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Domain Investors Benefit From Global Online Advertising Trends

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Each year, venerable venture capitalist firm Kleiner Perkins, releases a slide deck which has become the “State of the Union” for the Internet. Of the 294 slides, a number immediately caught my attention as they directly impact domain traffic monetisation.

Escrow.com

There are over 3.6B Internet users in the world which represents 49% of the world’s population. The growth in the number of new Internet users getting online is slowing from 12% in 2016 to 7% in 2017. Eventually, you would expect the rate of growth to asymptote at the rate of population growth globally.

What this shows is the Internet is the single largest marketplace in the world and more than that....it's accessible by everyone. Natural type-in domain traffic should continue to increase at similar rates to the overall growth rate. User sophistication and technological innovations will and has impacted this rate of growth. The challenge as always been how to best remove the junk traffic from the real traffic.....more on this in a future article.

Internet User Growth

Internet advertising spend for 2017 in the USA continued to move upwards by 21% to a peak of $88B. Since the growth in the number of online users in the USA is almost flat the value per user from an advertiser’s perspective is continuing to increase. This will place an upward pressure on EPC rates and make domains with traffic that much more valuable.

Mobile advertising has now eclipsed the desktop with close to 60% of advertising being mobile based. Domains with mobile traffic should be hot properties as advertisers compete for the quality traffic brought by domains.


USA Internet Advertising Spend

The following chart shows the percentage shift in the consumption of media from different sources. Mobile is growing by 29% while the time spent on every other media source is declining. What’s interesting is the $7B opportunity highlighted for mobile and the fact that there is an opportunity for mobile advertising to fill this gap.

Mobile Shift

The final slide I picked from the deck highlights the massive growth in online advertising revenue in China. Although the Year-on-Year growth is declining, it’s declining from an insane peak down to an equally insane 29% per year. Although the Chinese online advertising market is currently just over 50% of the USA market it’s a very big number that is continuing to accelerate upwards.

Chinese online advertising spend

What this highlights for me is the opportunities in the Chinese market for traffic domains. In the past, the Chinese EPC rates have been extremely low (to non-existent), this chart suggests this has now turned around and the Chinese traffic is becoming valuable. The challenge is how to remove all of the bots from the human based traffic.

Overall, the slides talk about massive upwards trends that should be good news for domain traffic investors. Although Google has been taking a larger and larger portion of the pie the facts are there are opportunities outside of the Google ecosystem where the global trends of paying more for traffic are evident. Domain investors not taking advantage of these trends will fall be the wayside as they continue to drop valuable domain names rather than keeping them off the back of increased revenues.

Does .ICU Have Legs?
Domain Traffic Monetisation Continues to Grow

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Thursday, 19 July 2018
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