Please make your own conclusion to which is better, direct or paid traffic.
Columbus.com will be the example domain name used for this post. Why Columbus? Because I randomly picked it from a list of the most populated cities in the United States of which Columbus Ohio is ranked 15th and the domain name was not developed.
In using Columbus.com as the example domain name, we will use a sales price of $250,000. Some will say this is high and some will say low, but for this example just work with me please. Compete.com shows the city domain name receiving 3,321 unique/total visits for the month of July. This also happens to be the domains greatest traffic month over the last 12 months.
Based on the sales price and probable type in traffic, lets figure out how much we are paying per visit over the course of twelve months. 3,321 visits per month x 12 months = 39,852 yearly visits divided into the sales price of $250,000 means you are paying approximately $6.27 per visitor. Using this model shows us any type in traffic past the first year would be free.
Now let’s say I’m able to purchase an alternative extension, for example a .me, Columbus.me for $750 and then I also buy my traffic. Using some of the possible local keywords (events, shopping, real estate, lawn care, doctors and auto repair) I can buy visitors using Google AdWords at the average rate of $1.91 each. Using this information I can buy the same 39,852 (12 months worth of visitors) + $750 domain purchase for $76,867.
As I said before, I’ll leave the conclusions up to you. Here are just a few that you may have.
- Going with Columbus.me leaves $173,133 to spend on development, print advertising, office space, employees and other operating expenses for the first year of business.
- Take the money saved by buying the alternate extension version and buy a Ferrari
- This is crazy, no way can you start a major development project without the dot com!
What would happen is that the .me would drive traffic to the .com, which would drive up the value of that undeveloped domain name.
How yougoing to outrank established .coms with a new .me in search engines? If SEM fails, you will be paying much more over the lifetime of the domain name to get that traffic.
If you are in business to make money over the long haul, spend the money on the .com. If you don’t have faith in your business plan… well you know the rest.
This is a valid point. Dot me still has to prove it can rank well in SEO. I’d love to hear if anyone has examples of some?
That’s crazy.. something branded as .me would drive that much traffic to .com – when was the last time you went to php.com by mistake instead of php.net?
Got to love those .com’ers, the whole world revolves around nothing else. Just wait for Google’s .g and watch the .com market disappear overnight.
I would take the columbus.com price over the .me. For the simple fact that people going to columbus.com are typing it in. This in return makes the person visiting the site more valuable than any search traffic you can muster. On top of that the people visiting the columbus.com would more than likely be from that area, making it a haven to sell local ad space.
Where as the .me is good but it does not have the targeted type of traffic as the .com does. Yes its very targeted but you can get a lot of wasted traffic from people casually clicking links. As Misses Domainers said, you will lose traffic to the .com.
Just is not a wise decision to go with the .me if you are in a long haul business plan. Just like you said columbus is the 15th largest city in the united states, this just opens you up to businesses galore that would pay thousands to advertise on the site. That $250k you spent on the domain can easily be recovered while building a brand with in the year your theory relates to. Basically bringing in even more NATURAL traffic over that span of time.
Patrick if we listen to the marketing gurus they will say that the marketing battle is won or lost in the consumers MIND before it is won or lost on the battle field.
Look at the spill over effect for justin.TV to
justinTV.com
http://siteanalytics.compete.com/justintv.com/?src=ff-tb
Success on any non .com tld fuels free traffic to the MIND’s
default TLD. Why would anyone want to send free traffic to
their competitor ?
Anthony
Excellent example Anthony. Thank you for providing this. I personally had no idea that JustinTV.com got that much traffic because of the success of Justin.tv.
I would agree that targeted traffic type in traffic for a .COM converts at a much higher rate IF the type in traffic was for a specific product name.
When it comes to Geos, well I am sure that the customer is not looking to actually purchase the city of Columbus. I would also venture to say that the type in traffic for the .com for Columbus is also likely receiving traffic for other items, maybe a student researching Christopher Columbus.
Not sure how someone could possibly say that a long term business model cannot be built on an alternative extension, there is absolutely nothing that can back that up. The business is NOT the domain. In all reality much more targeted traffic can be purchased that converts better for advertisers than simply the generic term Columbus.
Spending 250K on the domain leaves you with just that, a domain, an undeveloped property with 100 visitors a day. Spending much less on the name and spending the rest to build a real sustainable business and a developed property is the actual real way to build a business and not just buy a name.
Now, if the person grabbed 1 million in VC money and put 250K into the name and had cash to build a developed property then the discussion changes a bit but I am not sure even at that point giving up 25 percent of your upfront capital investment would be worth it.
I can tell you for a fact I personally have had customers call to say, and this is a quote, “Wow, how did you know about .ME, I really like that.” That is an EXACT quote. Do you think the customer cares at the end of the day. I am a domainer but also understand that we tend to forget how the actual end user thinks. I am with them everyday, they do not choose to buy or no t based on the extension.
I think that both ways will work, but for a much smaller investment with the .me you are able to drive traffic and in the end advertisers want one thing; they want their ad in front of targeted viewers.
