Domain name owners may see change in revenue this week.
Yahoo’s new click pricing algorithms kicked in mid-week in the United States, which will likely result in a small decrease in revenue for many domain name owners. Yahoo announced the change last month.
The new pricing will adjust pay-per-click prices based on the source’s quality of traffic. Industry sources tell Domain Name Wire that this change will affect long tail domain names across all keywords, whereas Yahoo’s previous traffic discounting mechanism only affected certain verticals and higher-traffic sources. Sources tell Domain Name Wire they expect revenue to decrease anywhere from 2%-12%, although smaller portfolios could see a greater change. Some domains may actually see a revenue boost if they deliver high quality traffic.
Yahoo has also released a new new Ad Delivery Report that will show the source of traffic. Combined with analytics tools, this report will show advertisers which traffic is converting for them and allow them to block domains that deliver low-performing traffic. This is similar to a tool already offered by rival Google.
Johnny says
One thing they seemingly don’t even measure in regards to traffic is foregin traffic from some countries……they just give a blanket payout of .01 cent for each click with no regard to quality.
That is what I am seeing from yesterday’s totals, which was the first day of the switch.
I really think everyone will see less income. Has there EVER been an update of any kind where anyone made more money? No.
Rick says
Of course its early so far, but my revenue increased. My TQ score is a 10 and has been a 10 for a long time. I think you will make more if your traffic is from quality generic domains but if your traffic is typos particularly trademark typos, then your revenue will go down and that seems appropriate to me. Perhaps once Microsoft comes fully on board with Yahoo that foreign traffic payouts may go up also.
Matt says
Rick, not sure what statistics you are looking on, but typos are one of the most converting types of domain names.
I’d argue that typos are more converting than many generics, especially one-word generics.
Rick says
@Matt – I’m not saying they don’t. Typos do convert well. I’m saying people who squat on a typo like ‘verzion.com’ should not be paid as much for a click as someone who receives a similiarly paying click on the domain ‘wirelessphones.com’. Although you will obviously get a lot of traffic on the TM typo and probably lots of clicks, the TM typo is low quality, a trick if you will, to get the visitor to click. Whereas the generic domain is high quality traffic; someone is genuinely looking for a product or service and moreover has not been deceived by a typo. I’m sure there is more than this to yahoo’s calculation of the TQ but I’m sure this at least a part of it. In reality, we don’t know anything about how the TQ is calculated and even Parked.com can’t tell us. This I don’t like because it is all so arbitrary. They could set it to anything they like and we can’t do anything about it at all that I am aware of.
Matt says
I get your point. Domain owners with natural type-in domain names should technically be getting paid the most.
As a matter of fact, domain parking should really only consist of generic type-in traffic.
But, the reality is far from that. After a lot of research, 90%+ of all parking revenue is from typos, coming from the top 20% of the parked domain names.
I doubt Yahoo is smart enough to do what you suggested. They are really not that good at what they do. Not to mention, it would make no sense to smart price domain names that are bringing in perfect conversions, even if they are typos. Because if they’d do this, they’d be losing a lot of money for absolutely no reason.
TQ should be calculated based solely on history of conversions. Like I mentioned – Yahoo not the brightest company around – I believe they also weigh in CTR into the equation, and that just makes absolutely no sense. They just like to see a good CTR. They are not tech savy.
Yahoo is just a failure. And I am sure the Bing deal will help them out a bit in the short term.
Without typos, the domain industry is dead. I’ve been saying this for a long time. The reason is because you are left with long-tail and expired domains, and that would lower overall conversions for each company. Revenue would dip about 80-90% overall, and the domain industry would have 1/10th the power it has now.
Parking companies should have long-term goal of monetizing generics. Short term goal of typos is a good idea to build up their position.
Johnny says
Matt…..long tail converts better than short tail. That’s well known.
I’m not so sure where you got your 90% figure.
Also, TM typos convert better than generic domain typos…..not sure where you got that idea either. When people go to TM typos they are already “sold” b/c of the “brand”, whereas a domain like CarParts.com is not a brand, so it takes more convincing. FordParts.com is going to convert better than CarParts.com. There are caveats for sure, but you get the point.
According to a Microsoft study:
– 72% of total parking rev comes from typos
– 10% of parked domains earn 90% of the income
– 2.8 Billion is the size of the parking revenue
Donny says
I can say that out of our top 100 revenue generators 0 are typos. I even consider something a typo if it’s sex.cm for example.
Most typo domains get a lot of traffic but don’t make much revenue.
TQ scores have always been based on conversion of clicks to conversions for the advertisers. I’ve read the patent and it’s actually a pretty solid concept.
The new additions, which didn’t take affect until last night should help everybody overall. But I think the biggest thing is that initially it should bring a better ROI for the advertisers, which should in Yahoo’s eyes bring in more advertisers, which should in theory bring in more money for all of us.
If I knew how the TQ scores were calculated exactly, I would make sure that everybody knew how to have a 10. But unfortunately it’s a blackbox in many ways except for the patent that was filed by yahoo.
In my opinion without typos, parking companies would still be generating about 95% of their revenue today or at least the one I know very well.
Matt says
Also, it would be impossible for people with TQ 10 to get more than they already are.
It is in all partner contracts and terms. If the partners were not getting the full bid amount for a TQ 10 right at this point, it’d open up to very big law suits.
I don’t think them subsituting revenue lost on TQ 5 for people with TQ 10 is possible either. That doesn’t make any business sense. I just don’t see that being possible logically, but of course Yahoo does do weird things at times.
Johnny says
Will someone just start an advertising company for type in domains? See how many companys come in and bid for advertising space on those. I’ll bet it’s a $Billion dollar revenue stream if someone will step up and do it. Not to mention, Yahoo and Google are taking more than their fair share from domainers. It’s time for a “domain only” advertising company. Any takers?
