Monetization Strategy

One of the keys to ensuring maximum profits is understanding your traffic and matching it with the right kind of monetization.

Parking

Parking is arguably the quickest and easiest way a domainer can make money after she/he has purchased the domain. It’s also the most widely used.

Most parking companies have automated systems that attempt to identify the keywords found in the domain and then match it up with categories, graphics and PPC advertising.

Direct PPC Advertising

This is the “DIY approach”. Rather than give a % of your PPC advertising to a parking company, you could sign up for PPC advertising yourself. However there are usually strict controls on parked domains, so be sure to check before you begin work.

Affiliate Programs

Niche domains can often perform well in this category. Combining valuable content with affiliate links can lead to big profits. It’s a different model than parking as you are focusing on a conversion rate (rather than a click-thru rate).

How do you do it? Join an affiliate program that closely relates to the theme of your website. Then, place a link to a specific affiliate/product on your website. If visitors click on the link, you get a percentage of a profit if a sale is made. Of course, you should join several affiliate programs and give preference to those that offer a lifetime commission option.

Custom Built Sites

This is the future of domaining. Building sites with something to offer – real content, social networking, communities etc.. The key is finding a model that works, be it subscription based or a combination of affiliate products and PPC.

If you are building a site yourself, give some serious thought to selling your own advertising. This could be in the form of banners, pay per click etc.. Do some research on what competitors are charging and go direct to relevant advertisers.

Long Term

When deciding on a monetization strategy, you need to think about what you want to achieve.

•    Do you want to build up an asset in the hope that a larger entity acquires you?

•    Do you want to make a quick buck, with a view to selling the domain in a year or two?

This will ultimately determine that path you need to take.

Parking Companies

There are a large number of companies that monetize traffic using pay-per-click advertising, including:

* ActiveAudience
* Bodis
* GoDaddy Cash Parking
* DomainHop
* DomainSpa
* Domain Sponsor
* Dotzup
* Fabulous
* Goldkey
* iMonetize
* NameDrive
* Parked
* ParkingDots
* Parking Panel
* RevenueDirect
* Sedo
* SmartName
* TrafficZ
* Traffic Valet

Your results will vary between parking companies due to a variety of factors including the advertising network used, fraud mechanisms, number of bidders on a particular keyword or keyphrase.

Differences Between Parking Companies

Let’s get one thing straight: not all parking companies are the same!

Yes, they pretty much get their ad feeds from the same popular ad networks. However, their rules about how you can lay out your pages, where you can place ads, whether, and the extent to which, you can add or modify page content, can vary widely. And that’s not to mention the differences in terms of payouts.

For example, some companies allow the home page of your domain to display a page that lists a number of topics (but not ads) and it’s only when a visitor clicks on a topic that they are taken to a page where ads may be viewed. In other words, making money with such companies requires a two‐step conversion. The visitor must click on a topic, and then on one of the ads before you generate any income. However, that does not necessarily mean that you should avoid working with such parking companies. In some cases, they may actually generate more conversions and income than another parking company that allows ads to be displayed on the home page of your domain. I’ve certainly experienced this with some of my domain names.

Parking Strategy

Don’t rely on just one parking company. Sign up for as many parking companies as you can and move your portfolio around to see what works best. Even if you have a highly converting domain, earning you a lot of money, don’t accept that this is as good as it can be. You never really know how “high is high” without trying lots of different things.

You really need to test, test, test in order to work out what works best.

Tips For Choosing A Parking Company

1. Are they talked about in a positive light on popular domain forums?
2. Do they have a track record of paying their customers on time?
3. Do they have staff in industry forums that respond to posts?

Some of the more popular companies that answer “yes” to these questions include Parked, Sedo, Fabulous and NameDrive.

How To Optimize Parked Domain Names

Parking

Every now and again I see both new and experienced domainers posting messages on domaining and Internet marketing forums like this:

“I bought this domain name. Since it has x,xxx visitors per month, I parked it… but it’s not making me money. Should I sell it? Any offers?”

