Fairwinds updates faulty report, but it’s still laughable.
Last month FairWinds Partners, the group behind CADNA, released a report suggesting that typosquatting costs the 250 most visited web sites $327 million a year. I immediately smelled something fishy about the biggest underlying assumption in the report: the average cost-per-click on ads on typosquatted domains was pegged at a lofty $2.74 per click.
The report referenced a VeriSign report for its CPC value. There was one problem, though: the VeriSign report didn’t mention anything about a $2.74 CPC value. (Representatives of FairWinds did not respond to my initial inquiry about the VeriSign reference.)
Today FairWinds updated its report with a new value of $2.03 a click. It’s still a joke.
Here are some recent average CPC prices for top verticals in search:
Automotive: 51 cents
Retail: 50 cents
Finance: $1.99
Travel: 60 cents
Keep in mind that the top typosquatted sites, according to FairWinds, include MySpace, YouTube, Facebook, and Google. Anyone at all versed in domain parking knows that traffic intended for these sites converts for pennies at best.
I talked to a major PPC advertising firm after reviewing FairWinds Partners’ initial report, and they said the price assumption was absolutely ridiculous.
So how did FairWinds come up with its new $2.03 CPC? It plugged in the term of each domain into the Google Adwords Traffic Estimator. It’s a convenient approach for FairWinds given the junk Google spews back.
For example, type in “You Tube” and Google estimates an average $1.59 CPC. Now go to Google and type in “You Tube” and you’ll only see YouTube’s official ad running. In reality, a typo of YouTube would show ads for lessor terms and pay out pennies, if that.
The Google estimator also shows only prices for the top positions and doesn’t take into consideration smart pricing and content network pricing.
Does typosquatting cost companies? Sure. But suggesting that each click on a typo of these domains is equal to $2.03 in advertising costs is ridiculous.
jeff says
so whats the purpose of the google tool if it spews out crap… especially with “You tube” keyword..
Jon Kimball says
Andrew, what do you think would be a more fair CPC estimate? I’m thinking something more like 20-25 cents.
Andrew Allemann says
@ Jon Kimball – It’s hard to say since I don’t have first hand experience. Perhaps 20-25 cents on many domains, but something like a typo of Google.com can’t possibly get more than a penny or two per click. If someone w/ firsthand experience wants to comment, please do so.
Tom / Domaining365 says
I remember reading that article and thinking those #s were crazy. Either that or I was completely missing the point with my CPC if the average CPC for typos was almost $3. Glad someone with more patience than me decided to chase them down. On the flip side, that report is chock full of stats that make great selling points to a prospective buyers of keyword domains.
I’m just saying…
Jon Kimball says
I don’t have firsthand experience either but I imagine that it varies significantly from domain to domain. In the case of a Google typo, I agree it would be pennies. While misdirected Google users COULD type in any query like “Home Loans”… the CPC average would definitely be affected by the sheer weight of garbage queries like “Hannah Montana is teh awesome” which pay nothing.
Tim says
Pennies at best.