Are the fortunes of newGTLD sales on the turn?
Are the fortunes of newGTLD sales on the turn?Ever since their inception, the new Generic Top Level Domains (newGTLDs) seem to have struggled to find a direction. We wrote about this over a year ago and, at times, it can feel as true now as it was then.
Not only have these recent premium sales of newGTLD domain names broken records, but they may be an indication that newGTLD domain names have turned a corner.
What's interesting is that they have one thing in common – they are Phrase Domains. Domain names that make natural language phrases, and they are starting to fetch the kind of money previously only dot-COM domains could dream of. When you look at the highest prices fetched by newGTLDs domains, after sex.xxx, the next three slots are held by Phrase Domains (in order) home.loans, the.club and video.games
Phrase Domains vs Keyword DomainsPhrase Domains are like Keyword Domains, but with a subtle difference. Keyword Domains are domain names that are arbitrarily made of keywords – in the newGTLD space that would be like casino.online, but a Phrase Domain captures the sort of phrase people actually say, not just a collection of keyword – so online.casino !
The reason is it important is how it relates to search and the way search is mutating as the internet moves to mobile. Desktop search tends to be characterised by a string of disjointed keywords, where as mobile search tends to be more natural language based.
This is probably for two reasons. Firstly, it may be age related. Desktop tends to be used by an older age group and mobile a younger. Younger people don't remember the days when computers couldn't understand natural language at all, and keyword search was the only option. Where as older people do – so its kind of just force of habit (and may be laziness, as you don't have to type so much!).
The other big difference between desktop and mobile is that people talk to their phones – they use voice entry as well as keyboard entry - and when they talk to their phone, they tend to talk in natural language, not disjointed keywords.
So a Phrase Domain has the same value as a Keyword Domain on the desktop – online.casino and casino.online are of reasonably equal value, but on mobile the more natural online.casino is considerably more valuable.
How it went downTalk.Show sold for $50,000 on 2018-01-08 – In itself, this is not a mind bending amount even for a newGTLD, and nowhere near a record price. coffee.club had sold for $100,000 in 2014 and in April 2017 Rightside (now part of the Donuts group) had revealed its best sales to date. Top of the list was video.games which had fetched $183,000 in Feb-2017. In fact, all but one of the sales in their top 10 had fetched $50,000 or above.
Home.Loans sold for $500,000 last month (Jan-2018) – at the time not only breaking the record price for a newGTLD, but smashing the old record by some considerable way. Citing one of the reasons for buying the domain name, serial entrepreneur Blake Janover put it really simply - “The website URL is the brand … I mean, what does dot-COM really mean any more anyway, what is its utility?”.
The.Club sold later that week (Jan-2018) for $300,000 and now hosts an exclusive travel and asset exchange business focusing on vacation property, private jets and high end luxury yachts. Once again the website name, domain name, is the brand – it is The Club!.
What makes Phrase Domain so special?
1 … The Website is the BrandIn many ways, its not hard to see. As Blake Janover points out - The website is the brand.
In a world where everybody is trying so hard to get their brand across and get noticed why not give yourself a head start in life. Yes, you could buy a “brandable” dot-COM domain, but it can take a small fortune to get it into the public consciousness.
“Uber” is now incredibly well known, but they have burnt through a ton a cash, and time, to get into that position. Few people realise they've been going since 2009 and they are still burning through cash at the rate of a net-loss of $2.6 billion per year! Obviously, that's for a whole range of reasons, but in 2015 their sales & marketing expenses were $295 million, in the first six months alone.
So why not start with a phrase customers already know, use the dot as part of the branding, and offer a business that does what it says on the tin, and that's exactly what is going on at home.loans – nobody's going to forget that, or wonder what service the business offers – if Uber hadn't spent all that money telling you what they do, it wouldn't be easy to guess.
By playing with the DNS information in the domain you can also extend the branding to include sub-categories, like New.home.Loans, Second.home.Loans or Cheapest.home.Loans - Now you're starting to blur the lines between selling domain names and selling search terms. That's exciting. That's new territory.
This really is taking domain names into a whole new area of use – this really is the innovation ICANN dreamt of when they instituted the newGTLD program in the first place. Not only did they want to extend the domain space, as the meaningful dot-COM domains were drying up, but they also wanted to extend the use cases for DNS and domain names – innovation & creativity – something that's been really lacking in the newGTLD space since day one.
And its not just the presentation of branding for your website, as these domains work for email too – so email@example.com is the primary contact point they publish on their site – pretty cool.
Dot-COM is a great brand, but never forget it is somebody else's brand. Every time you publish a website of the form [yourbrand].COM you are not only promoting your brand, but theirs too.
2 … Search Ranking BoostThis brings us nicely to the second big advantage of Phrase Domains – which is the extent to which they naturally boost your visitors numbers.
This happens in two different ways – firstly, you get a search ranking boost.
“Home.loans is the ideal organic search term and digital media asset for this business”
How could you possible have a better domain name than one that matches the primary search term you would want to optimise for. We have discussed a number of times before how this can then translate directly into a boost to your search ranking for that term.
“home loans” is always going to be a tough term to rank for, without just throwing money at it – but extend to three words, and match that in the DNS (as above), and you'll definitely stand a fighting chance of making a real difference without the mega-spend.
3 … Direct Type-in TrafficYou will also get direct, targeted, type-in traffic on a Phrase Domain. Its not exactly clear why this happens. Our experience is that the traffic is 90% mobile and 65% aged under 34.
It may be partly mistyping “.” instead of space, especially on a mobile keyboard. I can't say I think I do that a lot, but I use a PC way more than Gen-Z do, so that may just be an age thing!
It may be that Gen-Z / Millennial users simply don't have the same historical relationship with dot-COM domains that us older folks have, so they may feel its reasonable to expect home.loans to have a website offering home loans. It just makes sense to them. It may also be the fact that having a domain name constructed from words that are already known to all mobile keyboards means they are easier to enter – kind of like a drive-by visitor.
Either way the traffic is real and targeted. We installed a webchat on our site to see what was going on, so we chat with these people. They are definitely looking for what they typed in. Yesterday I had a guy looking to buy a St.Bernard Dog – he had typed in StBernard.for.Sale (the upper case letters I've added for clarity). It can take a while to persuade a guy who thinks he's found a pet shop that you only sell domain names.
We own Homes.for.Sale and we get up to 1000 visitors a week on that domain. That may not sound a lot, but when you consider click-throughs bought from Facebook advertising typically cost around 30c each (and that's a reasonably conservative estimate), that would make Homes.for.Sale worth over $15,000 in visitor traffic alone. Assuming the type-in traffic is about as equally targeted as the Facebook click-throughs, which seems fair as the conversion rate on Facebook click-throughs isn't that great – typically people quote 10%.
If you go out and buy a “brandable” dot-COM domain, unless the previous owner has done a lot of work to develop the brand (which you should expect to pay for), you're never going to get a domain name that just comes with traffic like that. You buy a great dot-COM and build a fantastic website, but (mostly) nobody will come until you start promoting it. There are clearly exceptions to that – for example, single keyword noun dot-COMs like shoes.com, but now you're talking crazy money. Walmart paid $9 million for that domain name, also acquiring social media accounts and customer trading data included in the price.
One business recognised the value of Phrase Domains some time ago. The problem is that two words Phrase Domain are rare, so they're also expensive. That's where Names.of.London comes in. They've extended the phrase to three words. This hugely increases the number of phrases, which means you can bring down the price.