My first thought is, “yes – sell it to me!” But then I think no, I should stick to my niche! Seriously though, these messages look like someone is either:

1. Using a parking program that doesn’t convert very well for that domain.

OR

2. Hasn’t fully optimized their landing page.

So, what should they do? That’s right: test, test, test! It’s important to test properly though. Now, due to certain restrictions, it’s difficult to conduct a statistically correct split test of the landing page of a parked domain. But that doesn’t mean not to test. It just means doing the best you can.

Just don’t just give up if you get 10 visitors and nobody clicks – that’s not enough traffic to base a decision on! Ultimately it depends on your traffic, but the bigger the number of results, the more statistically significant they are.

So… make one small change, wait a few days, and then review the results. For example, here are a few things that will impact on your conversions and are worth testing:

1. The keyword or keyphrase you’ve chosen for your parked domain. For example, you might want to use a keyword that’s related to your domain name. For example, if you have an insurance web site, you might choose one of these:

•    insurance quotes
•    insurance provider
•    insurance estimate
•    life insurance
•    pet insurance
•    car insurance

2. The layout of the landing page. Try different layouts.

3. The graphics displayed on the landing page. In some niches, people will be coming to your site expecting to see graphics, so don’t discount these. Test them instead. Also, whatever graphics you display, they should relate to the keywords you’ve chosen.

4. The colors on the landing page. I have personally seen huge differences in click‐through rates simply because of color. For example, dating and adult sites convert well when landing pages are red or black. Here’s a hint about choosing color schemes: visit some high profile web sites in your niche and look at the colors they use. What colors are the background, buttons and graphics?

Alternatively, go down to your local store and view a couple of magazines related to that niche. Test various color combinations until you’ve found the highest‐earning one. Basically, the more you understand your target market, the faster you’ll be able to short‐cut some of your testing and optimize your domain. So get inside the heads of your targeted visitors. Who are they? What are they really looking for when they visit your site? Imagine yourself as one of the members of your target market.

You come across a link to your domain name. What are you expecting to find when you click on that link? What information are you looking for?

For example, if you have a real estate domain name, most visitors will probably expect to see content related to property. However, if you’re in the home rentals niche, they are probably not looking for a picture of a house with a “for sale” sign on the front. They’re looking for properties to rent. Understanding distinctions like this that will increase your conversions. So, not only should you provide words and imagery that visitors would expect to see, but you also need to avoid displaying content that is likely to confuse or create doubt about whether or not they’ve come to the right place. You need to make it as easy as possible for them to find the information they want and click on your ads or affiliate offers.

Rule of thumb: your site is a conduit. Don’t make your visitors think… make it easy for them to click and get to where they want to go.

Correspondingly, including animations, video, audio, or anything that distracts a visitor from clicking on your offers should be avoided. However, you want to subtlety direct the visitor to your ads. Avoid asking them to click as this is probably against the terms and conditions of your parking company and the advertiser. But do guide them to your offers so they virtually have no choice but to click on them or exit the site altogether.

Who Should I Park With?

Parking Companies

There are a large number of companies that monetize traffic using pay-per-click advertising, including:

•    ActiveAudience
•    Bodis
•    GoDaddy Cash Parking
•    DomainHop
•    DomainSpa
•    Domain Sponsor
•    Dotzup
•    Fabulous
•    Goldkey
•    iMonetize
•    NameDrive
•    Parked
•    ParkingDots
•    Parking Panel
•    RevenueDirect
•    Sedo
•    SmartName
•    TrafficZ
•    Traffic Valet

Your results will vary between parking companies due to a variety of factors including the advertising network used, fraud mechanisms, number of bidders on a particular keyword or keyphrase.

Differences Between Parking Companies

Let’s get one thing straight: not all parking companies are the same!

Yes, they pretty much get their ad feeds from the same popular ad networks. However, their rules about how you can lay out your pages, where you can place ads, whether, and the extent to which, you can add or modify page content, can vary widely. And that’s not to mention the differences in terms of payouts.

For example, some companies allow the home page of your domain to display a page that lists a number of topics (but not ads) and it’s only when a visitor clicks on a topic that they are taken to a page where ads may be viewed. In other words, making money with such companies requires a two‐step conversion. The visitor must click on a topic, and then on one of the ads before you generate any income. However, that does not necessarily mean that you should avoid working with such parking companies. In some cases, they may actually generate more conversions and income than another parking company that allows ads to be displayed on the home page of your domain. I’ve certainly experienced this with some of my domain names.

