Frager Factor

Sunday, August 09, 2015

==> Frank Schilling Gems: "Many domain sales are driven by impulse and the names never use"

So popular was yesterday's trip down memory lane, I am returning to 2012 for more prescient thinking. Frank gets it often, early and right. Morgan Linton comments about this post "Fantastic post and all really good points!" and Rob Sequin just adds "wow"! Frank writes "Give it a few years .. people will start to figure out that perhaps less than 10 million domain names have any generic or descriptive value to anyone. When that concept becomes widely accepted you’ll see an even greater appreciation in the values of those names.  Get them while you still can."
Frank titled the post Lobster. Perhaps aimed at those who were finding their portfolios in a closed trap. Or what Andre said yesterday about domaining being hard work and never fair, just years earlier.

Lobster by Frank Schilling September 7, 2012

I’m not sure what it is about summer that makes time spent working, seem to inch-by so slowly. The Olympics were an additional distraction this year, a one-two punch of long days and the spectacle of competition in London may help explain why collective traffic volumes swooned so deeply this year.  Summer is always a slow time of year for type-in traffic. Ad budgets (your revenue) sit on the shelf while their overlords earn a well-deserved vacation in Europe, the Hamptons, LA or Vegas. This year’s drop was particularly pronounced.

Like most of you, summer takes me away from my browser and to a beach. Maybe it’s because I grew up wanting for more, but when I think about summer meals, my thoughts turn to seafood – and in particular, Lobster. A friend recently taught me about the change in perception surrounding this most coveted of delicacies.

In New England, at the turn of the 20th century, Lobster was often served in prisons, orphanages and insane-asylums. Plentiful and from the bottom of the sea – nobody wanted the stuff. Thank marketing, the spread of information and a resulting wholesale change in perception for Lobster earning its place as the priciest item on your menu.

Lobster’s come-uppance in status gives us all hope that the present segregated world for selling Web Traffic will last only so long until some newcomer finds a way to create disintermediation. Most advertisers are shocked to learn that targeted type in traffic from inactive domain names is valuable. Just as the supermarket has made it easy to forget where food really comes from, the large paid-search marketplaces operated by Yahoo and Google have done a terrific job marketing their platforms and obfuscating the manner in which traffic finds it’s way to the market shelf. The art of  ”understanding traffic” has been lost by advertisers as they have become more dependent on those marketplaces. These days, if it doesn’t show on a Comscore report, most advertisers will view a traffic source with suspicion and puzzlement.

All the syndication and sub-syndication partners like you who plumb additional traffic to Yahoo and Google’s paid-search marketplaces, help perpetuate the cycle, and the smaller downstream publishers (many of whom deliver even higher quality audience than the platform’s owner) have little control over their revenue destiny other than adding or taking away traffic and hoping that the upstreams don’t take an untenable amount of the pie through the machinations of the dreaded black-box.


Chin-up friends. As summer leaves us and the lobster retreat to deeper water, you can take comfort knowing there is still something you control. The din-level audience that comes to your domain names and small websites is yours. You need to make money in order to maintain that audience and your lifestyle, but you have options and a runway to make changes – and to experiment.

The two best ways I know of, to make money with domain names and small websites is by selling traffic or by selling the sites and domain names themselves.  Funny enough, even as audience fell this summer, the remaining audience sent a steady flow of purchase inquiries to undeveloped domain names. It was surprisingly robust.

Look at one of your better names and say it makes $50 a month on a Google feed. In my experience you may double to $100 if it’s optimized better. Unfortunately if you try to optimize things on a large scale, across many names, the large paid-search marketplaces will effectively shape your payout. The reasons for this normalization are nebulous and numerous, but all who have tried to optimize or improve a subset of undeveloped-names know the fruitless tail-chasing exercise I speak of. On an effort/reward basis, traffic sales are becoming a game of fire-and-forget. Little if any optimizing seems to last long, or result in worthwhile material changes to the plus side.


There is a misconception in the domain monetization World, that putting a small “for-sale” banner on your page will significantly lower your PPC revenues. I have been selling PPC traffic to paid search marketplaces for 13 years, and been selling names for several years with for-sale banners on my pages.  Since the beginning we have only ever been able to convert 12-15% of type-in visitors into ad-clicks. Sure, some names deliver 1% and some 120% CTR, but on average we get a consistent 12-15% CTR, whether we have a sales banner or not. No matter how good your ads are, some percentage (my estimate is 2 – 18% depending on the name) are looking to purchase the name they typed-in for registration price.  Another sub-group of “those” 2-18% are the folks willing to pay a premium over registration price. That subset are the buyers which turn into the sales which you read about on DNjournal and

In spite of all the development, prettier landers, uglier landers, and content building – a decade long consistent number of people who see parked pages, simply want to buy the name of the site they typed. In today’s unloved lobster PPC World, you would be crazy not to take that bunch and try to sell them the domain name they want, if the price makes sense.


