Good morning everyone!
Thought I’d get my Saturday off to a good start with some blogging – so, here are the top five reasons business buy domain names on the secondary market.
1. Traffic
Traffic is pure money for businesses, and direct navigation traffic (where users type the keyword plus extension directly into the browser, rather than use a search engine) is the “best kind of traffic” according to The New York Times. That’s why brands like The Times invest in news.co.uk, and Bank of America owns Loans.com – by directing these direct navigation domains to their homepage, they’re capturing the 25% of traffic that they would miss by relying solely on search engine users. This type of traffic delivers customers that are early in the purchase consideration funnel straight to the heart of a business – a sure reason for Interflora to have invested in bouquets.co.uk and Sedo to have bought domain.co.uk!
2. Building a Vertical – Protecting your space
Johnson & Johson’s investment in baby.com has very likely paid off many times over – by using the domain to build out a vertical portal, they position their brands as “musts” by developing the site as an educational/informative first-choice destination for lucrative target consumers; in this case, new parents. Owning the product category defining term “baby” as a premium .com address adds credence to J&J’s offering and wins them consumer trust, branding benefits and all-important traffic.
They chose to go one step beyond protecting just their brand online – J&J have also safeguarded the competitive space in which they operate. By snapping up their niche-capturing term, they have also successfully created a barrier to entry in the notoriously competitive online retail sector of their business – a move copied by Russian Standard Vodka in 2006, when they bought vodka.com at Sedo to allow them to compete effectively online with market stalwarts Absolute, Grey Goose and Smirnoff. Cheers!
3. Search Engine Success
Most business spend a small fortune trying to climb up the Google listings – they entrust their ad budgets to SEO agencies, online admen and creative ad writers to battle it out for the top spots at search engines. With every click, however, their advertising budget depletes and ROI is hard to measure. By diversifying their online strategies to include direct navigation domains AS WELL AS search engine marketing, busineses can profit in several ways.
Domains containing the search engine keywords far outperform the non-termed choice, domain traffic statistics are transparent, reliable and measurable, keyword domains are automatically ranked higher than branded domains by search engines’ algorhythms and consumers tend to search more for product category terms than for branded terms (e.g. domain parking, rather than “sedo” or “domainsponsor”). In addition, domains are appreciating, long term assets, which you can sell on/redirect at the close of a campaign. For example, the owner of webhosting.com spent $350,000 on the domain in 2005 – he tracked his results and confirmed ROI on his initial investment in only 24 months. Buying the keyword domain for his product allowed him to slash his SEM costs, he appeared in both natural AND paid listings and new customers clicked his ad above others as the premium domain name inspired buyer confidence. Other examples of this include Toys R Us’ acquisition of toys.com for over $5 million! That should have them scaling the search engine results!
4. Branding
Many businesses choose to take the idea of a product-category defining domain name (see point 2) a step further and rebrand completely onto that name. For example, Ice.com rebranded onto Diamonds.com and Epinions rebranded to Shopping.com.
B&Q’s web presence is defined by its online address diy.com, while in the US, Barnes & Noble sought to take on the might of Amazon’s supply chain by using their domain, books.com as part of their branding.
5. ROI on Campaigns
Now more than ever, businesses are focussed on cost cutting, ROI and extracting maximum value. Over the course of its “lifetime”, a domain offers all three – a way to cut costs on search engine marketing while still maintaining visibility, ROI through traffic, return visitors and increased sales and maximum value through its multiple applications.
For example, when Pizza Hut launched its Pasta Hut campaign as part of a menu relaunch, they bought pastahut.co.uk for £4500. This domain allowed them to convert their very expensive TV advertising to paying customers – over 60% of us browse online while using other media, so using a short, snappy domain that is easy to remember and to type is imperative. They used the domain to run a specific, stand-alone campaign, thus enabling them to track conversions on a far more granular level with per-domain stats than if they used a subsite of their main address. Finally, on successful completion of the campaign, the traffic the domain continued to receive (back links, ping backs and residual type-in traffic) was not wasted but redirected to the homepage, where it continued to provide added value, long after the new pasta menu became old news. Now, that’s what I call extracting maximum value!
Filed under: domain names | Tagged: Sedo, Nora Nanayakkara, domain names, buy domains, domain parking, online advertising, sell domains, domain sales, Domainsponsor, endusers, digital media, adspend, SEO, search engine marketing, Google, Vodka.com, premium domains, domain auctions, direct navigation, traffic, New York Times, The Times, Bank of America, Interflora, Barnes and Noble, Amazon
