[']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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2BR Apartment In SoHo[[that-real-place-in-NYC]] for $100k? What a Ripoff! @TropicalSEO

http://tropicalseo.com/2007/2br-apartment-in-soho-for-100k-what-a-ripoff/#comments

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2BR Apartment In SoHo for $100k? What a Ripoff!
June 21st, 2007 Domaining

I find these sorts of posts to be mind-boggling. I think we’re in an odd time where premium domain names have shot up in value so much in such a short period of time, that even some domainers are saying “Can they possibly go any higher?”

Scotland.com $1,000,000 - Nope, Wow, nice name. But I have a gut feeling, crickets will chirp. I think it is worth it but this is the wrong place to auction it off.
Seniors.com $1,000,000 - Nope, Do old people use computers? I think this one is too high.
ComicBooks.com $500,000 - Nope, Where is Marvel? Someone should broker this sale.

Premium, 1st-tier vertical domains are like Manhattan real estate.
They aren’t going to lose value year-over-year.
God ain’t making Manhattan any bigger and He sure ain’t making a second Scotland.com.
In 2009 these prices will seem laughably cheap, just like NYC real estate prices in the ’80s now seem.
Considering domainers as of yet haven’t grokked the synergy between SEO and keyword.com, it’s not surprising that much of the perceived value remains hidden.
Now who wants to give me 12M in funding to start a hedge fund?

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6 comments ↓

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#2 admin on 06.21.07 at 8:51 pm
> Is the SEO benefit that great, compared to buying a brandable and doing $999,994 on SEO/promotion?
If you have a $3M total budget
— hells yes, I would rather have Scotland.com + 2M to spend
— then[[than]] ScotlandWebGuide.com + 3M to spend.
It’s not just the typein.
It’s not just the “direct” keyword synergy.
Also
the links you get for seeming more legitimate,
the branding benefits,
the increased likelihood of offline citations.
If you have little startup capital, the costs of domains seem ridiculous.
If you’re well-financed and going for a major play,
they seem pretty cheap.

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[[[[[[[[[ 'the edittor notes : :::::
My Dear Sir TropicalSeo does always b[be] prepared2say the sweet things 4[for] domainers ,
e.g. ,
http://tropicalseo.com/2007/top-4-lies-domainers-tell-themselves/
http://tropicalseo.com/2007/why-demand-media-and-web-20-domain-parking-will-fail/
http://tropicalseo.com/category/domaining/
]]]]]]]]]

B-Factor and Domain

[[[[[[[[[ 'the edittor explains as the spelling correcting dictionnary : :::::
i think
my dear Sir Frank Schilling may have misspelled ,
"je nai se quoi" seems2make n'o[no] sense , as witnessable @ google , may b[be] : :
"je ne sais quoi" that right spelling ,
http://www.thefreedictionary.com/je+ne+sais+quoi
]]]]]]]]]

B-Factor "je nai se quoi" and Domain Names
http://frankschilling.typepad.com/my_weblog/2007/05/bfactor_je_nai_.html
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May 06, 2007
B-Factor "je nai se quoi" and Domain Names

http://www.marketwatch.com/news/story/wsj-worth-more-future-profits/story.aspx?guid=%7BD4BA89F9-B9CA-4526-9AA0-B0783323715B%7D
Quote:
"Rupert would even acknowledge that some part of his interest in the WSJ goes beyond economics,"... The value of companies should in theory be equal to the total worth of their future cash flows, Buffett explained. But some businesses, such as sports clubs, movie studios and important national newspapers, have an extra value Buffett called the "B factor." .. The B factor at Dow Jones is huge, probably second only to the New York Times in the whole world," Buffett said.

Ughh .. The New York Times? Come on Mr. B. .. maybe in 1978 when the BeeGee's sang about it in Saturday Night Fever. We can all understand the tenor of what Mr. Buffet is speaking to of course. There is a power, influence, branding and cachet value that transcends the cash-flows the business can bring.
Domain names are the clasic "B Factor" investment of course. Why else pay 140X for a name like snoringcure.com ($8,000+ at Snapnames.com today). It will be a frosty day in Hell when PPC revenues pay for that one, but I now own a great snoring name! I can sell products relating to the malady .. some of them may cure my snoring (much to my wife's relief). It is generic, descriptive,
easy to buy traffic for,
easy to arbitrage - I could probably live off that one name! Man you gotta love domains. NYT example notwithstanding.. Buffet is right.

