Domain name auctions have never been, and will never be, for end users.
I’ve read a lot of complaints over the past week about how late the domain auction houses have released their auction lists for this week’s TRAFFIC show in NYC. That’s a fair complaint. Domain lists should be released weeks, not days, before an auction.
But the main complaint I hear is that by releasing the lists so late, it makes it impossible to market the domains to end users. This is true, but even if the list was released months in advance I don’t think that would change things.
Look, we all want end users to buy our domains. Getting their attention is difficult. Getting their attention and then asking them to participate in an auction at a specified time with specific rules and compete against many other people is downright crazy.
It happens every once in a while. The Cowboys bid for Cowboys.com (but we all know how that ended up). It won’t happen often, at least not with big companies. Acquiring a valuable domain name is a lengthy, signature-laden process for Fortune 500 companies. They also have bigger fish to fry. And don’t think that one of these companies would let its employees bid in an online auction if there are adult domains in the mix; their access to the site will be blocked.
This isn’t limited to domain names. If you’ve ever attended a patent auction, you’ll notice that it’s the end users and other investors selling the patents and only investors buying them.
Aftermarket.com realizes this, and it’s one of the things it kept in mind for its auction this week. Domains must be priced so that investors can expect to flip the domains in the future. They aren’t priced for end-users.
Live domain auctions remain one of the best ways to sell domain names. But don’t expect utopia. If you want to sell domains to end users, pick up the phone and start dialing.
Brad says
Couldn’t agree more, Andrew.
If you want to reach end-users with your domains, pick up the phone and engage in the often lengthy process of helping the end-user understand the actual or potential value of the domain. That is certainly not something that fits the context of a domain auction, where auction houses are looking to target those ready to invest. Just as an art auction is not the proper venue for attempting to sell art to those who don’t understand its monetary value, neither is a domain auction appropriate for a) convincing those unfamiliar with the industry of a domain’s value and, supposing that can be accomplished, b) getting them to purchase a domain.
If the complaints were redirected at the efforts of the auction houses to publicize the results of the auction, they would be more poignant since actual sales figures can do a lot to help educate the public on the value of good domains.
GPS says
Hah, you speak the truth! Sad but true. Hopefully will be different in the future.
The exception that I see is where some domainers are also developers, and therefore quasi-end users. I expect some of the product (lcd televisions, for example) and geo names to sell at the auction and be built out in the next few months.
Mike Maddaloni - The Hot Iron says
When you refer to end-users, do you mean those who only think a domain name should cost at the most $35?
There is a tier of businesses, entrepreneurs and individuals who understand the value of a domain name. They either pursue the domain name individually or engage with a consultant to do so, as it is a process to find a good and negotiate a purchase.
In a tough economy – or any economy – anyone should be embracing any prospective customer.
mp/m
David J Castello says
There’s an old saying that if you want to catch the big fish you don’t fish in a puddle.
My biggest complaint with all domain auctions is that their advance marketing campaigns are incestuous at best. In other words, these auctions are mostly promoted to other domainers. On the other hand, professional investors and speculators (the guys with real money) know nothing about domain names except what they’ve heard during the 2000 dotCom bust or when they come across a story like Sex.com.
There are three things we all know for sure:
1) Domain names have probably the best buy-to-sale profit margins on the planet.
2) The public knows very little about it.
3) These auction houses need to advertise outside of our industry to people who traditionally invest puy their money in gold, stocks and real estate.
Andrew says
David – wouldn’t you say that selling these professional investors on domains would take even more than a one month notice of domains in an auction? I guess I could see a broker buying on behalf of these professional investors, but they’re part of the same crowd that’s getting marketed to already.
Brad says
David,
On point 3, this begs the question insofar as it presupposes some knowledge (at least enough to act on in the auction, which is not a little) on the part of those non-domainer investors being targeted. So the argument amounts to asking the auction houses to advertise to those who would not likely understand the advertisment’s proposition in the first place (as your point 2 suggests).
It comes back to educating the public and who bears the responsibility for doing so. The auction houses themselves? Perhaps, and it probably wouldn’t hurt their bottom line. But how would they go about getting the job done? Company blogs? Seminars? Educational press releases?
Andrew says
We talk about “educating the public” a lot. Has anyone stopped to ask “if domain names were such as great opportunity, wouldn’t people get it already”.
