This is the second part in a series on buying traffic domain names.
Once you’re comfortable that the legal side of the portfolio has been addressed then you really need to dive into the traffic numbers and do some research into where the traffic comes from.
So let’s get back to basics. You’re about to purchase a traffic portfolio. The first question that you should ask is, “Where does traffic come from?”
Traffic typically comes from the following sources:
1. Direct type-in
Generic or short domain (eg. Beds.com, gx.com.au)
2. Typos
Typo of a generic domain (eg. Fruit spelt fruit)
Typo of a weak trademark domain (eg. Joespizashop.com instead of Joespizzashop.com)
Typo of a brand (eg. Verison instead of Verizon)
3. Link based traffic
4. Purchased
5. Hijacked traffic such as tool-bars and NXD traffic.
In the above list of places where traffic comes from I’m making no attempt to try and pontificate on whether they are appropriate traffic sources. I’m only indicating that they are sources of traffic. So please do not get upset at the mention of typo, trademark, purchased traffic etc.
Many years ago I purchased my second domain name and it failed miserably to provide any sort of return. Each and every year I faithfully registered the domain to remind myself to ALWAYS ask the question, “Where does the traffic come from?” In my case, the domain had a lot of Russian bot traffic that didn’t monetise at all. There’s nothing like a $10 annual learning course to remind you of an important lesson.
So what are some of the problems of these sources of traffic from a revenue perspective (not legal). Direct type-in and typos of generic domains are typically good sources of traffic that are stable and consistent.
Typos of trademarks and brands have a more traffic due to the popularity of the core website but you will often run into other problems….there is nothing quite like a legal letter to get your adrenalin flowing.
Linked based traffic is likely to degrade over time so you would want to pay a much lower multiple for this type of traffic. Linked based traffic is where a domain is receiving traffic due to the number of other sites that are linked to them. These domains will often be old websites that used to be popular but for whatever reason closed down. The greater the concentration of links from another site the more the risk will go up that the traffic will vanish if the link is deleted.
Purchased traffic is great because you can control how much you want to buy. The downside is that it’s really hard to make money off this traffic and there is always the problem of maintaining quality. Traffic sellers often want their money upfront (ie. they have no risk) and then you need to hopefully sell the traffic onto someone else and make a margin (ie. you have all the risk).
What the traffic seller will often do is get you hooked on good quality traffic and then dilute it over time so that they can sell the “good stuff” to someone else.
Be really careful of young (ie. recently registered) domains that have a lot of traffic. There are some unscrupulous sellers that pump up the traffic on domains with purchased traffic and then sell them off. As soon as they have your money they stop sending the traffic you’ve just done your money.
Hijacked traffic via toolbars or NXD (Non-Existent Domain) traffic can be of high quality (ie. real users) but low conversion (ie. they aren’t clicking). The reason for this is that users didn’t want to go where they were forced by some browser app to go to. Once again, this type of traffic is often used to pump up the traffic levels of domains by bad sellers before they sell them.
So that’s a brief rundown on traffic sources….the next step is how do you test the traffic quality.