Posted at 08:55 PM in Domain Names (Domains) Permalink

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Comments

Frank - I thought your business revolved around ppc as opposed to developing or selling domains?
If so, you are not likely to develop snoringcure.com to make a profit on your $8000.Or have I misunderstood?

***FS*** Everything is in development.. it's just happy coincidence that the best names to develop also bring a trickle of PPC revenues. In this case, the intrinsic value of a name as a brandable site, as a tool for buying traffic from search engines far and away eclipses what I can make selling PPC right now.

Posted by: JP May 07, 2007 at 12:12 AM

Frank,
Domain name newbie from UK here & a regular reader of your blog.
What volume of typed-in traffic would you expect for that domain name? What's so good about that domain name that prompts you to pay 8K? Why not develop a new snoring related domain name and save the 8K? I presume I'm missing something here!
JC

***FS*** Just a trickle John.. its about the intrinsic value of the name.

Posted by: John Cronin May 07, 2007 at 03:34 PM

$8,000 could really be a fair price if you take the revenue that could come of it in let's say 5 year period. There are probably a billion if not more people with snoring problems. And I'm sure that cures for this aren't too cheap. A huge potential market and expensive products... I don't think it would take 120 years to earn those $8,000 back.English isn't my native language, so excuse me if this sounds stupid... but did you buy this name and what was the point you tried to make in the end?

***FS*** No your English is fine.. multiples are maleable

Posted by: Business Card Guru May 11, 2007 at 03:40 AM

Frank, what are your thoughts about highly-descriptive three-word generic .coms, given that you mentioned lower PPC names often are very developable. Do you own many/any currently?

For Example:
NewWirelessPlan.com
Do you see increasing value in these generics, IYO?

P.S. I was on Grand Cayman recently snorkling Hamburger Reef and thought about you working there. Coffee "on me" next time!

***FS*** I like compound search phrases providing they have a high overture style rank apart.. Reason? If people are searching for the phrase as a part of common vernacular via the engines, then it's possible to harvest those visits from the engines via arbitrage or paid search plays. Also the sitres are more recognizable to the average surfer as a common phrase they are "looking for anyway".. That said.. I also like memorable multi word strings if they are catchy and have resonance: seewhathappens.com <-- recent superbowl commercial.

Posted by: Dean Phillips May 14, 2007 at 04:44 PM

Same outlook for longer famous phrases?
> reportsofmydeath.com

Posted by: Robert June 15, 2007 at 12:11 AM

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[[[[[[[[[ 'the edittor notes : :::::
i classified this post under the label `` easy2 buy traffic for '' ,
----------------------------------------------------------
because : :
----------------------------------------------------------
an ad in tv e.t.c. =
too dear +
too short ,
[[
a 30seconds spot in tv can cost u upto
USD 2-2.5 mm in the time of SuperBowl e.t.c. ,
----not----including---- any cost of ad-production e.t.c. ,
which can cost u an other cluster[s] of USD millions
]]
so
ynot[whynot] have ur dn b[be] rememberred4ever
@ 1st Glance of your ad
????
acquiring a good domain does it ,
then ye dont need2do so many ads again-n-again
then ye dont need2do so many ads again-n-again
----------------------------------------------------------
many visittors start w/ recalling your dn in order to [re]visit your site
especially//expecially
@ cyber-pubs or
@ public libraries e.t.c. ,
----------------------------------------------------------
there4 , if your domain isnt good enough ,
then
u need2spend million$$ 2[to] repeat your ad in tv e.t.c.
but ,
W/out Any guar. of good conversion,
+
W/out Any guar. of 4ever-result,
[[[[[[[[[
in case o'[of]
u cancelling only 1 ad in tv e.t.c.
with a best domain ,
then ,
u can so forth-right-away save
million$$ , o.k. ,
millions of Yen at least
]]]]]]]]] ,
[[[[[[[[[
indeed
indeep ,
just too many many expensive ads result in nothing lasting ,
just too many to list here + in order to avoid embarassment ,
there4 .....
]]]]]]]]]
there4 ,
a best domain saves million$$ marketting fees of ad in tv e.t.c.
+
sometimes even saving million$$ yearly4ever ,
----------------------------------------------------------
Good-Domain is
Good-Start ,
Good-Start-Is-Half-Succe$$
Good-Start-Is-Half-Succe$$
[[ the above-saying 's the longtime's proverb , not invented by us
]]
----------------------------------------------------------
hey man ,
that isnt any rocket science ,
that is only the kid's level's common sense , ye cant comprehend
??
----------------------------------------------------------
please b[be] reminded -
a job well begun is a job well done.
a job well begun is a job well done.
]]]]]]]]]