Matt says
Johnny,
That wouldn’t be too possible. Google has I believe over 1 million advertisers. It is hard to sign up a few directly, let a lone 1 million of them and then convince them that they should pay more for domain parking than search.
Not to mention, we already have someone that has started this on a different concept called Sendori. And while it is a great idea, it really is hard to find mass advertisers that will out perform PPC.
The reason you’re not really going to see it happen is because the PPC model was evolved around search. Therefore, only the leaders in search will offer the best coverage for PPC. Unless a domainer comes up with the next Google and is extra generous to his domaining community, it will not really happen. We can only bet on Sendori and concepts like that, but once again, that is already in the hands of Ask. Google may release this type of program in the future as well.
Now, I don’t know about Donny’s company. I don’t investigate Donny’s clients. But I did run my own statistics on DomainSponsor and Sedo by pulling all domain names in the zone files resolving to these companys (at least the .com zone).
Out of these domains, I used my own tools to predict traffic/revenue on all domain names (same tools that I use to predict revenue when buying domain names – and it is quite accurate since it is based on overture/msn data).
Now based on this, I did a scan of the top 1 million Alexa sites, removed any domain names that are generic and in the dictionary from this list of Alexa sites. I created all typo variations of these sites and ran it across all domain names pointing to DS / Sedo.
The end result is that well over 80% of all domain revenue is typos.
Not sure on Donny’s opinions, but these are my hard facts.
Matt
Matt says
Forgot to mention in last post. ^^ Will publish a report one day if anyone is interested.
Matt says
To prove my point, I looked back at my Data for DomainSponsor, here are some of the TOP domains parked with them:
domain_name | overture_score | nameserver_1
———————————-+—————-+———————-
2uclub.net | 7888 | ns1.dsredirection.com
520find.com | 6956 | ns1.dsredirection.com
gamesfever.com | 2246 | ns1.dsredirection.com
friedster.com | 1910 | ns1.dsredirection.com
frindster.com | 1881 | ns1.dsredirection.com
6arb.com | 1868 | ns1.dsredirection.com
fox2.com | 1822 | ns1.dsredirection.com
69clix.com | 1468 | ns1.dsredirection.com
friendsterlayout.com | 1415 | ns1.dsredirection.com
2express.com | 1344 | ns1.dsredirection.com
freeonline.com | 1335 | ns1.dsredirection.com
findonline.com | 1198 | ns1.dsredirection.com
flashyourack.com | 1158 | ns1.dsredirection.com
132hbb.com | 1155 | ns1.dsredirection.com
6rab.com | 1153 | ns1.dsredirection.com
freehaven.com | 1092 | ns1.dsredirection.com
fiendster.com | 1041 | ns1.dsredirection.com
friendstar.com | 915 | ns1.dsredirection.com
gamestopfeedback.com | 908 | ns1.dsredirection.com
fiththird.com | 872 | ns1.dsredirection.com
funbrin.com | 864 | ns1.dsredirection.com
funnyjunck.com | 838 | ns1.dsredirection.com
123music.com | 783 | ns1.dsredirection.com
fixyourforeclosure.com | 778 | ns1.dsredirection.com
freepychicreadings.com | 752 | ns1.dsredirection.com
142hbb.com | 748 | ns1.dsredirection.com
6rp.com | 738 | ns1.dsredirection.com
friendters.com | 732 | ns1.dsredirection.com
freeewebs.com | 710 | ns1.dsredirection.com
134hbb.com | 706 | ns1.dsredirection.com
flavoroflove.com | 692 | ns1.dsredirection.com
32venture.com | 686 | ns1.dsredirection.com
I’m doing report on Parked next. 🙂
Matt says
Just wanted to say, I have no reason not to believe you Donny. Just going to do a report on everyone for my own informational purposes.
I am sure that DS has more typos than the average company due to Search feed which means they don’t have as many typos blocked I believe.
Unasi says
In my tangible biz I regged typos of all my competitors and redirect it to my page – and GOSH half of this traffic is turning into orders ! Usually is like “Hey I am looking for abc123” – then we google what that is and say “Yeah our new number is aaa111”
Greg says
Didn’t need to see Matt’s data to know he was right. I don’t understand why Donny says that 95% of revenue would be left without typos.
“Most typo domains get a lot of traffic but don’t make much revenue.”
Anyone who works for a parking company knows that isn’t true. This isn’t the real Donny talking. Donny can’t possibly believe that. All the Parked.com customers I know park mostly typos there. Sedo is where people park generics.
Andrew Allemann says
“All the Parked.com customers I know park mostly typos there. Sedo is where people park generics.”
Greg – I assume you’re being facetious?
Cindy says
I hearing of drops of 30% to 80% for domainers with TQ of 8 or higher. So much for 12% drops.
Andrew Allemann says
Cindy – nah. Probably just circumstancial daily changes.
Johnny B says
Matt,
I looked at sendori a few months ago and they now have 138,000 advertisers. That’s not too shabby for a fairly new ad feed provider. I see that Ask.com acquired them dilluting rev to search PPC. Ask will follow suit w/the others I’m afraid and de-value domain PPC value…. Guess my search continues…. I’d like to Frank Schilling start the ad feed. Even more…I’d like to see the look on Yahoo’s face if that happened!
Matt says
Johnny,
I am very highly doubting 138,000 advertiers haha. That’s probably how much they aggregate, from other providers.
So if they get a feed from let’s say Microsoft, and Microsoft has 50,000 advertisers, then they count that as 50,000 advertisers.
I don’t think they have too many direct advertisers.
That’d be a lot of work. I think the biggest second tier provider doesn’t even have 100,000, and that’s active and non-active combined.
Matt