Domain Parking Industry Faces A Shakeout

[Equalizer]

http://news.netcraft.com/archives/20..._shakeout.html
The business of advertising on parked domains is facing a shakeout that could dampen speculation in the domain name market. The domain advertising business, which is based on pay-per-click advertising from Google and Yahoo, has seen explosive growth this year. This week one of the industry's largest players, DomainSponsor, announced that it was shifting its payment model to combine pay-per-click and pay-per-sale ads.

[CashCowDomains]

With respect to CPA (Cost Per Action) it was interesting that the article mentions:

"It could also affect pricing in the secondary domain market, where prices are often supported by a name's potential to generate pay-per-click revenue."

In the near future, will domains be appraised based on a new CPA Valuation Methodology ?

[Equalizer]

In the near future, will domains be appraised based on a new CPA Valuation Methodology ?

it seems awful logical.

[Adam Dicker]

Anyone that didn't see this coming has been wearing blinders.

-=DCG=-

[CashCowDomains]

nothing blindsiding really (ie domain sponsor & cpa), however i am curious as to how much things will change with respect to domain name valuations shifting from ppc to cpa models etc as i mentioned above.

[Fearless]

CPA is nothing new. Net result for DS = even less market share.

[SLushie]

besides DS switching to CPA I really don't see a major switch in the immediate future with the rest of the industry. Although click fraud is and will always be an issue, the PPC companies - google etc - are still seeing increasing profits with PPC.

[krisblade]

I agree, nothing new. Actually I know very well that the objective of one of the new (if not newest) parking services was to combine the traditional ppc with pps/cpa (and I cant wait to see up and running, the idea is not new), something that we, as developers, know very well it helps to get the most from a domain name (but still not all of it).

Valuations (as model) of course will remain the same, having in mind that its always a formula based on revenue (ppc revenue, sales revenue, leads revenue), but now some parked domains may worth more, specially the ones with high conversion on sales, this "real value" (but still partial) will be finally revealed with these new parking services with more than just PPC on the landing pages.

Again, it only shows that development, is the key.

[mole]

Again, it only shows that development, is the key.

What happens if you have 33,333 domains?

[stuff]

What happens if you have 33,333 domains?

good question

[Equalizer]

Anyone that didn't see this coming has been wearing blinders.

-=DCG=-

or in denial.

[Adam Dicker]

If it really happens it will make easily targetable domains like birds.com or portablexbox.com more valuable and domains like hdfg.com les valuable unless you can determine what they are looking for to sell them.

This is also the best way for companies to totally eliminate clickfraud.

-=DCG=-

[namestrands]

Well I have to say that I am making more money per month on PPA with only 1% of my domains than I make in a whole month with PPC..

Pay Per Performance/Action is the way to go.. DomainSponsor, sedo and Fabulous are all part owned by Registrars and/or PPA programs.

2 of the BIG Affiliate programs are to launch RSS Advertiser Feeds for Domains.

The industry is changing for the better. Generic Domain Prices will see a huge value increase... while most of the other domains will now be in negative equity.

[mole]

Generic Domain Prices will see a huge value increase... while most of the other domains will now be in negative equity.

Which other domains will you say will now be in negative equity?

[namestrands]

Domain Names that cannot relate to any convertable revenue or have no Identifiable target market.. Typos will be phased out of PPC and PPA Programs as the advertisers put more pressure on the programs, the Programs are being targetted by the lawyers now to cut off the revenue source of the TypoSquatters, its cheaper than a UDRP.

However this is all at least 18 months away before any real impact will be noticed, unless something really changes in the PPC market... with some of the biggest mergers in the advertising/online media industry going on in 2006.. it is all just speculaltion at the moment.

[Olney]

I personally think it sucks that you can't even put links on your other sites to increase the backlinks to your parked sites.

Anyway I thought it wouldn't last everything chances...

[krisblade]

What happens if you have 33,333 domains?

Select the best ones, park the rest

[JMJ]

Along with this a whole new breed of fraudsters created. Utilizing your traffic to direct traffic to their site and not paying you for the sale. The advertisers want more from their advertising buck and the traffic providers want more bucks for their traffic. Where is the happy medium? The only answer is the medium themselves (as in the PPC providers) combating the fraudsters because there will always be those who wish to cheat any system.

The PPC providers want to cater to the advertisers because of their demands. What if the traffic goes away? Where do those advertisers go then? What will become of the providers?

[Focus]

I have been saying this since I joined the forum...eventually progression to CPA is inevitable...whether we like it or not, we don't write the checks..


Chris

[namestrands]

Where is the happy medium? ?

only 6% of the advertising dollar goes on internet advertising. The industry needs regulation. Take a parking program for example.. its a third party to a third party.. this is were the click fraud problem occurs.. too many variables. Google and Yahoo need there own Parking Programs that is open to all.. they have infinite resources to monitor and develop detection systems. If a PPC program can get away with Click Fraud it will regardless of its size.

Let the SEDOs DomainSponsors and Fabulous's of the world use there PPA programs and sales platforms to generate its revenue. Leave the PPC to the Search Engine Companies. Google are cornering the market, they are about to launch there own payment gateway they are in a great position to launch a domain parking program for all.. CUT OUT THE MIDDLE MIDDLE MAN......