An increasing section of society not only knows what a domain-name is, but understands that the good names are gone, and that there’s more demand for the good ones.  Buying and selling domain-names has taken a generational leap forward over the past 5 years (I’m expecting the reality show any week now).  Many of you (myself included) have several lifetimes of inventory to sell and you would be doing yourself a disservice if you didn’t embrace a lean-forward sales stance in a World where newTLDs and other innovations could cap the prices of your inventory.

My friend Rick Schwartz is right that domain names have gone up faster than any other commodity known to man, but past performance is not indicative of future potential.  Markets are maturing and times are a changing.  I am not advocating that newTLDs will cause a crash in .com prices. I do NOT believe that is going to happen. But new TLDs could put a cap on future growth in present SLD values.

17 years ago I worked in the glass business.  I lived in a condo.  Checking the MLS recently, those condos in 2012 are about 50% more valuable than they were 17 years ago. That’s not saying much folks. Nicer, newer condos put pricing pressure on the old ones.  NOTHING goes up forever and in the face of thousands of newTLDs (and tens of thousands to follow), it would be ambitious to proclaim the only way forward is a 10X increase in existing name values.  50% may be all we get over the next 20 years.  Flat could be the new “up” and that may not be so bad if you have cash-flow and you bought most of your names near wholesale-auction value, or at registration price.


Many domain sales are driven by impulse and the names never used. This truism was recently illustrated during the naming exercise of our product. We were initially going to call “talktopus”.  We decided we had to buy the mis-spellings with other vowels in the middle. I bought etc. but one holdout buyer wouldn’t give me a price.  Without that last typo we abandoned in favor of ..  Months later when the talktopus typo seller needed money, he reached out asking if our offer was still on the table, but by then the ship had sailed. The first two sellers did better. You need to strike while the iron is hot and the Universe has delivered the buyer to you, for as good as your name is, your best buyer could be the one who is here now. My talktapus purchases sit on the shelf with countless others which sell to other impulse buyers like me, every day.

You never know what is going to sell.  Selling names is a pull, not a push. Names are illiquid and as good as your best names are, they will not sell for full value if you need them sold today. You have to wait for the buyer and market to come to you and you need a system for following up inquiries and managing data on your buyers, lest that buyer give up and try for another name.


I have been in this business a long time and none of the existing sales platforms offers the tools and services I want or need. I know I’m not the only one who sees this problem. Whether your platform is “email” and “excel sheets” or something more sophisticated; the existing patchwork of marketplaces is an inefficient set of walled gardens, ripe for reinvention.

Creating the right platform is hard because Bob may want something completely different than Yoni or Garry – and you just want to handle sales yourself, or not sell at all..  As a service organization without domains of their own, it’s confounding for third parties to build an endless swiss-army knife of usecases and not know if any of them will actually get used or work.


So what if I told you that your friends at have been building a system over the past 9 months that doesn’t just rival, but exceeds the best sales platforms available to sell on the secondary market today. What if that platform completely decentralized the industry and allowed anyone to act as a broker and sell anyone else’s names. You could use all the same individuals and companies you’re using now, and they could continue to be paid for their deals just as they are now, but they would do that on a better platform which provides the name owner more transparency and control. What if that platform increased the volume of sincere inquiries and sales, without making it feel like hard work?

I imagine a world like iTunes, where any individual or organization can join and profit. A Universe where the walled gardens of existing marketplaces are distilled down to just domain names and the people in this industry who make things happen. I imagine a World where you control the leads, get market information on the buyer (live), select brokers, control the transaction and have discretion surrounding which escrow you will use to handle the money. I imagine a world where you can empower multiple brokers from different domain sales platforms to work for you – and all the better if that service is free.

We plan to introduce you to just such a service when our new version of the DNS platform launches at in October. If you plan to make name sales a part of your future, you owe it to yourself to sign up with for your ITC/DNS account. If you are an existing partner rest-easy. All our active clients will have access to this new World and the tools we’ve created. If you do not presently have an account, and are an operator of clean trademark-free names who wishes to engage in name-sales, the time to join is immediately, ahead of our October release.

We fully expect this new sales platform to change the face of domain name sales and the way you think about name-sales, just as revitalized the parking landscape when it began a short year-and-a-half ago.

While PPC pay rates are unpredictable, the steady flow of sales inquiries to our names shows that our traffic is real and has value to those who purchase and develop our names. In the final analysis, you are the one who controls your inventory.  You need a system that will let you sell more names, for more money, and more consistently. We can’t make the upstream paid search marketplaces and their advertisers, value domain traffic like the lobster it-is. But we can help you weather the rough patches and ensure a Lobster in your pot, by helping you create revenue independence — and we can empower you to help create a more permanent and sustainable industry in the process.

I sincerely look forward to helping you make it happen, beginning this October.  ; )

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

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