Domains are valuable because they help businesses market themselves.  The right domain name can increase the impact of any online activity many times over and can even help you in the offline world.  Just like selecting the right office/retail space in the ‘real world’, using the right domain name can make a real difference to your bottom line. Even if you already have an established domain name and website, don’t despair – it’s not too late and there are many different ways that you can use additional domain names to support your online presence without impacting any current initiatives.  We’ll cover that later, but to start with, please read on for a brief overview of what it actually is that makes a domain name valuable:  

1)       Memorability / Marketing Effectiveness 

Generic names are easy to remember because people are already familiar with the words used in them. For the same reason, people are also much less likely to misspell generic domains. Example:  You see a plumber’s van during your commute to work in Sydney. You’re looking to get some work done and when you get to work and are at your computer you try to remember the website address painted on the side of the van. Are you more likely to remember and correctly spell SydneyPlumbing.com.au, ForrestPlumbers.com.au or JPFP.com.au?  

2)       Descriptive 

Quality generic domains help complete the marketer’s goal of identifying what the product is and informing potential customers how to go about accessing more information on the product.  As people in marketing know very well, simplicity is the key to marketing cut-through and a simple message will always outperform on ROI (Return on Investment). From the example above simply seeing SydneyPlumbing.com.au tell potential customers exactly what the company does, where it services and how to contact them.  

3)       Search Engine Advantage 

Search engines use complicated algorithms to determine the order of the results for any given search query. Whilst there are many hundreds of factors that go into this algorithm, one of the most important is the domain name itself. If the keyword searched for is contained within the domain name, Google reasons that the site is likely to be relevant to the search query and gives that website a massive positioning advantage in the results. Additionally, if that domain name matches the search phrase exactly, this preference is even more pronounced. Search for a few generic phrases in Google and you’ll see the first page will be dominated with domains that contain the search term of part thereof.  See also: http://www.seomoz.org/blog/exact-match-domains-are-far-too-powerful-is-their-time-limited   

4)       ‘Own’ Your Industry 

Using a domain name that describes your industry or product, not just your company, also positions the company as the authoritative figure in the field.  Particularly for ‘category killer’ domain names (think CarInsurance.com.au or iPhoneRepairs.com.au etc) where there can be only one. It also precludes your competitors from using the name and claiming that authority. 


5)       Search Engine Marketing (SEM) Benefits 

If you spend much money on Google Adwords or Yahoo Search Marketing, using a generic domain name that describes your product or industry (therefore closer matching the user’s search) in your ads can dramatically increase your CTR and lower your costs. Anyone who knows how SEM works will realise what a difference this can ultimately mean to your cost per conversion.Potential customers will consider the domain name before they click and the closer that domain name matches to their search, the more likely they are to click on it.  See also http://memorabledomains.co.uk/ppc-generic-domains.html  

6)       Type-in Traffic 

Some people will just type in a URL rather than search.  They will reason that going to shoes.com.au will likely deliver information on shoes and so as a shortcut may simply type the equivalent search query into the address bar and append a ‘.com.au’.  What this delivers is super-targeted ongoing traffic for life!  

7)       Investment Potential 

When you buy or register a generic domain name, you’re buying something that will appreciate in value and will usually have a market to many other people. Unlike a business expense such as newspaper ad, a domain name is an asset that will continue to deliver value for as long as you keep renewing it.  There are only a finite number of meaningful domains so as long as more business activity on the web continues to increase, so will the price of domain names. This means if your needs change down the line, you will likely be able to offload the domain on the aftermarket and recoup all your costs or even profit from the overall transaction.  See also http://www.idnx.com  

Further Reading

http://www.dnjournal.com/ - Weekly summary of domain name sales around the world

http://www.dntrade.com.au/ - Australian Domain Name Forum

http://www.smh.com.au/technology/technology-news/domain-name-record-smashed-after-schoolboy-error-20110915-1kb4m.html - Australian domain name record broken in 2011 - $125,000 +GST

http://money.cnn.com/magazines/business2/business2_archive/2007/06/01/100050989/ The .au domain market mirror that of the .com market in 2007, albeit at a smaller scale.

http://www.thedomains.com/2008/06/15/comau-gold-rush-june-2008-major-corporates-start-buying-up-generic-aftermarket-domains/ - See why Fosters own www.Beer.com.au, Valvoline own www.oil.com.au etc

http://www.netfleet.com.au – Australia’s leading website to buy sell and catch domain names.

http://www.netregistry.com.au/resources/video/product/domains-netfleet/ Video on the value of Australian domain names