Valuation question

[Ctoddlittle]

No such thing as a silly question....right? I am curious to know how the level of Advertiser Competition (Adwords Keyword Tool) plays into the value of a domain. Example, a search term ..say..."big noses"... gets 45000 avg searches per month, the CPC is $4, The advertiser competition is almost zero. Does this mean Big Noses.com is worth a good bit based on a conversion rate for the searches and clickthrough rate for the CPC? Or is it worthless because almost no advertisers are bidding on those key words?


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[weblord]

several factors are involved here namely approx. search volume the prior month, estimated avg cpc, estimated ad positions, estimated clicks/day, estimated costs/day, involve also the factors of what type of publishers are displaying the ad and also what type of site/niche/category of site that are paying for it.

 

[nielsencl]

The Advertiser Competition can change over time, so that is not a good indication in my mind. I think the most important factors are the number of searchs or potential for clicks, and the bid range.

If there really are not many advertisers, then the bids should be very low. But in your example, nose jobs are pretty expensive, so any advertisers can afford to bid high.

I use the last column in the Google Traffic Estimator after I find the keywords with the keyword tool. This should confirm the traffic, but also provide what an advertiser can expect to pay. Of course, these amounts are nothing like what you will get if you part the domain, but they are great to indicate potential value, and could be used when selling to show a buyer what they can save by buying the domain, and putting their information on it. Even if you only got one click a month for a year you would save money if the click cost you $1, since the registration is only about $8.

 

[Corey]

another useful tool that will give you information is http://estibot.com/ just sign up as a Free Member

Cheers
Corey