Domain Acquisition — How Much is Too Much?

A company that’s redesigning its Web site recently called me to discuss the possibility of my firm assisting them with their SEO efforts. First, I congratulated them on being one of the few companies to consider SEO prior to re-launching their site (that’s the way it’s done, people!). Then we talked about their domain name.

This company was planning to move their site to a new domain because the old domain (and by “old,” I mean 10 years old) no longer represented the company. As many of us do, they typed in about 100 different domain names into GoDaddy’s search and eventually found an available domain name that was more in line with their core business.

One problem: their domain name choice was absolutely horrible. It had five keywords crammed together. It was confusing, hard to recall, and terrible for branding, SEO purposes, and any other measurement that you wanted to put to it.

But, the domain name only cost $9.99 per year. What a deal, right?

With a little searching, I discovered an unused domain name that was an exact match to their “most important keyword phrase,” was originally registered in the 1990s (good domain age), and had an overall clear history. However, it would cost $20,000.

Their reply probably won’t surprise you: “We can’t afford $20,000 for a domain name!”

“Are you sure?” I asked.

Check the Math

We knew that this exact keyword phrase generated approximately 180,000 searches per month because this prospect bought PPC ads on this exact phrase for many years. And, based upon some studies, we know that a number one organic search engine ranking could get them up to 56 percent of all of the clicks. Even if we “only” had a number two or number three ranking, we could expect at least 10 percent click-through ratio.

This client was also discussing cutting way back on their Google AdWords campaign because the CPC wasn’t getting them the return it once did. They know they can make money on a $2.50 CPC, but in recent months, the CPC has skyrocketed to $5 (or more) per click.

Let’s do some math: $2.50 CPC times 18,000 clicks (a 10 percent click-through from 180,000 searches) equals $45,000.

That math works. And the prospect is now reconsidering what they can and can’t afford.

With that said, having a domain name with the keywords in it does not guarantee you a top search engine ranking. Nothing guarantees you a top ranking.

However, for this particular client, using a 301 permanent redirect, we would be able to redirect a domain name with a great history and a great number of quality links to this new domain name. This new domain also has age, relevant, existing content and pages, and links. With proper considerations for SEO throughout the redesign/development/information architecture/content writing process, there’s a very good chance — in this particular instance — that they could rank in the top three for this “most important keyword phrase.”

And, if the click-through ratio is “only” one percent, they will realize value from this domain acquisition in just a few short months. It will pay dividends for years to come.

A side value of acquiring a domain name that has a very popular keyword phrase in it (and a “.com” top-level domain) is that you may also see “type in” traffic. Some people, rather than search for a keyword, type a URL into their browser’s address bar. There are many domain name owners (called “domainers”) who base the value of a domain name off of this metric (type-in traffic), alone.

Domain Value Tips

Bill Hartzer, who’s on my staff, is an accomplished/knowledgeable domain name expert. Here are some of his tips for determining the value of a domain name:

  • Is there a keyword in it?
  • How many people search for that keyword on a regular basis?
  • Is it memorable?
  • What is the history of the domain name (number of on-topic links, level of traffic, TLD of the domain name)?
  • Does it have a hyphen in it? Domain names with hyphens are less valuable, but may be a good option for SEO purposes because the main keyword may be in the domain name.

When deciding whether you should buy a keyword-rich domain name for your business or your newly-redesigned Web site, keep in mind that you don’t have to come up with all of the cash for a domain name purchase. Several companies allow you to finance domain name purchases.

For example, Domain Capital offers financing to businesses based on the “inherent and recognized value of premium domain names.” So, it’s possible you won’t have to come up with $20,000 for a domain; you could finance the domain name purchase and pay it back over time, working in the financing cost into your marketing plan.

So, take a look around when you’re looking to upgrade or redesign your Web site with a new domain name. If you don’t immediately find a domain name that is available for registration, consider acquiring a “premium” domain name. It might be more affordable than you think.

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