Fair question, isn’t it? Or is everyone else just an idiot?
Brad says
It’s a very fair question, but I think it should be asked in the context of several qualifiers: e.g. the nascency of the industry; understanding about how search engines’ ranking systems work; domains and search behavior; etc.
Domainer says
HELP WANTED: Domain industry seeks good brokers. Must be willing to “Actively Market” good mid-level to upper-level domain names to the business community (also known as end users).
— You might Just be a domainer IF —
* You invest in domains but you don’t want to be a broker.
* You invest in domains but you don’t want to be a developer.
* Your current broker or auction house doesn’t actively market your domains.
All kidding aside, the popular brokers and auction houses probably have more than enough of the top dollar premium/premier domians to keep their active-marketing guys busy.
What the industry really needs are some good brokers who specialize in selling domains within a price range that small to mid-size businesses would more readily consider. Perhaps a price range of $2,500 to $25,000.
I am sure there must be some flaw in that thinking. Otherwise, those brokers would probably already exist.
Andrew says
Domainer – the problem with brokering domains that sell for $2500 to $25000 is that there’s little commission.
I do recommend listing domains in this price range on Afternic’s extended promo. They won’t fly off the shelf, but it’s the best you can do to get them in front of buyers.
Susan Clark says
Have you ever thought about press releases with PR follow up… in order to get press coverage? This would be one way to bring information about domain names to end users and to present domainers/domaining with a positive spin. And by the way I specialize in PR and web content for tech companies.
Kevin Jackson says
If the domain industry is going to grow and move forward, we need fresh investments. Now is a good time to seek the attention of Wall Street and show them a real alternative to the financial markets.
Companies don’t grow by advertising to the same population year on year. They simply seek out new markets.
Getting the attention of end users is hard work, but we will have to overcome this challenge, if we are serious about keeping a viable industry or domain aftermarket.
Just how much money do current domainers have to go around? We need fresh blood.
Robert Haastrup-Timmi says
As you can see Andrew, a lot of people here disagree with you!
The fact is, there is so much cronyism in the domain Auction market and its not even funny!
I read several comments on Domain Tools Blog regarding their Aftermarket.com list and people were deeply un-impressed. In fact, one guy pointed out that at least 5 of those names belonged to just one person, after he did a whois check!
With all due respect Andrew, you may be un-knowingly fanning the flames of a massive domain bubble that will ultimately burst!…and whatever domainer/s ends up holding the parcel, will then have nowhere to offload domains, simply because of the poorly excuse that end consumers were too difficult to reach or were not interested. I personally don’t care what anyone thinks, but I can tell you, this domain market as it currently stands is a mugs game and I like lots of other, have facts to prove the ambiguities. Like a lot of the people on this thread has said, the domain auctioneers actually have a responsibility to start marketing directly to the end user market in some orderly fashion. Even a parochial press release as Susan mentioned will raise awareness over time.
Sooner or later, a more sophisticated player will enter this market, hopefully Google if it wasn’t anti-competitive and that will toast all this parochial thinking.
In the absence of that happening, be very afraid indeed…this is not a real industry, because it has no foundation!
Andrew says
Robert, the point is that even if you educate end users, they’re going to start buying more through non-auction channels, not domain auctions.
Paul Rubillo says
Andrew, great point. I decided to forego the auctions and instead will be advertising my copies.com sale off of my dividend.com site. We have just put the page together and will hopefully spread the word to the thousands of investors that visit dividend.com on a daily basis. It’s a different approach, so let’s see what happens. We are even considering a finder’s fee to really spread the word.
Robert Haastrup-Timmi says
Andrew, if they start buying through non-auction channels, that will be good for everyone including themselves!!
Lets address this prudently Andrew, because you actually have a lot of influence in this space that could add tremendous value.
I have bought Art from both Sotheby’s and Christies and I am not an art dealer, I bought because I have a passion and I bought for long term investment value. I know for certain that is the case all over the world with lots of art buyers. Anyone can obtain a Sotheby’s or Christies art catalogue many weeks in advance, not just Art Dealers. Also, I believe corporate art buyers have relationships with art dealers who bid on their behalf, or they have reps in their own firms who do the bidding. Everyone who cares participates in art auctions, because the marketing is universal and you actually see their ads in newspapers. By the way, Damian Hirst just sold over 100 million pounds of art, only 2 weeks ago at Sotheby’s and he deliberately left out art dealers and galleries to go directly to end-collectors!