Brian Diener
TeenDomainer.com
Bruce:
I truly respect what you’re doing with Missouri.me (actually, I think it’s fantastic), but I’ve been dealing with local advertisers since 1997 and I can tell you that it makes a huge difference to be the dotCom with the general public. The name and extension matter. You are really fortunate that Missouri.com is sitting on their hands. Yes, you can be successful with any name or extension, but believe me, you would not want to go toe-to-toe with advertisers if Missouri.com were as aggressive and creative as you are.
Yes, the business is not the domain, but the domain is the brand.
I’d rather pay $250k up front and have great memorability and not leak traffic than pay $75k/yr, year after year… forever. Plus, you’re also buying instant credibility. Visitors will see you as an authority, advertisers will take you more seriously, etc. If the category-killer .com is priced reasonably and you can afford it, I don’t think there’s ever a strong argument not to go for it.
I don’t think you’d have to buy that traffic year after year. It’s really just that initial year to match what the .com type in was getting. After a years time of having a fully developed site and hopefully “in this case” a LOCAL brand that can stand on it’s own.
Even then it’s all hypothetical. Until someone is willing to spend $250k on the .com and $250k on the .me or whatever extension selected we will never know.
“The business is NOT the domain.”
Nice. That needs to be imprinted as a tattoo, or printed on a wet t-shirt (Chef, call the girls plz) for this industry. That’s a very clear example of the cognitive difference between a pure- play name trader versus a developer. Excellent insight, Bruce. Should be fortune cookie.
@David
You say it much better than i do lol.
David,
First off coming from you the compliment on Missouri.me is truly appreciated. Your Brother and your success with geo domains was much of the inspiration behind what got me headed towards that focus. And ironically enough not soon after I ran into Patrick Carleton at the airport in St. Louis, anyway I digress.
I think at the end of the day you did hit on something that says it all, creativity (and positioning as part of that) are much of what creates the success of the business.
I think sometimes that when posts such as this one create discussion its easy for us domain investors to miss some of the pieces. I am the first to admit as a name the .COM will always hold more inherent value but once a business is created then it becomes more less obvious where the domain value begins and ends.
On a side note, it may or may not surprise some that I also own a city .com:) Coming soon…
Bruce
Incidentally, if someone could buy Columbus.com for $250,000, jump on it quick.
Funny timing as my business partner is flying to Columbus this morning. Strange coincidences aside, I don’t think the inherent value of a .me justifies laying out more than $100, let alone $750. The price of the .com really depends upon what you’re going to do with it. Imagine a philanthropist educator snatching up that name to provide us with a naval history of the Spanish explorations to the West Indies, where Columbus accidentally landed in the Caribbean! Probably nobody thought of that one.
Well if you could spend $40K buying traffic and make $80K directly off the bought traffic – you would never stop buying traffic.
I agree with some of the points made on both side here. I have some other than dot com sites that do well, BUT they do well JUST because I chose exact match keywords and I spent a lot of time and money on linking.
I also have dotcoms that are nothing but PHP redirects that are ranked at the top of the SERPs with ZERO promotion. It depends on the competition. It’s a lot easier to rank for a term with 100k results than it is to rank for one with over a million.
I have seen .org and .us outrank and get more traffic than the .com but the key is the development and linking. Dotcom makes it easier.
It’s kind of like betting on horse racing ya know. If you study the ponies really good and do your homework you have a chance of picking at least one of the top 3 horses, but if you know someone who can give you an inside tip, you may KNOW the winner.
Dotocm makes it easier but you can still achieve great results with other TLDs if you work hard at it. It also helps immensely if the dotcom owner is lazy.
Teahupoo
@David
Great points. We’ve had the same experience with Oakville.com
Even though .ca is the ccTLD for Canada, visitors and advertisers alike get our brand, visit our site more than the .ca site and pay more for advertising to be associated with the .com
Bottom line is that advertisers pay more – many multiples more – to be associated with the .com
- Richard
It’s an interesting debate because $170k can get you very, very far in website development and promotion. But there are the people who say type-in traffic is worth its weight in gold (Rick Schwartz). If you have, let’s say 500k to spend then the .com is worth it, it all depends on your budget though.
I have had a .me rank well in search, it was far tougher than a .com, no doubt about it, but it still does rank. (2 keyword phrase, no hyphen). You will never see type-in traffic for a .me (maybe .001% of a .com) but that is where the price-break comes from.
Would you mind sharing the .me that ranked well for you?
I’m a dot com fan, admittingly… and agree with many of the things people said here supporting .com especially free type-ins which never end. But I also think .org is really suitable for geo domains (non-biased with slight governmental feel) plus .org has proven it can rank well in Google whereas .me we will wait and see. I also think think .tv has good potential over the next ten years.
However! Everyone should pay attention to what Mark Ford said such as a new TLD coming out such as .g or, call me crazy, but I believe a completely new internet could be rolled out at some point, a second internet, perhaps with new way of addressing sites. Ok, I’ll get off the crackpot, the .com is better but the .me had a lot lower acquisition value so check your ROI on both.
Thank you Anthony. To put things in perspective, I wrote a more in-depth article to explain things.
http://nuvi.be/deadnamesystem