December 13th, 2007 by andy
Today I want to continue what I started into yesterday. That is, the pros and cons of domain parking and domain development.
As I mentioned yesterday, one of the main advantages of parking is that you really don’t have to do much at all. If it gets type-in traffic, the money pretty much happens. Sure, there might be some optimization of keywords, but it’s a pretty simple process. For those lucky few that own those really powerful domains, this works just fine.
For the rest of us that have domains that are good but not great, development may be a better option.
When you park a domain and depend solely upon type-in traffic, you’re essentially limiting the ways that somebody gets to your site. I call this the Keyhole Effect. That one way, direct navigation, is the only way you’re going to see any traffic. And it’s only that one little phrase. Typo on that one phrase? That’s a lost visitor.
If you DEVELOP that domain, you unlock the doors of multiple traffic points. Search, link referrals, longtail, personal referrals, etc…
One reason to park is that you get that relationship with Google and Yahoo for high value clicks. If you load in Adsense or YPN, those are clicks that tend to be lower value because a lot of advertisers either lower their bids or opt out of that network entirely. As an advertiser, it’s certainly what I’ve done as my ROI through those channels are much lower.
As a domain owner/publisher I want to monetize my traffic as easily as possible. I prefer PPC because all I have to do is deliver the traffic. The visitor from my site clicks the link and is gone. I’ve done my job, now pay me. If I’m monetizing through some sort of inquiry/lead/purchase based affiliate program, I have to rely on the program manager to effectively convert the traffic I send them. I lose enough sleep over traffic as it is. I don’t really want to be worried on downstream conversions that I’m not involved with.
So, what I’m getting at is that you should develop if you think you can get traffic from from those other sources. If you’re only going to a half-a$$ed development don’t plan on getting any natural search rankings, any quality directory listings and friendly or linking referrals. You will be giving up the cleanest and easiest monetization. But if you do a good development job, you will easily surpass what you would have made from just parking.
December 11th, 2007 by andy
Kevin Leto recently wrote down his thoughts on the development / parking debate for domains. Really, really solid stuff. So solid that Rick Schwartz got Kevin’s permission to post it on his blog. You can see it here…
Summary – Domain parking can certainly make money. It can even make a lot of money for high quality domains. Enough people directly type in domains as a form of search that single domains can make the owner millions a year.
But what if that owner developed that domain in to a working, high quality site? I don’t think anyone can disagree with what Kevin says. I also firmly agree with it as it directly relates to my business model.
I don’t own any monster domains. Right now, I just don’t have the money for it. But what I do own are close to a thousand smaller, targeted, quality domains that bring a few visitors/month/domain. I’m in the traffic accumulation game. Doesn’t sound like rocket science, does it? The traffic accumulation game has been around since the beginning of the commercial internet. Business burned themselves out by spending millions of dollars ‘acquiring’ traffic with the plan to somehow monetize that traffic at a later date. As we all know, that led to the downfall of the first wave.
But still, isn’t that what it’s really all about? Well, sort of. As Kevin points out, parked domains may have traffic but they don’t have CUSTOMERS. They’re really just transfer points on the way to another domain. They may or may not ever return if they’re satisfied by their ultimate destination. By building a site with a satisfying user experience, people are inclined to revisit multiple times, provide their email addresses for newsletters or discounts and they might also refer friends and family to that site.
My whole business is based on what I call VPU (value per unique). How much money do you make per month and how many unique visitors did it take to get there? It’s blending an average, but go with me here. It’s inclusive of however you choose to monetize your traffic. Per click, per impression, per action, whatever.
Example 1: Frank Schilling – A legend in the domain business.To say he’s a just a parker would be to underestimate him. But still, all of his domains (to my knowledge) are parked. There’s a great write-up about him this month over at Ron Jackson’s Domain Journal. He’s got something like 250,000 domains. He gets 30 million unique visitors per month and makes somewhere north of $20 million per year. If you do the math, he gets 360 million uniques per year. Chop up the $20 million over those uniques and his average VPU is worth about $.06 Hey, clearly it works for him.
Example 2: Jeremy Schoemaker. Shoemoney writes one of the most popular blogs about making money online. On his site, he has a picture of him holding up an Adsense check for $132,000.00. That number represented one month’s earnings for him from Google. It was made via one of his ringtone sites. According to a post of his, he averaged about 75,000 unique visitors per day that month. About 2.25 million for the month. That’s an average VPU of…. about $.06.
That’s not to say that you will automatically have a VPU of $.06 if you park or use Adsense. ** sidenote: I happen to think Adsense is one of the poorest payouts, but I’ll explain that in another post** I think that number is pure coincidence. But it does give you a baseline. If you take that number, how many unique visitors does it take you to get to a comfortable position? 5,000 uniques per day will get you to $100,000 per year. Sure, that seems like a lot of traffic on a daily basis. But what if you spread that over 500 microsite domains? Now you need each to average 10 unique visitors per day per site. Some sites will be in the hundreds or thousands and some will be in the single digits. But you just need to get to 5,000 per day. If you can find a way to make your VPU higher than $.06 you get there quicker.
A great thing about a site that people come back more than once is that you have the opportunity to extract value from them on multiple occasions. It will snowball and now you’ve got the recurring visitors along with all the new unique visitors that are finding your sites for the first time!
Yes, it’s more work than just parking. A lot more. But I don’t happen to own the top quality domains that can deliver that volume of traffic on just the type-in and I don’t have the money currently to acquire them. What I DO have is the knowledge to generate traffic from development and some moderately good domains that will help me achieve my goals.
