What Gives A Domain Name Value & What Makes One Domain More Valuable Than Another?
Below are some of the most important criteria and benefits to think about when purchasing a domain name. Although it’s difficult to have all of the following attributes, most premium domain names meet the majority of the characteristics set forth below.
Pronunciation – Is the domain name easy to pronounce?
Understandability – Is the domain both easy to understand and does it read well even when written in lower case?
Length – While shorter is generally better, two, three, even four word domain names may be invaluable to your business.
Spelling – Ideally your target audience can spell your name fairly easily.
Expandability – Will your domain name still be beneficial to your company if you expand into additional markets or another country?
Credibility – The credibility of your web presence begins with your domain name. Does the domain convey the image that you want people to identify with your product or service? Does it exhibit trustworthiness simply based on the domain alone and avoid excessive hyphens and numbers – i.e.: NewYorkHotels.com vs. GR8-NewYork-Hotel.info. Does the domain also avoid unnecessary add-on words like: online, website, world, site, web, net, home, live, llc, corp, zone, hub, your, etc. Is the domain name worthy of being backed by a legitimate business? The right domain used in marketing and even as an email address (Bill @ ComputerHelp.com vs. BillsComputerHelp @ hotmail.com) goes a long way in establishing credibility and professionalism for your business.
Relevant Keyword(s) – Does the domain contain relevant exact match keywords that are commonly searched for? Keyword rich domains pertaining to your business are easier to rank at the top of search engines and significantly help with both search engine optimization (SEO) as well as driving targeted leads to your site. The right domain(s) can significantly decrease or even eliminate some marketing expenses and pay per click (PPC) advertising campaigns.
Brandability – Does the domain name have a high impact visibility that you can build an identity around? How does the name look in print advertising (newspaper, magazines, brochures, etc.) and outdoor advertising (billboards, kiosks, etc.)? How does the domain look and sound when broadcast over television, radio and the internet? A great brand name is both memorable and also creates a link between the brand and the company behind the brand. Once established, it will drive repeat business to your company and it may even be the only reason why your customers choose to do business with you versus your competitors. A keyword rich, targeted or generic domain name can often times be branded itself and when not used for branding purposes, it can help to create, protect, support and drive traffic to your brand by connecting what you do or the product or service you sell with your company name: i.e. K-Swiss and TennisShoes.com
Investment – The scarcity of premium domain names as well as the rapid pace at which internet usage is growing continues to increase the value of domains. Acquiring a domain name that represents your industry, your product or your service can be a significant asset to your business. Few business investments have as much of a lasting impact as the right domain name. Effectively utilizing a premium domain name is like having a tireless salesman working for you around the clock without pay.
Competition – One of the most important advantages to owning the right domain is to keep it away from the competition. In an increasingly difficult economic climate it’s important to seize every advantage possible and be aware that even an undeveloped domain can be a significant asset simply because it’s not being used against you by your competitors. A developed keyword rich or generic domain containing your industry, product, or service will make it much easier to rank in search engines which will increase the effectiveness of your marketing and force your competitors to spend more money on advertising to compete.
Make conditions dependent on your will rather than your enemy’s.
Make everything according to your advantage.
Be prepared for the enemy’s strengths.
Do whatever you can to make your opponent weak and vulnerable.
Rely not on the likelihood of the enemy’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that you have made your position unassailable.
Attack your enemy where he is unprepared, appear where you are not expected.
– Sun Tzu
Targeted Traffic – Not all traffic is created equal. Suppose you own a real estate brokerage in Portland, Oregon. Imagine the highly targeted leads that a domain like PortlandRealEstate.com or PortlandHomes.com could provide month in and month out. Targeted traffic from a keyword rich domain relevant to your business is invaluable as it translates into a much higher conversion rate and lower marketing expenses. As projected internet usage in 2020 is expected to increase by nearly three times what it was in 2010, it’s important to attempt to acquire the domain(s) that are right for your company today.
Extension – The first universally accepted and most valuable top level domain (TLD) is dot com. If you have a website most people will assume that it‘s a .com so try to acquire it whenever possible. Research has shown that any other extension will inevitably leak traffic to the .com. Typing .com at the end of a domain name is a hard habit to break!
Cost – Too many people misunderstand the value of a great domain. Why would someone spend thousands when they can register a domain for $10 at Godaddy or eNom? Why would a company spend 5.1 million to purchase Toys.com? Because some domains have the attributes of some or all of the criteria listed here and some have none. Toys“R”Us realized that the hundreds of thousands of highly targeted visitors that a premium domain like Toys.com could bring to their site on a monthly basis justified the purchase price because they calculated that the net present value (lifetime value) of each new customer gained will more than make up for the initial cost of the domain. They also realized that the marketing expenses to acquire those customers would go down drastically and they would also have a one-of-a-kind asset that could later be sold if necessary.
99% of the time, a domain that is currently available to register has relatively little if any value, except to the person who registered it. Yes, it’s extremely important to register your company name, but don’t expect to be able to resell it or that it will provide you a big boost in search engines unless it meets most of the criteria listed here.
With domain names you get what you pay for. Anyone can purchase 10 cardboard boxes, stack them up, cut out a front door and call it a house – but it is unlikely that you will ever be able to rent it, sell it, or generate income from it no matter how hard you try.
A bad domain is similar in that it significantly decreases your probability of success. Depending on the domain name, $10,000, $100,000, or even several million dollars may be a small price to pay for an asset providing so many benefits. A premium domain name is a one-time purchase* which keeps giving back year after year.
Fat City Properties is here to assist you whether you are interested in a domain we own, or if you would like some help acquiring a domain from a third party. Contact us with any questions or visit our consulting page for more information.
*Yearly domain name renewal fees are around $10 per year.