Why is our industry a massive bubble waiting to burst? well, I did an estimation of how many domains were sold and recorded on name bio a few months ago and the total was a little over 20,000 domains over a period of 4 years or so. Now compare that to 11 million domains outstanding on Sedo.com alone! Something is terribly wrong and I simply do not believe this style of domaining is sustainable. It will eventually burst like Lehmans and a lot of big domainers will loose everything because there simply is no secondary market, due to our own failure to create universal awareness to the end business user.
So Andrew, use your influence to catalyse a very serious debate on how this should come about, everyone will win once the average business user starts buying…right now it’s very dangerous child’s play with no hedge and time is running out!
Johnny says
RE: Robert Haastrup-Timmi points.
The top 50K-100K .com domains should really only be marketed to end users and not domainers. Selling them to domainers is like pricing ancients gold objects based on the weight of gold.
Then the next half-mil – mil will also always have traffic and value.
The rest may not have any value in the long run.
Jay says
Hi David C.-
Just wondering if you still hold the opinion NOT to attempt to sell to end users for fear of UDRP problems.
I ask this now because A. I respect your opinion and B. there seems to be more activity in domainer circles to seek out, solicit and actually have success selling to end users.
Your thoughts….
Thanks,
Jay
Stephen Douglas says
Ho hum… a discussion about incestous domain selling within our community… I started it back in 2004, along with many other domainers.
I wanted to start a movement where all domainers demanded that Parking services included a link at the bottom of their landing pages that led to a comprehensive, open website collaboration of simple-to-understand domain value education for END USERS. In other words, millions of pages with a link to a website educating consumers, businessmen, and marketing executives on why a domain name is valuable.
It’s not that hard of a project to complete. It just takes enough domainers who WANT real returns on their domain sales to demand this from their parking services.
Beyond that, auction producers have to ADVERTISE at least 30 days out by internet news releases or other means to at least REACH potential endusers. As far as I know, very few of the auction producers have done this. This is basic “Sales 101” – but they don’t, because they don’t want to invest money in selling the domains they want you to buy.
But the REAL solution is for auction producers to CATEGORIZE their domain auctions, selecting only those domains that appeal to one specific industry. The auction producers, along with the domain sellers, can contact the corresponding industry that matches the domain relevance of the auction. Only domains that match that industry will be offered in the auction. PINPOINT MARKETING.
Result? The domain auction producers and domain sellers pound the specific industry dedicated to their domain relevance, who then in turn contact their ad agencies and marketing directors to “research it a bit more”, and with about 50 examples of success stories on that specific “domain values” non-profit website, thousands of end users will learn about domain values and a percentage of them may become inspired to participate.
We just need to use our collective marketing intelligence, people. Now I just gave away my ideas on AA’s website. Well, more people read it than my blog, so I guess it’s okay. If you like my ideas, come read my blog once in a while: http://www.successclick.com (sorry Andy, but it’s a gimme)
We domainers are such a loose-knit crowd we lose a lot of time and money by not joining forces and promoting our cause. This is one of the reasons I joined the ICA. Hopefully, the ICA can be the website that puts up a comprehensive webpage/s that explains why domains are valuable, and how to buy aftermarket domains.
I repeat this same mantra every year. Ask Rick S. if he and I didn’t have a deep discussion about this in 2006. However, nothing was done and I count myself as culpable as anyone.
“Come on, people now, smile on your brother, everybody get together and promote our domains right now, right now… right now….” (apologies to the Youngbloods “Get Together”)
Andrew says
Jay – if I may answer on behalf of David, I don’t think he ever suggested not selling to end users. He only suggested not selling something they may view as a trademark.
If this is wrong, feel free to chime in David.
Mickie Kennedy says
Wow, this column has generated a lot of comments. Auctions are hard for end users. Private and public companies don’t like to feel as if their hand is being forced. When I tried to sell a company and domain at TRAFFIC Auction, we marketed to several companies offline. They were all interested. None registered for auction. They responded that their board or some other excuse kept them from participating in a public auction. Lame excuse. After auction failed to meet reserve, the offers came in. While a couple were within reserve range (very close), I decided to keep and build the business. I just don’t see end users being a presence at domain auctions at domain conferences … at least for now.