Camiguin Island

An extremely important consideration in the value of a domain name is the number of words it contains. Single "real word" domains (no misspellings or abbreviations), especially in easily monetizable internet industries, can be enormously valuable, particularly in the .com extension. Two word domains, again without misspellings or abbreviations, can also be quite valuable, as long as the domain name can easily be monetized, and the TLD is of high quality. Values really plunge when you get to three words or more.

Domains containing misspellings, abbreviations, hyphens, characters not on a standard keyboard, and other oddities often have very little value. Also, domains containing phrases that are trademarked may be worth nothing, as the trademark owner may be able to summarily confiscate the domain.

The extent to which a domain can be monetized has a major impact on its value. Domains in the sex, financial, and health industries often top the list in terms of high value sales. Domains related to industries that cannot easily generate revenue on the web will usually have little value.

Generic domains tend to be more valuable than non-generic ones. A generic domain is one that contains only real words (ones you can find in a dictionary), and has no contribution from proper names (first or last). Generic .com domain names in highly monetizable industries can be immensely valuable, and are for the most part very hard to obtain (without spending a lot of money!).

The number of letters in a domain name also affects its value. Three letter .com names can be quite valuable, even if they mean nothing. Four letter .com names usually need to be pronounceable to have value, but they need not necessarily be real words in the dictionary (cool sounding four letter .com names can be very brandable, even if they are made up). When you get to five letters or more, value is driven by quality of the word or words (generic vs. non-generic, monetizable vs. non- monetizable, etc.). Once you start getting over 8-9 letters, value tends to decrease a lot, unless the name is highly monetizable.

The extent to which a domain can be branded may be very important in determining value. Domain names that are easy to say and remember, easy to type in, highly reflective of predictable monetizable content, and/or generate a lot of "type-in" traffic (people typing your domain name directly into the address box in their browser rather than finding your domain via a search engine) are highly sought after, and may transact for significant sums.

The size and profitability of the market to which the domain name applies is also important. This directly impacts how easily the domain name can be monetized. Needless to say, products and services that do not lend themselves to e-commerce (directly, or indirectly through selling ad space) will most often have little value.

We could go on almost forever listing factors that impact the value of a domain, but the above gives you a sense of what to consider.

Where's The Beef?

You'll notice the discussion thus far has presented no magic formulas for computing the right price to pay for your new domain name. I would love to give you a cool formula with lots of neat math symbols, but sadly things aren't that simple or elegant. In order to understand what you are going to have to pay, you need to learn a few things about the domain aftermarket.

First, there is way more supply than demand. This at first may sound encouraging, but unfortunately it isn't. Most domain resellers are very inexperienced, and tend to price their domains way too high, and as a result drive buyers away. Haggling often results in little movement in the price.

Second, the really great names, one or two real word .com domains in high traffic, high margin internet sectors are essentially all bought up. They do sometimes become available for sale, but always at extravagant prices.

Third, you have to be very careful when buying non-generic domain names (domains containing words that are not in the dictionary, or domains containing words that are in the dictionary but combine to form an unusual phrase that the courts will not consider "public domain"). These domains may be protected by a trademark. In such cases, the trademark owner can sue for ownership in court, and quite possibly be able to confiscate your domain without remuneration.

The Bottom Line

At this point you're probably wondering how much to pay for that domain on the aftermarket. As stated above, I can't give you a precise formula. I can, however, give you some advice based on the above principles, via reference to contemporary sales history. The basic idea is that I can provide you with anticipated price ranges (rather broad ones) that seem to be well in sync with recent domain auction closings.

At the very top of the spectrum, you have one word, and very high quality two word, generic domains in easily monetizable internet sectors. These may sell for $100,000 USD or more, and will usually have .com extensions, although occasionally some will be in other high value TLD's (such as .net, ,org, .info, .mobi, .co.uk, and .de). The very best of these domains may approach $10,000,000.

Global (non-country specific) TLD's other than .com's rarely sell for more than $100,000. The best of these, again one word and very high quality two word generic domains in easily monetizable internet sectors, usually sell for between $10,000 and $100,000, but sometimes may go as high as about $250,000. The best country specific extensions, mainly .co.uk and .de, lend themselves to the same kind of pricing as the non-.com global TLD's ($10,000 - $100,000). Some excellent domains in the .eu (Europe), .se (Sweden), .tv (Tuvalu), and .ch (Switzerland) extensions are starting to command these prices too.

