Conversion Rates

Conversion rates on domain traffic are similar to what is achieved through any major search engine. As most domain traffic is monetized through search engines, it is subject to quality controls and normalized-cost-per-click just like any other search traffic. Approximately 10% of Google and Yahoo's traffic is actually sourced from professional domain traffic. So, if you advertise on major search engines, you are buying domain traffic already.

Why is domain traffic as valuable as search engine traffic? Because the user's intent is exactly the same! When an Internet user types a domain name into the address bar of an Internet browser, it is very similar to typing a phrase into the search bar. A testament to this fact is the reverse action wherein a large volume of domains get typed into the search bar and conversely, a number of search phrases get typed into the browser address bar. To most Internet users, both actions are synonymous.

Keyboard Test

The reason that search engine and domain traffic are so valuable is that they are very specific to what the user actually wants. Users have their own unique desires and attempt to fulfill them by typing their thoughts into a search box or a browser address bar. All other forms of Internet advertising are biased by the website it is presented on and hence do not accurately represent the user's original thought. Keyboard typing is proactive (very potent) while all other forms are reactive i.e. the user must be prompted to consider an advertisement. In the real world this equates to billboards, TV ads, signs on cabs and telemarketing. On the other hand, search and Domainadvertising.com are more like people looking up a company in the Yellow Pages i.e. the user knows exactly what he or she wants and the need is immediate.

Search Engines   Domain Search

The potency of Internet user traffic for advertising purposes is directly linked to how closely coupled the users intent is to the advertising being offered. If users have an original need, they attempt to fulfill that need via the Internet, and subsequently receive advertisements that exactly match their needs. Thus, the strongest potency is achieved with the highest conversion rate. Both Exact Search and Domain Search traffic meet these criteria.

Contextual Search

Contextual advertising uses the algorithmic contextual similarity between what a user searches for and other advertiser phrases that are similar. Effectively, this is offering the user something that isn't exactly what they wanted but is contextually close and more commercial than the phrase they searched for. By nature this is a less specific match to the intent and therefore, will result in a lower conversion rate.

Contextual Content

Contextual advertising that matches advertising to what other text is written on a website page is a considerable step away from the user's intent. It relies on the association between the content on a web page and an advertisement served on it. Since thousands of words may be present on a web page, the advertisements served are only based on a guess of what the web page is about. It no longer represents a proactive match to a user's intent; rather it represents what the user may be looking for on a website. It is similar to billboard advertising in a way i.e. actively market to a user and hope that he or she will react.

Behavioral Marketing

Behavioral history is a long way from perfect. It relies on how a user behaves over time and makes a tremendous amount of assumptions. It targets a collection of things you may have been looking for in the past; not what you are looking for now. If you just bought a new camera after a great deal of research, are you still looking for a camera? In behavioral marketing, the assumption is always yes.

Untargeted Advertising

Advertisers that focus on reach rather than conversion rates use untargeted advertising to build up volume over value. Usually, this strategy is only employed under specific circumstances; for example, a company with deep pockets may attempt to create a barrier to entry by swamping the marketplace with advertisements. Not only is this strategy far from the user's intent, but is also becoming too expensive even for the biggest of the companies to afford.

Qualification

One of the interesting aspects of domain traffic is the factor of qualification that is provided by professional domain owners or domainers. Domains are purchased by domainers who in turn sell their traffic and often the domain names themselves. And domainers have a strong preference for buying domains that will provide a reasonable amount of traffic, are generic in nature, and are based on commercially advertised terms. Due to this selective preference, if you were to measure the inherent value of search traffic versus domain traffic, the latter would be more commercial in nature.