Maximizing ROI on premium domain names

[SlashRoot.Com]

Hello,

I am glad to join this great forum. After having read through a lot of posts here, it felt like a nice place to hang out....

Just wanted to share some of my thoughts on marketing of premium/generic domains, and invite input from y'all.

As I see it, marketing of premium domain names differs greatly from the run-of-the-mill.domains because:

* Most our our fellow domain name investors/speculators that hang out with us at this (and other) forums usually buy the domains mostly for the resell market, and not for their own use. This make it quite improbable that we find a buyer for our super duper domain in one of these forums. It can happen, but may not be that likely.

* Most domain resellers do not have the resources/interest/time for developing the amount of content that would be needed to leverage better returns for a premium domain.

* Most of the businesses/end-users that would pay top dollars for premium domains do not always hang out with us at these domain forums.

* It takes a lot of time, active marketing, and a lot of patience to sell a generic domain name at or near its true value.

I often see premium domains being dumped at a fraction of their true potential just because the owner was unsuccessful in finding the right buyer, within the time frame that (s)he was prepared to wait.

I have looked around at some of the domain name related forums, but have not seen much discusion on this topic.

I have been at it for a while now, having my first batch of domains registered around mid 1996. So I will start off this discussion by outlining what I have found to be a winning strategy (YMMV):

1: Create at least a decent amount of content, and continue to log traffic while brainstorming/putting-together an active marketing plan,

2: Document any offeres received. Seems so trivial, but considering that a premium domain name may take several years to sell, often it is not that easy to find someone's contact information a year or two down the road.

3: Almost everyone wants a zillion dollars for their favorite .Com possession, but it rarey happens these days. Therefore, the first step is to look at it from the buyers point of view, and ask: What will be the maximum amount that I will be willing to pay for it? That's right, it does not matter how much I want for a domin. What matters is how much a buyer would want to pay for it. It also helps to calculate ROI -from the buyers' point of view. I also update these numbers periodically, at least once in six months or so.

4: Identify potential buyers in the target business segment, and send out a well thought-out piece of communication to the potential buyers.

5: Look at own cash-flow requirements, domain inventory, etc., and adjust the expectations as things may (or may not) shape up over time.

6: Not having content and the traffic stats can seriously lower the amount of money that a buyer will be willing to pay for a domain. Without the content, and traffic, a buyer is paying for a perceived value. If there is decent content, traffic, and some revenue (advertising, membership, etc.) stream, the buyer sees something more tangible, and the results could be real sweet.

7: Continue to look at the traffic and redo the math -as waranted.

The expected returns, ROI projections, and the marketing plan should be clearly documented, but must be treated as a living document, because those numbers are not cast in stone.

This is what I have found to work for me -most of the times. YMMV.

I wanted to share this with you here in the hopes that it helps someone, and also to start off a discussion, and to learn from your experiences. Feel free to add your suggestions/comments...

best regards,

SlashRoot

 

[painperdu]

Hello and welcome to NamePros SlashRoot!

Your observations are right on target for the most part and the only thing that I might add is that the old(?) internet mantra, "content is king", is still valid today as it ever was.

A good name is helpfull but a nice and novel idea about helping people use the internet is even better. Google, eBay, Yahoo, and Paypal did not rise to the top of thier areas because of great .com names. In fact, there was nothing spectacular about the names they chose to use. They all made it to the top by providing in-demand content. In short, they all built brand value into otherwise lifeless domain names.

When was the last time you went to 'auction.com' to auction something? Have you ever used 'bank.com' to send or recieve money? How often do webmasters speak of optimizing thier websites so that they get a favorable listing on 'search.com'? My point is that while these names would help to jump start a venture they really aren't worth as much as great content and a decent $8.00 name. Moreover, there is ample reason to believe that instead of pouring money into a top-tier name one would be wise to instead invest the money into content development. What would have happened, for instance, if the group that paid 7 million dollars for 'business.com' instead invested 7 million dollars branding a less expensive name? Give me 7 million dollars and I can guarantee I'd do much better than a glorified web directory!

 

[Jeff]

Originally posted by SlashRoot
Hello,

I am glad to join this great forum. After having read through a lot of posts here, it felt like a nice place to hang out....

Just wanted to share some of my thoughts on marketing of premium/generic domains, and invite input from y'all.

best regards,

SlashRoot

Excellent post, SlashRoot ... and welcome to Namepros!
With your permission, I'd also like to copy this thread to the "Marketing Forum", as indeed you have discussed and highlighted some of the integral aspects of successful marketing of one's domain name(s).
PS. 100 NP$'s en route to you now.

 

[SlashRoot.Com]

Thank you Painperdu & CoolHost.com for the welcome and your comments.

Painperdu: You made some excellent comments. We are on the same page here.

"Content is King" is like one of those eternal truths that hold true ragardless of the the ups and downs in this market. Of course, with ample content, and an appropriate (aka read BIG) name branding budget, any domain name can be moved up to the top. True, some of those premium domains did sell for a price that reflected what Alan Greenspan would label as "irrational exuberance." However, considering that the price of premium/generic domains have already come down to a level that seems quite realistic, generic domains offer, at the current price-levels, the best of both the worlds.

For example, I recently heard that someone picked up Internet.net in the range of $10k. About two years ago, it would have been unthinkable. So if one was to buy a generic domains now, at such low rates, it would mean big savings in brand development and name recognition costs. Buying a name that is hyped up to be in six digits may indeed turn out to be a bad choice. However, starting out with bank.com (not mine), or QualityLuggage.com (mine) certainly beats starting out with whatchamacallitCryptic.name and not much of a name-branding budget.

I think generic names have never been as good buy as they are today, at the current price levels. They certainly hold a lot of intrinsic value. For example, Look at what Honda has done with Motorcycles.com or what P&G has done with ToothPaste.Com. Personally, I would have liked Harley to own MotorCycles.Com, but that is a whole another thread.

Decision on how much to spend on a generic name should be based solely on careful number crunching.

I am with you on the fallacy of buying names for out-of-this-world prices just becuase they have been hyped up to be so cool. However, there is a case to be made for the excellent value that generic domains offer at this time. I think this is the time to get into active marketing and get the most returns on your generic/premium domain names, and hence this thread.

Thanks for the insight, Painperdu:

CoolHost.com:[\b]
Of course, your suggestion to copy(move?) this thread to Marketing Forum is right on the money. And thanks for the NP bucks!

--
SlashRoot

 

[Jeff]

Originally posted by SlashRoot
CoolHost.com:
Of course, your suggestion to copy(move?) this thread to Marketing Forum is right on the money. And thanks for the NP bucks!

--
SlashRoot

Most excellent ... and thanks again for the GREAT thread, Slash!
[/Moved to the "Marketing Forum"].