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When you look at domaining history over the last few years you can see that there has been a migration from a revenue to a profit mentality. If you are unsure if this is the case then just take a look at the increase in the number of drops and the subsequent high level of interest that Verisign now has in the space. More drops equals less registrations equals less revenue for the registry monolith.
 The force that has been driving this trend has largely been the rapid decline in earnings per click for domain traffic. Despite it being highly targeted and very valuable to advertisers domain traffic has inversely experienced the rise in online advertising spend. The question I'm asking is, "Why?" and "What's next for our beleaguered industry?"
The Global Financial Crisis (GFC) impacted upstream advertising aggregators like Google and Yahoo as investors were forced to sell off their shareholding to shore up capital losses and possibly fund margin calls. What we now know is that the online advertising world largely thrived during this period of time and in particular Google continued to grow its advertising revenues. Despite this if you are at the top of the Google tree and you see the rest of the corporate world crumbling around you then you have to assume that at some stage it will also impact your own company.
What ensured was a drive to become more efficient and find potential revenue streams that have not been fully strip mined. The domain channel is highly fragmented and is an ideal source of additional revenue that has little ability to "fight back" against draconian policies.
The result has been Google dramatically dropping its Traffic Acquisition Cost (TAC) to the domain channel over the last several years. From a Google perspective it makes sense to drive as much out of this channel as possible but from a domain owner's point of view the huge drop in EPC rates combined with "smart pricing" has meant much smaller returns for highly targeted traffic.
Smart Pricing has been with us for quite some time now and it was really the result of Google attempting to clean up the traffic sent to advertisers. The problem was that in many cases the baby was thrown out with the bath water as good domain traffic from reputable domain owners was penalised to Google's benefit.
So what can domain owner's do about this attack on their businesses? Sun Tzu from the timeless book "The Art of War" says that when you have an enemy much larger than you then you should not confront that enemy but harass them.
The first thing that every domain owner should do is move their domains to a traffic aggregator that has built systems for managing the traffic more efficiently. I should say up front that I'm one of the owners of ParkLogic that has built such a system using SalesForce.com as the front reporting engine. This is a robust Fortune 500 grade technology platform that is designed to scale.
ParkLogic effectively auctions off all our client's traffic every day and then we send it to the highest bidder.....the result will typically lead to greater payouts. We typically work with larger domain owners (minimum revenue of greater than $3,000 per month) and if you are in this category then please contact me on +613 9511 8568 as I would love to speak with you (remember that I'm in the Australian East coast time zone).
The second thing every domain owner should do is pick one to two domains and start building them out. Use Joomla or Wordpress and the huge numbers of tools and plugins to quickly generate a great looking site and then start writing great content. When you choose a site to build remember to choose one with a topic that you are really passionate about. It's easier to write about something that you love then something that is a chore.
Once you have these sites up, running and making money use the funds that they generate to pick another site to develop. Keep this process up and don't stop. You can look at one of my own developments at www.downwind.com.au - I love flying so it's all about aviation. You can also see my second site that is slowly moving along at aratonga.com - it's a story for children.
Google and Yahoo have been providing the underlying revenue for our industry but now that they are taken more than their fair share domain owners need to start getting active with their domains. We need to harrass them and insulate ourselves from their ability to drastically impact our personal lives and businesses. Move your domains to aggregators and build some out - there's my advice for the week!
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Send it to Amazon, eBay, or the Red Cross, or to you sale page at Sedo or similar platform, and just say goodbye to Google and Yahoo and Bing.