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ECommerceTimes.com

Don't Buy the Keyword - Buy the Domain

By Matt Bentley
May 8, 2007 4:00 AM PT

Marketers assume that Googling for information is an automatic response the instant a Web surfer opens a browser. For many Internet users, the theory is true. However, for a number of reasons, and with increasing regularity, many people bypass search engines altogether in favor of a technique called direct navigation. Simply put, direct navigation is when a user directly types a Web address into a browser.

Don't Buy the Keyword - Buy the Domain

However, the phenomenon of direct navigation to generically named sites with an "intent to search" is a relatively new concept that shifts how marketers must think about their own Web site traffic and how consumers are finding information about the things that interest them.

Marketers are turning to direct navigation programs to complement their search campaigns for a number of reasons, including the emergence of programs like AdSense and other technologies that can populate unused Web domains with information to create mini-portals.

Consumer Trends

Online consumers are turning to these "parked" Web sites -- pages populated mostly by relevant keyword ads -- because they can sometimes produce better, quicker results that avoid the manipulated listings that increasingly clog search engine results for highly commercial keyword terms.

In fact, it is estimated by several organizations that traffic to "parked" pages drives about 10 percent of the pay-per-click (PPC) ad market. Even more interesting, WebSideStory found that direct navigation had a 4.23 percent conversion-to-sale rate, while search engine clicks on average lead to a 2.3 percent conversion-to-sales rate.

Marketers can use generic targeted domain names as a traffic source in three primary ways:

  1. Simply redirect the domain to your main site. Russian Standard, a Russian vodka maker entering the U.S. market, recently paid US$3 million for the generic vodka.com domain. The company currently uses it to redirect users to its home page. Other examples include Books.com (Barnes & Noble), PC.com (Intel), Loans.com (Bank of America) and RentalCar.com (Enterprise). Some more good ones if you'd like to update these are School.com and OfficeSupplies.com (both Office Depot); Gift.com (JCPenney); Investor.com (MSN Money); and StudentLoan.com (Citibank).
  2. Use the domain as a targeted vertical portal to drive traffic to your main site. This method requires more effort, but is more likely to lead to increasing traffic over time, generate higher conversion rates, and strengthen your position as a leader in a given market category. Here are some examples: Baby.com (Johnson & Johnson), ResetlessLegs.com (GlaxoSmithKline), DepressionHurts.com (Eli Lilly & Co.), DesignatedDriver.com (Budweiser), NoFleas.com (Bayer), Meals.com (Nestle) and Malts.com (Diageo).
  3. Rebrand your entire operation on the new generic domain. Obviously this is the most extreme example, but there are many advantages to branding your company on a premium generic domain: You instantly gain credibility as a leader in your space, and generally garner higher conversion-to-sale ratios with less expenditure on marketing and brand-building. Some examples: DealTime and Epinions become Shopping.com; Ice.com becomes Diamond.com; DynamicWeb becomes WebHosting.com. (Entrepreneur Jesse Rasch describes how acquiring WebHosting.com dramatically grew its revenue and customer base here.)

Much like a well-rounded SEM (search engine marketing) keyword campaign, the best domain strategies involve multiple, category defining names. Purchasing several domains ensures that customers who use different terms don't slip through the cracks and creates an understanding that your company is the leader in a particular space. Choosing multiple domain names in a specific category allows you to deliver a personalized Web experience with related content spread across a network of sites. Another major advantage of this is that you can interlink between domains, which will greatly boost Web search engine rankings.

Finding the Right Domains

There are a number of things to consider when determining which domain names to acquire in your direct navigation initiatives. Much of it gets back to marketing basics -- who is your audience and how can you reach them?

  • Taken from a customer perspective, what are they looking for that you have to offer? Don't just think of which "category" you position yourself in, but how do your customers describe you/your product? Acquiring the dot-com version of your most productive SEM keyword terms is usually a good place to start.
  • Keep it simple. One-word domains or very short phrases offer the greatest value and highest traffic.
  • Choose the right extension. Generally, .com domains are the best choice, as they receive a magnitude more type-in traffic than other extensions. However, if you're interested in traffic from a particularly country, you may be better off acquiring the country-code version of the domain name -- for example, .co.uk for traffic from the United Kingdom.
  • Keep it generic. Registering a variation of your competitor's site or products rather than generic descriptive terms could put you in conflict with trademark law.
  • Research traffic volume before buying. Some domain sellers or domain marketplaces will provide guidance as to how many visitors the domain currently receives. Otherwise, a handy rule of thumb is that direct navigation traffic volume is generally correlated to search query volume for that keyword, which you can research using Yahoo's Keyword Selector Tool.

Once you identify the domains you'd like, there are a variety of ways to acquire them. If you're lucky and the domains are still available, you just need to choose a domain registrar and pay an annual registration fee of around $10 to $35. If the domains are already taken -- and most good traffic domains are -- you still have options: You can try researching the domain owner and making an unsolicited offer, or browse the listings at a domain name marketplace where you'll find thousands of high traffic domain names that are definitely for sale. If all of that sounds like a bit too much work, you can always hire a domain broker to do all of the legwork, including tracking down owners, negotiating a price and assisting with the ownership transfer.

A Marketing Investment

As a marketer, investing in direct navigation generally pays for itself within a year or two, dependent of course on the quality of the domain and how well you can convert the traffic into sales. However, instead of being an expense as with purchasing clicks from a search engine, acquiring a domain (or portfolio of domains) for direct navigation purposes becomes an asset that retains its value (possibly even increasing in value) and can even be resold again in the future should your marketing objectives change. Domain name prices have risen dramatically over the past years as the supply of quality available names becomes ever smaller, and with more and more businesses coming online every day, that picture is unlikely to change anytime soon.

Only a few very savvy firms have already discovered that in this click-hungry era where many companies blow tens of thousands of dollars each month on PPC advertising, that purchasing targeted generic domain names delivers the same type of high quality targeted visitors at a much, much lower cost.


Matt Bentley is chief strategy officer for Sedo, a domain name marketplace.


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