How Important Are Monthly Searches ?
I was playing chess with my good friends Michael Castello and Toronto Domainer the other night, at a smokey cigar club in Ventura County. Michael is the most astute chess player I have ever met. Somehow, it seems that he is able to see five moves ahead. Michael clearly has the same keen ability away from the chess board. He was registering category killer domains before most people had ever heard of a domain name. Today Michael holds one of the preeminent domain name portfolios in the world.
Toronto Domainer is also an exceedingly formidable chess player. He is able to quickly establish a defensive formation which is seemingly impenetrable, while his knights and bishops wreak havoc on his opponent’s pieces. Toronto Domainer was able to utilize his innate skill in strategy and planning to help procure a buyer and assist in the negotiations of Michael’s $3.1 million dollar sale of Whisky.com.
I just recently started playing chess again, after a long hiatus. My current style of play more closely resembles a force led by the Minister for the Arts, employing a doctrine which is somewhat abstract and expressionistic.
So after a few belicoso cigars and a number of chess matches, we were discussing a set of domain names which I own. The domain names, FixedLoans.com and AdjustableLoans.com, are extremely brandable, very commonly used terms, with low monthly search figures. Michael and I thought that the set could potentially garner six figures while Toronto Domainer felt that the set would bring in less, in great part, due to the low monthly search numbers and the low number of sponsored ads competing for keywords. Our discussion and differences of opinion brings up the decades old debate; how much of a domain’s value determined by the brandability and how much by popularity of the search term?
Clearly, there is no right or wrong answer here. Search term popularity is almost always a good thing. I say “Almost” because being a highly searched term would not make for a great domain name if the term were “George Clooney” or “Microsoft,” unless, of course, you are George Clooney or Microsoft. In my opinion, meaningful, brandable, domain names can often have real value if they are easy to remember and hard to forget, regardless of search term popularity.
So, I set off on a mission this evening. I compiled a list of 20 domain names from DNJournal’s top 100 sales for 2014. DNJournal.com is the holy grail of domain name investing. In addition to their great articles, they put together a weekly sales column which outlines the reported domain sales activity for the previous week. The information is gathered from a variety of sources. DNJournal is, in my opinion, the best barometer of market trends and is a must read for serious domain name investors and executives in the digital space.
I selected domain names of greater than three characters from the bottom of the sales chart. The sales prices ranged from $60,000 to $80,000. I used the AdWords keyword planner to obtain the average monthly search figures and suggested bids for each domain name. The results were very interesting. Of the 20 domain names:
3 domains had over 100,000 average monthly searches.
5 domain names had less than 1,000 monthly searches
5 domains had a suggested bid of greater than $1.00
7 domain names had a suggested bid of less than $0.10
16 names were parked or inaccessible prior to sale.
2 names were nicely developed, prior to sale, 2 were poorly developed.
9 domain names are parked or inaccessible since having been purchased.
10 domain names were developed since having been purchased, one is being redirected.
I realize that this study is less than scientific and that these comps are rather simple. Even then, it does give some indication that a meaningful percentage of high dollar domain name sales relate to domains with less than stellar monthly search and suggested bid numbers. It also indicates that many undeveloped domain names fetch top dollar.
Meaningful domain names can be a great asset to advertisers who wish to retain a larger percentage of their viewership. Let’s say you operate the Bank of Upper Volta and use the domain name BankOfUpperVolta.com. You decide to invest millions of dollars on a print and television advertising campaign, to inform people about your very low rates on fixed loans. At the end of the commercial, would it be prudent to direct potential customers to: BankOfUpperVolta.com/FixedLoans? Wouldn’t it be worthwhile to invest a little bit more to acquire a meaningful, brandable domain name, such as FixedLoans.com? There are a large number of financial institutions offering fixed loans but there is only one FixedLoans.com.
There is really no good reason why any large corporation should feature a domain name with a “/” on a television commercial or print advertisement. That’s one reason why I strongly believe that certain brandable domain names can have great value, irrespective of monthly searches or suggested bids. If retaining the customers, which you have invested so much money to attract, requires an additional investment of $10,000, $100,000 or even $1,000,000 wouldn’t it seem a prudent investment? What good would it be to garner their interest, if at the end of the commercial, they find themselves lost on the information highway, unable to find you?
Where do you stand on this topic? Your comments and opinions are greatly valued and appreciated.