Parking Strategy

Don’t rely on just one parking company. Sign up for as many parking companies as you can and move your portfolio around to see what works best. Even if you have a highly converting domain, earning you a lot of money, don’t accept that this is as good as it can be. You never really know how “high is high” without trying lots of different things.

You really need to test, test, test in order to work out what works best.

Tips For Choosing A Parking Company

1.    Are they talked about in a positive light on popular domain forums?
2.    Do they have a track record of paying their customers on time?
3.    Do they have staff in industry forums that respond to posts?

Some of the more popular companies that answer “yes” to these questions include Parked, Sedo, Fabulous and NameDrive.

How To Monetize Domain Names

One of the most common questions I get is “Which monetization strategy should I choose?” The answer depends on (a) how much time and money you have and (b) the quality of your domain names.

If you have a high quality domain name, your options include:

1. Offering it for sale;

2. Doing nothing and letting it (or hoping that it will) appreciate in value;
and

3. Parking it in order to earn ongoing revenue, and maybe sell it later.

How To Make Money From Domain Names

Typical strategies used by domainers to make money include:

1. Buying a name and then “parking” it with a domain name parking company. Parking essentially means pointing the domain name to a third-party’s website which is owned and operated by the parking company. This website generally includes only one or two pages and displays content and advertising designed to appeal to visitors to that domain name. The parking company enables you to choose a keyword or keyphrase based on the likely traffic to the website and displays content and advertising based on that keyword or keyphrase. Depending on the parking company, you can choose between different layouts and graphics, and may be able to upload your own content. You make money by having visitors click on the advertisements on the site, and the parking company takes a cut (generally the majority!) of each payment per click.

2. Building a “content” website where you feature free content such as a blog or articles, and display advertisements and/or affiliate links. You make money every time a visitor clicks on such advertisements and/or buys through your affiliate links.

3. Building a product or service website where you aim to sell products and services to people who visit the website.

4. Parking the domain with (pointing it to) one of the domainer’s existing sites, which may be a content website or a product/service website.

5. Selling the domain name to someone else. This might be another domainer, broker or corporation.

Although each of the above can be lucrative strategies, most domainers generate income through parking their domains and, at some point, selling them. So much so that “domaining” is often interpreted as buying, parking and selling domains (rather than buying domains and building fully-fledged websites around them). Indeed, throughout this report I will generally refer to domaining only in the context of buying, parking and selling.

Why do domainers mainly focus on buying, parking and selling? Aren’t they likely to make more money per domain name if they build a fully-fledged site around it? The reason boils down to what is the optimum use of one’s skills, money, time and other resources. For example, building content and product/service websites involves a certain skill set – while the process of finding money-making domains requires a totally different skill set. To become an expert in finding the right domains, optimizing them for the purposes of parking, and selling them at a good price, you need considerable knowledge, skill and experience. That only comes with devoting as much time as possible to those activities. You just won’t develop that kind of expertise if you’re too busy creating websites, products and services. Likewise, by becoming an expert, you will inevitably discover that buying, parking and selling domains is the best – i.e. the most income generating – use of your time. You will simply make more money by doing more of these activities, than by spending some of your time on these activities and some of your time on other activities. In other words, if you work a 40 hour per week, you’ll make more money by spending those 40 hours analyzing, buying, parking and selling domains – than allocating some of that time to domaining and the remainder to building websites and creating products.

Of course, you may be able to achieve the best of both worlds if you partner with someone who builds and optimizes content websites or creates product/service websites around the domains you find. But you are still better off spending your time finding, analyzing, buying and working out the best strategy to monetize them, rather than doing else.

Now, although I’ve said that most high-earning domainers make their money by acquiring, parking and selling websites, they often park their domains and then may, or may not, choose to sell them.

Put it this way, even if you find a great domain name that could be worth thousands of dollars, you are often wise to park it – and generate a steady stream of income – than let it get de-listed by the major search engines (if it’s still ranking) or lose value while you try to find a buyer. Of course, there are some domains that may not make money from parking, in which case you have no choice but to wait.

However, even if your primary goal is to sell the domain, you may actually increase its value by parking and optimizing its revenue potential.

