By Michael Gilmour. May 18, 2015
spoken and attended a lot of conferences over the years….and clocked up quite a
few airline miles in the process! During this time I've
seen so many people come and go, businesses launched only to vanish and domain
investments completely mismanaged.
why am I reflecting on these things? I was speaking with a client this morning
and the conversation caused me to journey down memory lane and review a few of
my old presentations that I’ve shared at
had a bit of a laugh when I looked at a presentation that I did at TRAFFIC
Vegas 2008. One of the slides predicted the recession and the collapse of
domain valuations and PPC revenue. Guess what….it happened.
I a living genius? My wife would be the first to say, not at all! What I try
and do is take in what is happening in the complete industry and then ask the
reason “Why?” This is quickly followed up by, “So what does this mean?”
take a look at the state of the domain industry with these two questions in
do many people think that domain parking is dead? Back when the revenue squeeze
came on many domainers were left holding two types of domains, traffic and
brandable domains. At the time brandable domains weren’t in
fashion because there was a global recession. Despite this everyone believed
that they knew their domains would be worth a fortune (wink, wink).
investors convinced themselves that PPC rates were declining and that soon all
of their traffic domains would be worthless. So they sold them off at discount
prices to help fund the registrations of the brandable domains.
You see, brandable domains are like a ticket in the lottery. You have to
have a ticket if you will have any chance of winning….the only problem is that
the domain lottery ticket has to be paid each year. When you don’t have the funds to finance registrations you have no choice but to look
at selling the one thing that does have value now……that’s traffic domains.
PPC rates decreased there was pressure to sell while you still could. Very few
people thought about how to increase PPC rates and maintain their revenue
lines. A herd mentality developed and traffic domains began flying out the door
while at the same time domainers dropped more speculative domains.
want to say upfront that although PPC rates did decrease they have not
decreased as much as many domain investors have experienced. Here’s
some data that I think you’ll find
interesting. The most that ANY parking company wins is 25% of the traffic. This
means that in the absolute best case scenario, if you left all of your domains
with one parking provider then 75% of the time the domains can perform better
Some domain investors caught onto this and began manually moving their
domains around to find the best monetisation solution. Here’s another stat that most people aren’t going to like. After nearly nine years of running what I believe is one
of the most sophisticated optimisationsystem in the world I have found that
around 33% of domains move providers every 3
months.The problem is that it’s a different set of solutions and a different set of
why did PPC rates decrease? It was really simple, because they could. Google is
the dominant provider of PPC revenue to the entire domain channel and to
maintain its position in the industry it logically did two things. To fully
understand this we need to first understand the industry at the time.
had begun consolidating around several large hubs of monetisation providers,
the largest two of which were Domain Sponsor and Sedo. The problem with a
consolidating market is that the tail could end up wagging the “Google dog”.
traffic was spread throughout the industry Google could play one player off
against another. The problem became when Domain Sponsor raised a lot of capital
via Oakhill Capital Partners and Sedo became part of United Internet and
developed a domain sales revenue stream that was not dependent upon Google.
Both these actions meant that the companies could now buy vast amounts of
traffic and potentially break the Google exclusivity stranglehold.
next article will continue the story of the domain industry and how Google
responded to this threat.
Gilmour has been in business for over 32 years and has both a BSC in
Electronics and Computer Science and an MBA. He was the former vice-chairman of
the Internet Industry Association in Australia and is in demand as a speaker at
Internet conferences the world over. He has also recently published his first
science fiction book, Battleframe.
is passionate about working with online entrepreneurs to help them navigate
their new ventures around the many pitfalls that all businesses face. Due to
demands on his time, Michael may be contacted by clicking here for limited