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.

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.

Sedo

Sedo (Search Engine for Domain Offers) has more than 500,000 members with domains in 21 languages. Its CEO, Tim Schumacher heads up 160 employees in 25 countries.

Corporate

Sedo is a subsidiary company of the AdLINK Internet Media AG under the United Internet AG.

History

Sedo was founded in 1999 in Cologne, Germany by university students Tim Schumacher, Marius Würzner, Ulrich Priesner and Ulrich Essmann.

Parking

Sedo provides services for domain owners such as listing domains for sale through straight sales, auctions, and parking. An account is free to park your domains and there are fees if you want to sell your domains.

Benefits of using Sedo include:

•    Negotiating directly with people who visit your parking page and are interested in purchasing your domain.
•    Revenue through their pay per click program,
•    Choose one keyword for each parked domain (reviewed and approved by Sedo)
•    Commission based affiliate program.

There is no minimum requirement to join Sedo and take advantage of the services offered by the company. The interface is user friendly and easy to use. You can receive payment through paypal, check, or a wire transfer into an account you have setup.

Sedo Pro

Sedo Pro is a professional parking service for serious domainers. It’s based on an application process and analysis of your domain name portfolio with regard to the quality of traffic.

You must “have a minimum of 200 domains or $200/ month in domain parking earnings in order to join”. In order to apply you will need a Sedo Pro referral code. If you would like a Sedo Pro referral code then please email support with a subject of “Sedo Pro Code” and we will email you one.

Fabulous

Fabulous provides domain monetization and management services. It owns more than 500,000 domain names itself and manages over 600,000 third party domain names. Through its parent company, it utilizes its own distribution network (Roar).

Corporate

Fabulous is currently owned by the Photon Group Limited after acquiring and delisting Dark Blue Sea Limited (ASX Code: DBS). The company is also an ICANN Accredited Registrar.

History

Dark Blue Sea is described as a “direct navigation” company. It was founded in 1999 by Dean Shannon. In 2002, Dark Blue Sea:

a) Acquired a non-operational ICANN domain name registrar and renamed it Fabulous.com.
b) Started to build its domain portfolio.
c) Backed into a listed public company.
d) Dan Warner joined as COO.

Parking

Fabulous is very well known, with its management regularly attending conferences and actively responding to posts on industry forums.

Advantages:

a) Excellent customer service.
b) Optimization done by Fabulous often earns higher revenue.
c) A wide variety of images.

Domains that have the best RPM’s include casino, adult, pharmaceutical, and gambling categories. People with strong portfolios including these domains will show a larger income from revenue. Payments are made on the 10th of each (following) month.

The number of options at Fabulous might be overwhelming to new users. However, once you get the hang on it, its a very powerful platform. Of particular note are the user visitor statistics and spider activity.

You must have a minimum of 50 domains when you use Fabulous. However, they do review smaller portfolios for quality traffic.

Parking

Domain name parking works on the basis that your domain name already receives or is likely to receive traffic. It’s generally only appropriate for “expired” domains – previously used domains that have not been renewed by the previous owners. It may also be appropriate for unregistered domain names that are likely to attract a significant level of “type it in” traffic – a significant number of people typing the domain name into their browser.

Let’s say, however, that you have an expired domain name that receives a steady stream of traffic. (How do you know that the domain receives traffic? There are a number of ways of estimating whether – and the extent to which – a domain name receives traffic. At a minimum you can make an educated guess based on

(a) where the name ranks in the major search engines, and (b) the number and quality of backward links.

So you decide to park the domain with a parking company. You submit your domain name and are asked to select a keyword or keyphrase. This keyword or keyphrase should generally relate to what the domain name was previously used for, and what visitors to the site are expecting to see. (Nothing will turn off that traffic – and destroy your income potential – faster, than significantly changing the nature of the site!)

If, for instance, you have a domain name related to car insurance, you might choose “car insurance” as your keyphrase. The parking company will then display content and advertisements related to car insurance on the website. Parking companies obtain these advertisements through their arrangements with major advertising networks, like those operated by Google and Yahoo. When a visitor clicks on a given advertisement, you will receive a percentage of the pay‐per‐click revenue.

There are key advantages to parking a domain:

•    You don’t have to create any html pages or add any code – the parking company does it all for you;

•    You can quickly change keywords to optimize your site (much more difficult when you do it yourself);

•    Parking companies have pre‐made graphics and layouts you can use;

•    There are various automated systems to track statistics, conversion rates, and how much money you’re making – so you don’t need to buy or implement your own;

•    You can get a site up and running, and earning you money, much more quickly than if you had to wait by creating – or even hiring someone to create – your own site. In the time you spend creating or overseeing the creation of your own site… you could be analyzing, buying, monetizing and selling more domains!

For all of the above reasons, most domainers will park their names. It’s quick, easy and often a “no‐brainer”. If you don’t have the time to develop a web site… or just want something up there making money until you’re able to sell it… park it. After all, at the end of the parking company’s billing period (usually a month), you’ll receive a wire transfer into your bank account or money deposited into your PayPal account. Not bad, eh? Buy a domain, park it, do nothing and get paid money! However, there are two major disadvantages to parking:

•    You could be leaving a lot of money on the table. If you are making money via parking… chances are the parking company is taking most of it. Which leads us to the second disadvantage…

•    Most parking companies don’t disclose how much money they make from you! In other words, you don’t even know how much money they’re making from the advertising they display on your website… or what percentage of this you are getting. The parking company will just say, “We take a percentage”.

My “hit prediction” is that this will change. As parking itself becomes more competitive, the parking companies will start revealing how much they keep and how much they pay to domainers. In the meantime, never assume that you’re getting the best deal from any one parking company. Test the same domain name with different parking companies and find out for yourself which company makes you the most income. (Remember, it’s not just about how much money they pay per click, but the combination of how much traffic they get, how much of this they convert and how much they pay per click that determines your overall level of income.)

Also, although most domainers don’t spend a lot of time building websites, you may decide that this is the best monetization strategy for some domains. In this case, you might decide to build (or hire someone to build) a content website that displays affiliate offers and advertising directly from an advertising network. Now, when someone clicks on an ad or buys through your affiliate offers – you’ll keep all the cash.

If you are considering this option, just be sure to read the terms and conditions of the affiliate merchants and/or ad networks. Each one has different rules about how and where you can place their offers and advertising. It’s also critical to provide valuable content. Don’t just put up a website full of advertising. Provide valuable content that keeps visitors coming back for more (or at least entices them to click on your ads or affiliate links).

How Domainers Make Money

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.