SkyDomains » Domains as an Alternative Asset Class

I think we in the domain industry need to stop pitching domains as a marketing medium and start pitching it as an alternative asset class – as online real estate. If you approach a business and tell them that “ the right name is to a business what the right building or location is to an offline entity”, then  it’s easier for people to see things as valuable…
The problem with marketing is that it has always been a bit nebulous. By that I mean until online marketing and advertising, one couldn’t show EXACTLY the relationship between dollar-for-dollar spending on marketing and how much profit or increased sales have come in.

People need to know when you buy the right domain you are buying TRAFFIC. Yes the branding effect of a good domain is nice but the smart companies realize the right domain is buying you targeted traffic.

Here is an example. You can advertise on TV and spend $5,000 and get a 1% conversion rate. You can spend that same $5,000 and get a keyword rich domain name or a domain with type traffic that will:
a) land you on the 1st page of google; 54% of the traffic goes to the person in position 1 (according to AOL statistics) so the right domain can very likely and materially mean the difference between no.1 and no2 for the right set of keywords

b) get targeted type in traffic. The right domain lowers your online advertising costs significantly. Let’s say you get a domain with 10 type in visitors per day. That’s 300 visitors per month. If the PPC cost per one click is high – let’s say $1/click. You are spending $300/month for 300 visitors. If you divide 5000/30 what do you get?

That’s approximately 17. In other words in 17 months (less than 2 years), you’ve paid off your investment. But here’s the kicker, it’s like renting vs. buying. Not only do you get to live in a place while you are buying it, you are also getting EQUITY. Unlike PPC traffic, once you purchase the asset out right, it’s yours FOREVER. So not only do you get that same 300 visitors per month, in less than 2 years, you’ve bought yourself 300 visitors per month for life!

There are other benefits as well. The smart companies know that type in traffic converts at almost twice the rate or regular traffic. If someone type in buycarnewyork.com they are not looking for free mp3’s. Ever heard the expression “first impressions count”? If someone finds what they want at your site, people are lazy. They will buy from you and they will keep coming back to you….

There’s also the fact that a relevant domain lowers one PPC costs.  So in sum, the right domain isn’t just about “sounding good to your customers”. It’s about location, location, location.

In reality a name is nothing more than an online address, precisely. The domain [domain].com is really the verbal equivalent of the Internet address 123.456.456 (etc).

When you put things in a perspective that a business can understand – showing the comparables between domains as an asset and their alternatives (buying traffic, SEO, etc). People can get their head around it.

I personally view domains as an alternative asset class and I feel if we all can better educate the public, the better off we’ll be. By the way, I saw an interesting article about the guy who owns NewYork.com that you might find interesting – http://www.dnjournal.com/cover/2007/november.htm

Written by S. Abidoye
Opinions stated are those of the writer and does not necessarily represent the position of SkyDomains.