Nevertheless, in many cases you will simply make more money parking a domain than by selling it and trying to use the proceeds to find another domain to sell. It comes down to determining which strategy brings about the highest return on investment (ROI) over a given time frame. Traffic and Conversion Generating income – whether from a parked domain or your own website – is about getting the maximum volume of traffic, and having as much of that traffic as possible perform certain actions that make you money.

For parked domains and content sites (including “Adsense sites” which generate income by running ads from Google’s Adsense network), such actions are clicking on ads. For each click, you earn a certain amount of money. For content sites running affiliate offers, those actions are clicking on affiliate links and/or buying the product or service being offered. For product / service sites, the actions include people opting in to a mailing list and buying a product or service. Each instance of a visitor performing the desired action is a conversion.

Therefore, your aim, as a domainer, is to maximize your conversion rate – the percentage of traffic that performs the desired action. So, if you’re parking a given domain name, you want to increase the number of visitors who click on the ads displayed on your website.

While the volume of traffic and conversion rate are both important, what really matters is how much money you make. When it comes to parking, there are three (3) key variables: traffic, the pay-per-click amount or rate you receive and the conversion rate. As will be discussed below, one parking company may attract less traffic or offer lower pay-per-click rates, but still earn you more income than another, simply because it has a higher conversion rate.

Know Thy Traffic

You might be surprised to know that many domainers have no idea where their traffic comes from. If you’re aiming to monetize your domains via parking, you are well advised to find out! There are two main reasons for this:

1. The value of the domain name will vary not only based on how much traffic it receives, but also where that traffic comes from. For example, an expired domain that previously received a lot of traffic from search engines but has since been de‐listed will be worth much less than a domain that retains a search engine ranking. However, what about a domain name that barely ranks, if at all, but gets a lot of traffic from backward links might be worth the most…

2. Your entire monetization strategy – from whether or not to park the domain to how to optimize your home page – will vary according to your major traffic sources.

In particular, you need to consider the quality of the backward links to the domain name you’re considering buying. At a minimum, type the domain name into the major search engines and see what results come up. See if you can answer these questions about the backward links.

1. How many of these links are for sites that are “made for advertising”?

2. How many of these sites are “directories” (i.e. “link farms”) filled with links that nobody is likely to click on?

3. How many of these links result from someone (or more likely, a robot) posting links in blogs (i.e. “blog spam”)?

4. If the domain gets de‐listed from a major search engine, or deleted from a given directory, how much traffic will it continue to receive?

So before you bid on a domain at an auction or buy from someone in a forum… make sure you do your due diligence on what you’re buying!

Focus On a Niche

If you’ve been involved in Internet marketing, or business in general, you’ll have heard the advice to focus on a “niche”, rather than try to appeal to a broadly defined market or industry.

Well, the same holds true for domainers. Rather than buy just any domain that looks like it could make you money, I suggest you focus on a single niche. This could be, for example, all domains related “real estate” that end in a specific toplevel domain (TLD) such as .com, .net or .org.

Once you’ve chosen a niche, get to know it inside out. Buy domains relevant to this niche and try them out with different parking companies. Experiment with different parking layouts. Run different affiliate ads. In short, keep testing new ideas as you work out what combination of elements generates the highest overall revenue. When you’ve optimized the domain names in this niche, you can then diversify and do the same in another niche.

Why adopt a niche strategy? Here are a few reasons…
1. Firstly, there’ll be enough work involved in trying to optimize the domain names within one niche, let alone trying to become an expert in various other niches. And the fact is, if you don’t optimize your domain names you’ll be leaving cash on the table. By focusing, you learn how to be the master of extracting every last cent out of a particular niche, rather than being a “jack of all niches, master of none.”

2. If or when you decide to cash out by selling all or some of your domain names, you’ll have built an impressive portfolio of related names that will be worth more together, than what they would be worth if you sold them individually. In general, the whole is worth more than the sum of its individual parts.

3. Following on from the second point, you are more likely to sell 100, 500 or 1,000 good domains in a particular niche, than one or two names across 100 niches.

4. While getting to know a particular niche, you’ll often find sub‐niches. For instance, domainers in the insurance sector may find opportunities in, say, “pet insurance”. It’s these sub‐niches that are often “under the radar”, have less competition, and can make you more money.