Successclick, Domain Monetization

If It’s Not A War, Then It’s Surrender

Let me ask a question for reality:
What are we domainers who aren’t Kevin Ham, Frank Schilling, Slavik, Sahar, Rick, or any of the big consolidated domain companies doing to make our domain investments pay off?

What if you don’t have 10,000 typo or TM domains that you’re hedging for a few months sucking in tens of thousands of PPC revenue before you get sued? What if you don’t have a popular one word domain that describes what everyone on the net is looking for? What if you don’t have the cash to build out decent two-word domains clearly defining a product/service? Renewing 2000 domains a year at almost $15,000 out of your budget each year? Selling several of the domains for a few hundred or a few thousand dollars to cover the cost? Are you breaking even with any of your domains in PPC revenue?

Is the domain industry starting to look like the MLM industry in the early 90’s?

Really. What are we doing? Listening to all the biggy blogs, going to conferences, buying into the domain auctions, trying to find a magical domain that will somehow catapult all the hours and effort and CASH we expend to make a real living in the domain industry?

What it really all comes down to, if we buy into our own spin, is that it won’t get better for ANY of us unless business owners wake up and start buying the generic domain phrases of their products and services in the aftermarket. How do we get this done? Simply put, we all need to lead the charge to educate the business market, instead of watching the buying/selling of domains become incestuous for the most part in our industry. We domainers are our own biggest supporters and pan-beaters and probably our biggest stumbling block.

Ask yourself just how many domainers are out there that you can convince to buy YOUR domain name at another “live domain auction”, “silent auction” or ongoing domain auction website? I put up a domain “EducationLottery.com,” that consistently makes $350 a year in parking, but is a clear descriptive domain name, and would be quite valuable if built out. It’s a domain that perfectly describes the U.S. Southeast “lottery” system. Look up the term “education lottery” in quotes on Google. Wow – there are over 167,000 results for that phrase. Only 912 Overture searches on that phrase, but almost 15,000 on the phrase “SC Education Lottery”. Seems South Carolina has the market on promoting their sinful lottery system in a “positive way” by calling it the “education lottery.”

So when do we domainers, made up of beginners, novices, mid-range part-time believers and all-out investors who hope their domain purchases reap the benefits, finally see the light at the end of the tunnel? Even more scary, what does that light reveal at the end of the tunnel? What can we domainers do to affect the “other side” of this tunnel we’re crawling through right now? Another big discussion on .mobi domain values?

I’ve made my decision. I’m going to ride it out. I have a belief about the value of domain names. I believe that domains are a better investment value than saving money in your bank or CD’s, mutual funds, and other “safe” investment sources, including real world real estate.

DOMAINS ARE “APPRECIABLE MARKETING ASSETS”. This is my rock-solid term to define what domains are to a company. You buy a category-killer domain for $2mil in 2007, and renew it in 2008 for $8. Hell, register it for ten years at $80. Your investment is $200,000 a year for a decade, about 1/50th of many Fortune 1000 companies’ total marketing budget yearly. Add to that – The domain name APPRECIATES in value every year because it can’t be “beat” by another domain in its category or market.

Then add the fact that with a category-killer domain you eliminate your competitors from ever benefiting from their adwords being placed on a parking page, or them ever owning that “phrase” online, or them ever getting to use the internet to promote that domain name. Everytime your competitors promote their product/service, they’re promoting YOUR DOMAIN NAME.

Then you use that domain in ALL of your promotions, even more than your own BRAND name, offline and online, when you are selling the exact product/service the domain defines. Doesn’t matter if it’s even three words. For example, “HomeVideoSystems.com” is a domain for security services/products that defines itself at the point-of-purchase. Does any domainer deny that paying $1000 for this domain is a good deal for a security firm? Now try and sell that domain to a security firm at that price. You will waste more time trying to get a home security company to understand the concept of owning a keyword domain name than the domain is worth. (incidentally, I paid $825 for it on a Snap drop auction)

All domainers, and the domain industry in general, will eventually collapse in on itself (I’m seeing the structural foundations beginning to erode right now) unless WE ALL WORK TOGETHER TO EDUCATE THE MARKETING COMPANIES, LARGE CORPORATE MARKETING DEPTS AND THE PUBLIC on the BASICS of domain name “exclusivity value”. What keeps all of us hopeful of a payoff someday in our investments in domains will never occur until a bigger portion of the business sector accepts this.

Sure, the easy one-word domains that define popular desires and interests will reign supreme and command huge prices, but those domains represent less than 1% of all clearly descriptive generic domains owned by domainers.

I discussed this with Rick Schwartz in early 2006, and he agreed, and incorporated his strategy to achieve this by trying to bring in Madison Avenue Agencies to his conferences. He failed, but not because TRAFFIC or his efforts weren’t competent, but because ad agencies KNOW they can’t compete with a great domain. An ad agency will NEVER advise their client to buy a domain that will rob the ad agency of their revenue. Do your research. Keep your eyes open. Watch major ad campaigns. See the domains they buy. (I will do another story on this next – A SHOCKER!!)

When J&J bought BABY.COM, it sent shockwaves through the ad agency world in 2005 and comments were made regarding the viability of the “common” ad agency revenue machine with their clients being threatened. A J&J executive had to publicly comment that “Madison Avenue didn’t have to worry” about the move towards “new media” solutions (translation – buying keyword category killer domains such as “baby.com”).

Trust me, most large corporations follow their ad agencies’ advice closely, through the conduit of the corporations marketing departments. But just watch the ads placed by big firms on TV and in magazines and what domains they use to promote their client’s products/services. You will quickly see that the domains they use in their ads are SPECIFICALLY DESIGNED TO THE AD CAMPAIGN ITSELF, NOT THE PRODUCT OR SERVICE being sold by the company. I’ve analyzed it for three years and it’s a no-brainer.

For example, take the domain “TOUGHTRUCKS.COM”. That domain would be the KING of truck sales promotions online for automobile manufacturers. But who owns the domain? “The Promotion Company” located in Indianapolis. It points to “familyevents.com”, a website that broadcasts mudraces and monster truck events. Ho hum, the domain makes probably less than $20k for the website each year in type-ins. It’s a horrible site for the domain. BUT, what if some really smart marketing executive at Ford approached the owners of this domain and said “we’ll pay $2.5 million right now”, would “The Promotion Company” say “sorry, no deal?” No way. They’d be looking at their bank account statements and high-fiving their way to the next mud run race in Mississippi in Class A motorhome stocked with a week’s supply of Budweiser. Hopefully they’d spend at least $50k in re-designing their website.

Ford and Chevy and Dodge and Toyota and all of the truck manufacturers would KILL with the domain “TOUGHTRUCKS.COM” in all their ads and promotions. It would pay for itself within six months of advertising. Each of these companies spend close to a 250 million dollars a year in advertising and marketing. The cost of this domain is a drop in the bucket to them, but for marketing online, it would be a clear winner. Try and think of a better domain to sell trucks. However, their ad agency would never tell them to buy this domain.

Anyway, I just spent 2 hours writing this novel. I hope I opened some eyes to what we all have ahead of us to be able to get the FAIR MARKET VALUE on our domains before we all get tired of selling domains to each other for peanuts.

WE NEED NEW BLOOD. It’s a war when your hard-earned money and efforts are on the line. Find the target, shoot precisely. Know the power of your domains.