[for-you-to] _____show-off _____
but ,
its[it's] 100.000% visible online
]]]]]]]]]]]]]]]]]]
... on the other hand,
the first thing that a site visitor is likely to see is your site's URL.
[[[[[[[[[ 'the edittor notes : :::::
its[it's] a kind o'[of] first impression ,
please take care o' t' first impression of yourselves ,
there's n'o[no] second [chance-o'-that-same] first-impression
]]]]]]]]]]]]]]]]]]
So in a field where 50 companies offer basically the same service,
owning the exact generic domain corresponding to that service
is like setting up business
at the heart
of the most prosperous district
of a real-world city.
C-R-E-D-I-B-I-L-I-T-Y.
It's a lovely word!
You can (perhaps, for a time) buy it
with millions in advertising dollars and huge extravagant campaigns, or
[[[[[[[[[ 'the edittor notes : :::::
all your $$$$ spent in advertising in tv e.t.c. ,
once-given-out , 'r all gone ,
with-out long lasting effect ,
n'o matter howexxxxtravagant those campaignes 'r
but ,
in contrast ,
each domain's 4[for] 99.999.999.999 years + over more,
indeed
indeep ,
each domain's 4[for] ever4ever
]]]]]]]]]]]]]]]]]]
you can outflank all your competitors, big or small,
by grabbing the mindshare of your visitors
even before they set a virtual foot on your site
by securing that perfect URL.
Once companies start to realise this en masse
as opposed to the current dawning realisation of a few earlyish adopters
this already crazy market is going to head for the skies.

***FS***
You get this.

Posted by: Edwin Hayward March 23, 2007 at 10:05 AM

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