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Here is the list of the previous articles in this series on the domain industry:
Part 1 - Domain Industry and Valuations
Part 2 - The domain bubble
Part 3 - What caused the domain bubble?
Part 4 - Domains and the sub-prime shock
Part 5 - Domain values and opportunities
Part 6 - The Pressures on PPC
You can't pick up the newspaper or read a website today where the number one issue isn't the economy. Industry sector after industry sector is cutting costs, rationalizing processes and looking at how to streamline their business operations. A downturn tends to cause companies with bloated expense lines to go on a rapid diet.
 Likewise I believe that it's time for the domain industry to do a little introspection and take a look at some of the substandard practices being adopted in the name of short-term gain.
What I find really surprising is the number of people I speak to that complain about the decline in PPC rates but then do nothing about it. The first thing that needs to be looked at is to ensure that your portfolio of domains does not have ANY fraudulent traffic. Some of us that are squeaky clean may be surprised to learn that a domain that we purchased a long time ago was actually a bot-enduced click farm.
Clean up your own house and ensure that your portfolio is adding value to your parking partners overall portfolio of domains. Find out why some domains have a low Click Through Rate (CTR), examine the trends in traffic and earnings per click. Basically, get dirty in the data.
Low CTR domains are often an absolute gold mine if just a little effort is put into them. Moving these domains from a 1% to 10% CTR means ten times the revenue generated! This will often have a great benefit for the advertiser as well as they get more targeted traffic to their sites.
Never forget that ultimately the people that pay us (the advertisers) want to accomplish a transaction at the end of spending advertising dollars. This means that it is in our long-term interest to ensure that we are providing value to the advertiser. The reason why some advertisers opt-out of the domain channel is because they believe that we are all fraudulent and they don't want to risk their hard earned money on a potentially bad sales channel. Maybe this is a job for the ICA but we need to reverse this image and get a positive message out to advertisers.
Just like Google, Yahoo and other players in the domain industry, domain owners need to take responsibility for their traffic. Stop placing irrelevant high paying keywords on garbage traffic where you cross your fingers for that $10 click. This is a short-term game and the message from the market is that it only wants to deal with long-term players.
I feel like a broken record saying this but.....we need to ensure that this type of behaviour is stamped out. I personally believe that there is no such thing as "bad" traffic (other than fraudulent or bot) but there is a LOT of badly targeted traffic that needs to be cleaned up. In my opinion, deliberately placing an unrelated high value keyword on low value traffic is fraud. Just don't do it.
The challenge for domain owners is that a lot of this introspection takes a great deal of time and work. It also involves a change in mind-set from optimizing for revenue to optimizing for all stake-holders in the value chain. Remember that having a domain with traffic that no one wants to pay for because of past bad activities is not a good position to be in. Turning pristine real estate into a slum will ultimately only give you slum prices.
I must admit it that I spend a lot of my time building systems and cleaning up portfolios for domain owners. It's not because these people are "bad" in any sense but because I personally believe that domain traffic targeting and optimization is a specialized skill that requires a lot of work. Most domain owners have developed specialized skills in acquiring domains not in optimizing them. It may be time to do a little outsourcing of what is often a big headache!
The next article in the series will concentrate back on the yellow graph and where I see the domain industry in the future.
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