Why Domain Revenue is Falling

**hiOsilver** · 12-24-2007, 08:52 PM

I first got involved with Pay Per Click as an advertiser at GoTo.com (around 2000), which later changed its name to Overture, which is now Yahoo Search Marketing. Later, as a domain owner, I was really happy to be able to be on the income side of PPC, which ultimately led to my website PPCIncome.com. I have not posted on DNForum for a while (just too busy), but I wanted to start a thread based on a theory that I have about why parking revenue is down so much this year (my revenue is down around 1/3).

I have used both Google-based (DomainSponsor, Fabulous, sedo) and Yahoo-based (TrafficZ, SmartName, Dotzup) parking services, and they are all down this year. I think that it comes down to Google and Yahoo figuring out how to keep a larger share of the advertising revenue that is the source of our parking revenue.

Recently, I got a new advertising account with Yahoo Search and I had a very nice one-on-one support session from one of their staff. Like most advertisers, (I advertise my bottled water, hiOsilver ) I place a limit on how much I want to budget. Advertisers can budget by the day (X $/day) or by the month (Y $/month). The YS support staffer showed me around the upgraded YS site and Yahoo has made lots of improvements, some of which were oriented towards making their service more like Googles advertising service. However, one thing, and this is key, really struck me: advertisers can now decide on a different bid amount for content pages (which includes domain parking) and for search pages.

On content pages, Yahoo (and Google) has to share the ad revenue with the content owner. In the case of domain parking, the content owner is usually a parking service, so domainers receive part of a 3-way split. On Yahoo search pages, Yahoo receives 100% of the revenue. So, if you are Yahoo and you want to receive more of the advertising dollars, and assume that most advertisers are reaching their budgets, then you should encourage advertisers to bid more on search and less on content.

Well, after setting up my Yahoo search to pay up to $.25 per click for search, my Yahoo support person encouraged me to bid $.10 for content ads. Of course, with all of the negative publicity about click fraud, and with there being more likelihood of click fraud on content ads than on search ads, this seems like a reasonable strategy for most advertisers: Bid less for content ads. For Yahoo, it is almost certain to boost revenue and profits, and heaven knows, they have lots of incentive to do that for themselves.

What can the parking companies (who also are hurt by the scenario I have drawn) and domainers do to combat this? Well, this is already a long post, and I will post in the future on some ideas that I have.

Happy Holidays to All.

**CyrusL** · 12-24-2007, 09:33 PM

Originally Posted by hiOsilver

Well, after setting up my Yahoo search to pay up to $.25 per click for search, my Yahoo support person encouraged me to bid $.10 for content ads. Of course, with all of the negative publicity about click fraud, and with there being more likelihood of click fraud on content ads than on search ads, this seems like a reasonable strategy for most advertisers: Bid less for content ads.

This is exactly logical for the advertiser. As a big time advertiser, I can tell you there is nothing more than an efficient market taking place in PPC bids. Yahoo generally does a poor job of policing click fraud and provides little transparency into publisher landing pages.

When I am able to target the exact domains I want to advertise on, and your traffic doesn't get mixed in with garbage hitbot visitors, you'll see a big increase in your RPC. When that happens, I won't need to play the "averages" game on Yahoo, and pay $.10 for good & bad traffic. I'd rather pay $.20 for good traffic and $.00 for the garbage.

**H2FC** · 12-25-2007, 08:26 AM

Very interesting subject. I knew something was wrong with my ppc income but I didn't know this was going on. I'll be watching for more on this....thanks

**David G** · 12-25-2007, 01:20 PM

Excellent information Harold which I was not aware of. It makes sense that is going on and the end result. Thanks.

BTW, if the bids are lower on content pages vs search does that have a similar negative effect on Adsense and YPN payouts as it seems like it would?

**denny007** · 12-25-2007, 10:21 PM

advertisers can now decide on a different bid amount for content pages (which includes domain parking) and for search pages.

Afaik Google has parked domains not as content pages but "search partners".

**Acro** · 12-25-2007, 11:02 PM

At first I thought I was reading a post from 2003. Wait...we had that same conversation back then

Onto 2008...the ones that don't share the secret with the others, make the most $$$$

**denny007** · 12-25-2007, 11:05 PM

At first I thought I was reading a post from 2003. Wait...we had that same conversation back then

Join Date: Feb 2004

**Acro** · 12-25-2007, 11:07 PM

Originally Posted by denny007

Join Date: Feb 2004

I joined as "timechange" in 2002.

