Frager Factor

Friday, May 17, 2013

The "Rosener Equation" Versus The "Frager Methodology": A Lesson In Domain Value and T.R.A.F.F.I.C

PS. Domains have value as brands. But they also have value as advertisements.
9 out of 10 ads I see on TV or billboards for lawyers are so cluttered you have no recall to follow up. Put "" on a bus, billboard or tagged to a TV spot and the phone will ring. A true appraisal must asses a value for this.

I and hundreds of others have confirmed that the real value in attending a T.R.A.F.F.I.C conference is in the people you meet, what you can learn from the stories you here and the relationships formed that pay dividends for a lifetime.

I was reminded of that today when chatting with my go to guy for improving my client's web effectiveness. We met at T.R.A.F.F.I.C. I knew what he could do to add value to my agency from his presentation at T.R.A.F.F.I.C  and from all the questions he got from the audience and the answers he had.

Then when reading Andrew's post on appraisals I recalled an appraisal I created for a client who came in with a spreadsheet justifying a $300K value and left with a 30 page document that set the figure at $52 million. The difference were all the factors I understood from my corporate life that weren't considered. That appraisal ended up in Silicon Valley at a famous firm that helps entrepreneurs find investors and open credit lines. They expanded the document to 100 pages, had the figures audited and validated by a big 8 accounting firm and have since used my formula to do appraisals on their own, citing that their outlook is based on "The Frager Methodology." What they miss is that methodology was customized for a single application. Each domain will have different values.

And this shortchanged a recent client I will refer to as X. Because unlike my client, they held the #1 position for a keyword that generates the fifth largest share of Google's revenue. Two firms whose name has no inherent ad value pay $45 a lead and convert perhaps five out of ten buying the surrounding real estate on Google, meaning their cost to acquire a new customer is $250. In addition each spends $100 million dollars a year on TV advertising so that when you see their ad you know what they can do for you.

X gets 300K a month visitors from the top organic Google listing. If half convert, that's 250 times 150,000 x 12 plus $100 million for TV that comes free built into the domain. They have also amassed 12 million opt-ins, a list that is rented to others.

Overlooked in an appraisal that stole my work but wrongly assumed one size would fit all, on a ten year multiple was billions of dollars.

Also overlooked was the licensing potential for attaching this name to an app. An app that didn't exist when they had the name. How can one name be used by multiple parties.... the answer is also in the often overlooked untapped domain value.

But all of this pales to this case study I shared on Rick's board. Again thanks to
T.R.A.F.F.I.C and a chance seating on a bus next to the owner of, my eyes were opened to an incredible business model and also a name that has licensing potential to serve many applications.

Especially this missed opportunity.

From Rick's Board circa 2007

RE: Madison Ave Gets It Wrong AGAIN
Here's another I just saw on TV and it's the mother of all Madison Ave mistakes:

In Oct. 9, 2006 the Army's new advertising agency launched campaign - Army Strong - follows earlier slogans of "Be All That You Can Be" and more recently "An Army of One," to attract recruits into the all-volunteer Army.

The two-year agency contract, that can be renewed for three subsequent one-year periods, or up to five years total, could be worth up to $1.35 BILLION over five years, making it the governments largest ad account.

The Army spent BILLIONS to ingrain "army strong". Yet the call to action includes "go army" which is never mentioned in the audio.

Thank God is there to catch the leads. It's like having money float by your window and luckily having someone there to catch it and return it to you. Unfortunately, most brands are not so lucky.

With Traffic coming to Madison Ave it's time to confront the panel with these examples and ask them "why"?

As for, how much of the billion dollar budget would that be worth?

About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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