Domainers and Lead Gen – If or When?

Now is as good a time as any to begin our semi-annual LeadsCon shameless plugs. It’s actually a great time given that LeadsCon is now less than five weeks away. As always, DMConfidential readers have the great fortune to pay the absolute lowest price; in this case, that is $400 off the on-site price. What’s the catch? You might have to read an article about the space before getting to the discount link. Phrased that way, it’s actually a great deal. You save and get insights. Perfect.

While this article focuses on lead gen and absolutely hope it leads you to registering for LeadsCon, the origins stem from another trade show – Oversee.net’s DomainFest. If you thought lead gen was a universe unto itself, then you have not spent time with domainers. The real domainers are like the Godfathers of the internet – those who understand the power of the domain name and its parallel to owning land before there was any proof that this digital land was fertile. Here they were spending tens of thousands of dollars per year if not more without any clue that they could turn into money. The lower hanging fruit of this crew has unfortunately given the rest of the industry a slightly poor name, those that specialize in owning domains that take advantage of someone else’s brand, i.e., the dreaded typo squatter. Those who held onto the beachfront property through the advent of Adwords have found themselves with a veritable annuity and the only real no sales, make money in your sleep businesses.

The domain name space is anything but rosy. Those who service the market have found themselves faced with some not-unexpected headwinds, ones that don’t even involve the rise of the app and disintermediation of the domain. That’s a whole conundrum unto itself. The domainers must primarily fight against the hand that feeds them, Google. Over the years, Google has become more strict about what domains they will monetize and the ads that appear on them. In a not-unexpected Catch-22, those that monetize through parking won’t rank in organic. Is lead gen an option? If so, why hasn’t it happened already?

Domainers represent an untapped opportunity for lead gen. It’s just not as easy as it looks – for either party. The reason is scale. The best domainers own not hundreds but thousands even tens of thousands of domains. Some even own hundreds of thousands. Once you get up to even fifty domains across multiple categories, you’ve encountered a problem. It’s hard enough to take care of one let alone more than one. If your speciality is finding and owning, you need an ad network that can monetize. If you are a lead gen company, it takes a lot of expertise to properly monetize just one vertical let alone multiple.

Here is a typical domain parking page.

Domain parking, as it relies today on search ads means that there is incredible liquidity. If there are bids for keywords, there is a good chance that a domain can make money. Given that there are millions of ads, the monetization options are immense. Plus, parking requires little work on the part of the domain owner, and implementing across large numbers of domains can take place without immense amounts of work.

The other option instead of parking, is CPA parking. Instead of search, it relies on a generic and not customized run of network ad like we see below, quite often incentive promotion.

Let’s look at the next level of development in the domain ecosystem.

Again, we see a premium domain, but this time it looks more like a real site. It still doesn’t rank high for the generic term it represents, but if users type in the page, their experience will be more fulfilling. It also looks like a business not a placeholder. The challenge with these approaches, and it’s something companies like Deman Media think about all the time, is scale. These type of pages take orders of magnitude more work than a parking page. They don’t necessarily monetize better, and it’s anything but guaranteed to have them show up in the organic results. It explains though why the most popular approach has been Demand Media’s approach toward cheap content and hoping they can make more in ads than it cost their army of freelancers to produce rankable content. It’s a more human approach to the challenge of monetizing domains.

Last, we see a premium domain that has a business built on top of it.

We love this company for so many reasons. A great domain with traffic helps solve some of the chicken and egg problem with building marketplaces. It attracts buyers and sellers on its own. The easy road though is just to become a landing page / redirect page for other advertisers instead of creating the value and owning the rewards. That part can take a domain that makes $100’s to $1000’s per year into the millions. As we mentioned before, it’s just a very different approach and what has been missing is a way to do that in scale. Parking can be done. Content can be done. Affiliate can somewhat be done. When will lead gen?

The lead gen ecosystem must find a way to work more closely with domain name holders. Only then can the two sides both unlock this step-wise function of increasing value. For the lead gen ecosystem it means software and tools so that domain name owners can turn pages into businesses – lead routing, buyer sign-up, analytics, etc. For the domain space, it means investing a little more time for returns that may make more time, but that is how they 100x their earnings. It just has to come at less than 5x the workload.