Subscribe
Google AdSense for Domains Case Study Shows Domains are Undervalued
Submit to Digg.com!
June 7th, 2007 by 
Jay Westerdal
“Our clients’ conversion rates with domain ads are double their conversion rates on search. Domain park sites generally convert at a rate of over 5%, while search and content conversion rates are at about half that.” Tommy Hanson, Director of Partner Relations.
Wow, this report that Google commissioned may be trouble for them. Google may need to double the payout to Domain owners. For every click through on a domain it takes twice as many click throughs on google’s own search engine. When a person sees an ad they are twice as likely to buy something when they see the ad on a parking page. I think Google shot themselves in the foot. Expect domain owners to negotiate for a higher revenue shares because they are subsidizing the rest of the adsense channel. If the domain owners flipped to a new ad partner the advertisers would see a drop in conversations. Granted they would not know why but the effect would be the advertisers would want to pay less for each advertisement. That would mean less revenue for adsense on websites and for Google itself.
Both Google and Adsense for websites are benefiting off of domains raising overall conversion rates.
« Newer Post Older Post »
Posted in Google |
June 8th, 2007 at 4:19 am
Hi Jay,
The domains that Tommy Hanson advertised on may be under-valued. Same goes for many premium generic domains with type-in traffic. BUT - I would argue that domains in general are OVER-valued.
As an Adwords advertiser, whenever I opt in to Google’s content network, the referral sources I see in my traffic logs are generally NOT high quality generic domains. Instead, I get the sort of trickery that Domain Name Wire wrote about a few days ago. And my conversion rate from malformed domains with as many as three dashes is… zero.
http://domainnamewire.com/2007/06/05/an-example-of-pay-per-click-arbitrage-trickery/
In other words, investors in premium names are suffering through associations with owners of low quality domains because all domains currently lend up in the same ad network. I’m not sure domain owners as a group will be able to negotiate higher rates unless there’s some kind of filtering or scoring system that separates good domains from the bad.
Google and Yahoo are trying to achieve this through variable pricing. But as many domainers have pointed out, even if they deliver 3x better ROI that Google/Yahoo’s own in-network traffic, the highest payout they get is 100%. A better solution might be for domain parking providers to pre-emptively screen/rate domains and sell traffic from Class A, Class B, etc domains to Google/Yahoo separately at different rates.
Your thoughts?
June 8th, 2007 at 9:25 pm
I’m going to guess the reason the high performing domains only get the 100% is because the 2 big boys wouldnt want to admit to their advertiser base that there is actually another traffic source that may convert better than their own traffic. We’d see a shift in ad dollars and more strength and recognition given to the domain space. Since the domain space and inventory of traffic is so segmented and spread out, I think the SEs can continue to do this. As the space matures and advertisers have an option to buy quality domain traffic, they will gravitate toward it . . . if indeed it is better converting traffic. Right now it’s good for goog/yahoo to lump all domains together to water down the good stuff with some hyphen/foreign/bot crap domains.
June 21st, 2007 at 6:39 am
Hi Jay,
Very interesting article.
I’ll admit.. most of the content network traffic isn’t that good.
That’s why its important to track which of these content network sites are bringing in the most sales.
Once I started tracking which Adsense sites generated me the most affiliate sales, I was able to turn off all the bad advertisers in the content network traffic, and save a lot on my PPC costs.
If your readers are interested I have some interesting videos on this at my blog:
http://www.keywordradar.com
Take care,
Brian