**CyrusL** · 12-25-2007, 11:32 PM

Originally Posted by denny007

Afaik Google has parked domains not as content pages but "search partners".

Nope. There are a few like this but the vast majority are represented as "domain pages" in the AdWords placement report. However, finding the exact breakdown on a domain-to-domain basis is much more obfuscated.

**simon johnson** · 12-26-2007, 04:56 PM

Yeah.... I can sympathize with Acroplex. I joined years ago - lurked for a long time and didn't use my account that often - it eventually got deleted - then I rejoined again!

Back to the point of this thread:

One of the interesting things for me is to see the estimated clicks & revenue from the parking company vs what you get after the advertiser verifies them. I have one particular name that gets repeat traffic (which the parking company allows) - but from time to time the *actual* amount I get paid is significantly lowered.

There is obviously a huge conflict in these companies....

"How do we increase (or at least maintain) our profits while not jeopardizing search quality AND giving our "partners" just enough $$$ to keep them happy".

It's a fine line.

**othellotech** · 12-27-2007, 01:24 PM

I would have though it was lot more to do with internet users becoming "immune" to the ever growing amount of spam/cr@p that is the www and them just closing the window rather than clicking through on the majority of PPC rubbish that seems to be all-pervading ...

**CyrusL** · 12-27-2007, 01:39 PM

Originally Posted by othellotech

I would have though it was lot more to do with internet users becoming "immune" to the ever growing amount of spam/cr@p that is the www and them just closing the window rather than clicking through on the majority of PPC rubbish that seems to be all-pervading ...

This would change click-through-rate but not revenue-per-click like the original post is discussing.

**simon** · 12-27-2007, 02:44 PM

nice post.
thanks for sharing

**hiOsilver** · 12-28-2007, 12:54 AM

Originally Posted by simon

nice post.
thanks for sharing

You are welcome.

Some additional information: Most of the drop in revenue shows up as a result of a drop in Revenue Per Click, from $.51 a year ago, down to $.36 now. My traffic is down about 10%, but there are several possible explanation for that. My click thru ratio (CTR) has remained steady around 22.5%. Obviously, the key factor is that the revenue is down per click.

**FuseFX** · 12-28-2007, 05:47 AM

STOP this racist talk. It will take me just one click to issue a ban. So you are totally advised not to mess-up this thread unless you want to take the chill-pill.

**denny007** · 12-28-2007, 05:53 AM

I think the click revenue is lower because offer increased more than demand. For example my ad budget is same for 2 years but it gets distributed to more pageviews...

I joined as "timechange" in 2002.

And still selling $10 lists. Sad...

**Gerry** · 12-28-2007, 05:56 AM

From the hills of North Carolina,
here's to a prosperous new year.

I thought it was a very good assessment that got way off topic.

I have not paid for any advertising or page rankings on any sites due to my suspicions outlined by the OP.

What I have found to combat this and to increase page rankings it to find markets or areas of personal knowledge that have voids that need to be filled. Niche markets. In other words, stick to what you know.

If may take a while, but I have achieved great traffic and success and rankings from offering a service others do not. I rank very high, usually top 1-5 spots, on Google and Yahoo searches and have never paid a penny for this opportunity.

And I can not overstress enough great metatags and tagging embedded into the site, pages, and content.

**nametrader** · 12-28-2007, 07:23 AM

Originally Posted by denny007

I think the click revenue is lower because offer increased more than demand. For example my ad budget is same for 2 years but it gets distributed to more pageviews...

And still selling $10 lists. Sad...

Every penny adds up Denny

**Dale Hubbard** · 12-28-2007, 07:44 AM

Quite so. Nowt wrong with making money from lists. I've been doing it since 1994. Bloody cheek.

**petrosc** · 12-28-2007, 12:23 PM

There are many facts from Google's and Yahoo's side negatively affecting our revenue. Some are new features, some are older.

A few that come to mind right now are Google's smart pricing, another thing is Yahoo's Traffic Quality Feature and the option to place different bids on different content websites(or even completely exclude some domains from ad campaigns)