Every week, there are several dozen sales of .com domains in the $10,000 to $100,000 range. These tend to be one to two word generics, but not as easily monetizable as the ones that sell for over $100,000.

There is an active aftermarket in two to three word .com names that are long (10 letters or more) and sell for $2,000 to $10,000. These tend to be generic, although some non-generics may be found here as well. These domains will in general be harder to monetize than the more premium names, either due to industry (not a high profit internet sector) or scope (serve only a subset of a larger sector).

There is also a market in global TLD's other than .com's in the $2,500 to $10,000 range. .net's and .mobi's tend to dominate this space, although you will also find .org's and .info's here. These are generally one to two word generics that are less monetizable than their otherwise equivalent brethren that sell for more.

Certain country specific domains tend to sell in the $1,000 to $10,000 range. These tend to be one word or short two word generics in the most attractive country extensions (especially .co.uk, .de, .eu, and .tv). Needless to say, these are not as monetizable as their more premium brethren.

If the domain you want does not fall into one of the above categories, you should think long and hard before spending more than $2,000 or so. Admittedly, there will be times when purchasing a particular non-generic name may be unavoidable (e.g., you already have an offline business name which is not trademarked, and need the corresponding domain for your online presence). The key point here is that absent proof of pre-existing heavy traffic, and/or profits from an already deployed web site at the domain, these names are just not that valuable.

In Closing

My hope is that this article has helped you to become a more educated domain buyer. The main takeaway should be that unless you have a truly urgent need to obtain a specific domain, you should use common sense principles and not overpay. Remember, in spite of the fact that so many good names are taken, most domains just sit and wait at aftermarkets like Sedo and Afternic because of the vast supply overhang. If the owner of the domain you want will not sell for a reasonable price, try to be creative and find alternatives, like using a different TLD, pluralizing, reordering the phrase words, etc.

The internet domain market will never lend itself to discounted cash flow pricing like financial securities, and the value of a domain is really nothing more than what the market will bear. Ultimately, values are determined by sale prices of similar domains. This article has hopefully armed you with that knowledge so you can negotiate with confidence.

Many marketing experts struggle with the concept of on-site conversion. After executing on a well developed marketing plan, and generating traffic to a landing page or website, the next step is to turn your prospects into customers.

Improving your online conversion rate can be accomplished in a number of ways.

Generate targeted traffic.

An important strategy for enhancing on site conversions begins even before you make changes to your website or webpage. Attracting the right people to your website is paramount for increasing conversions at a lower cost. Begin by evaluating your lead sources and determine the alignment of your prospects with your product.

One way to accumulate this information is with a survey that pops-up or pops-under as browsers leave your site. Often times, reducing or retargeting spend to the segments that perform the best can have a very positive impact on ROI.

You can also determine what traffic is best aligned with your market by carefully analyzing your Google Adwords campaigns. With the proper conversion tracking in place, it's easy to determine which keywords are generating sales, versus clicks alone. Focus on expanding your top converting keywords and driving truly interested prospects to your landing page.

Improving landing page performance

Once you've begun to attract the right prospects, you need to focus on converting them. The fastest way to improve conversion is through testing various landing pages. If you have the technology to rotate landing pages, testing multiple pages within a fixed amount of time, then you can learn quickly what page has the highest conversion rate. If you are limited to testing one page at a time, run each landing page for a week and measure the results. Your data won't be as accurate but can certainly send you down the right path.

Another method for improving on-site conversions is with the help of an automated touch program. With this technique, you can use an auto-responder that gives individuals an opportunity to reconnect with your business.

One example would be an abandoned shopping cart campaign. If users begin the purchase process (and have given you their email) but fail to complete the process, an auto-responder can be used to send and email message within minutes or hours, inviting them back to complete the purchase. You can use email best practices to enhance conversion, and touch individuals numerous times to move them through the purchase decision process.

In addition to targeting those who have started a purchase, you can also use an auto-responder for those who sign up for valuable information from your website. Perhaps they sign up for your newsletter, free lessons, or whitepaper. Once an individual has registered, the auto responder goes to work, sending appropriate emails at set intervals. The result is communication with a prospect that was previously unavailable to you. Work on improving conversion of your automated touch program by testing creative and timing of messages.

Using the techniques of better targeting, improving landing page conversion rates, and auto-responders can significantly enhance the performance of your online marketing campaigns. Plan your programs carefully and measure performance along the way, making appropriate enhancements. Over time, your results become automatic.