I have been thinking about how the domain name industry will look like in 5 to 10 years. Do you still think that domain names would still be fetching the same high prices like have seen in the recent past? Last week, DNJournal reported that GamesForGirls.com sold for USD$ 0.5m. I know beauty is in the eyes of the beholder, but I am not whether such a price is a clear reflection of the value of that domain name. Several sources show that the domain name receives about 44,000 unique visitors per month. Let us do the math to find out how much the name would be worth if only parked with a landing page targeted/optimized for the keyword “flash games”.
Given that Cost Per Click for the keyword “flash games” is $ 0.47 then assume that the CTR will be about 40% (game sites tend to have high clickthroughs), then GamesforGirls.com is bound to generate about $ 8272 per month (all other factors remaining constant). In a year the domain would generate approximately $ 100,000. If the buyer followed the same logic when buying the domain name then he paid a decent multiple of approximately 5 years (Earnings Before Interest Tax). That is not a bad deal in today’s market but the big question is where PPC is going to be in 5-10 years from today. For those who do not know the biggest PPC vendor is Google which offers two programs namely: Adwords and Adsense. For sure, Google as a company is playing its cards right by diversifying into mobile using the Android operating system.
In the long term I do believe that PPC is going to continue losing ground to social media, search engine optimization, email marketing and something else that is yet to be invented or is still unknown to me. Many companies are increasingly diversifying/migrating their marketing campaigns from PPC to Search Engine Optimization, email and social media. The costs of email marketing and social media marketing are relatively lower than search engine optimization. SEO tends to be expensive given the high level of resource commitment especially link building but its results are long-term.
Of course content is King in the eyes of the Searching Engines. Following the tweak in Google algorithms last week to drop content farms, it is a clear illustration of how of how relying entirely on Google for traffics can be a dangerous scheme especially if you are not playing by the game rules. However, I wonder whether there are no legitimate businesses who businesses have since lost their rankings even thought their content might be quality.
I think generic domain names with type-in traffic will most likely appreciate in value. However, most SEOs admit that it is very difficult to rank single word domains names such as “finance.com”. This is where ranking factors kick in – think about authority. If you search for “finance” Google Finance, Yahoo Finance, Wikipedia, CNN Money among other heavy weights will fill the first 9 SERPs spots.
And there is also a current discusion about what impact vanity URLs will have on domain names. For your information an example of a vanity URL is http://www.facebook.com/dnsblogs [i do not own this one]. If more and more people shift to using vanity URLs, does that mean that I will lose traffic to Facebook? SEO requires patience and hardwork, which some companies, which want a quick ROI, might not have.
For a new retailer, who wants to sell consumer electronics over the internet, email marketing might not make any sense in the beginning because there is no established mailing list (unless list is acquired through other means which could amount to spamming). This is when PPC kicks in if he/she decides to run Google Adwords ads and generate leads quickly. Logically speaking email marketing should follow every successful PPC campaign. The retailer will gather customer data including emails. If the law allows, the retailer can deploy daily email marketing campaigns directly to his old customers. This has the effect of reducing PPC budget by cutting the middleman (Google and domain owners).
There are studies which have shown that email marketing combined with social media lead to superior CTR. Coupled with its cheapness/popularity as medium, and ease of implementation and differences in regulation, email marketing offers a goldmine for a lot of companies. Email marketing is easy to implement given that all that a company needs is a campaign manager such as Aweber.com (advanced programming) and an in-house team (one employee) to take care of the template design and deployment. This is the reason why I think PPC might come under increasing pressure from other forms of internet marketing. I might be wrong because email communication has come under attack from social network sites such as Facebook. Nevertheless, I do not see a time when there will be no email communication.
Of course, we need to focus on mobile computing which has already gathered steam powered by luxury phone manufacturers like Apple and Samsung. For obvious reasons, such as screen size, mobile traffic is difficult to convert but I think tablets and smartphones might be a goldmine for app developers and game publishers. There is also the issue about about emerging markets where PCs never picked up but mobile internet is a major force to reckon. Emerging markets like South Africa, Malaysia, India and Singapore are witnessing hundreds of thousands of new internet users every day via mobile devices. I think this is where future growth in terms of internet traffic will be witnessed. Mobile content (games?) will be key. The nature of the content is anybody’s guess – games, news aggregation? I do not think growth of domain name registrations will dry out completely but we are likely to see a slight drop in the growth rate especially in the gTLDs where domainers have staked their presence. And theme of my rant is that ccTLDs are likely to be the next big thing…