strategy Using Analytics to Price Domains - Part 4

[Whizzbang]

In the last article in this series I began to unpack the importance of the demand curve for accurately pricing domain names. My experience with domain sellers is that most of them price their domains more by gut then attempting to apply a process. In this article I want to move my line of thinking forward to help sellers more accurately price their domains and buyers know if their getting a fair deal.

I should say out the outset that I’m going to keep everything as simple as possible by minimising the number of input data points and mathematics…..but hold onto your shirt as it can still get a little tricky! Remember the goal is to see if we can create a demand curve for a market vertical and then attribute pricing to this curve. So where to start?

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[frank-germany]

long story short:

keep: game.com
drop: reallyawesomegames.com

thanks Michael
nice graphs


"thank you for all the fish"

 

[Whizzbang]

long story short:

keep: game.com
drop: reallyawesomegames.com

thanks Michael
nice graphs


"thank you for all the fish"

I'm actually less concerned about the two extremes and more interested in pricing domains accurately across the middle spectrum. Making a decision around the two example domains is fairly easy but a domain such as adventuregaming.com is much more difficult. The article was an attempt to address the price for the large bulk of domains that are keyword centric but are actually really difficult to price.

 

[frank-germany]

it would be more helpfull to show your approach
using exactly that domain
adventuregaming.com
as an example to find a BIN

 

[Whizzbang]

Let's take a look at two domains:
adventuregames.com
This domain has a suggested bid price of $0.33 which when plotted on the demand curve would suggest that it should be dropped as there really isn't any demand for the domain. You may still sell it but it will be well below $1,000.

onlinegames.com
This has a $1.96 for a suggested bid price and likewise this places the domain way up the demand curve and well above the $1,000 level. My guess is that it's a $30-40K domain but one of the pieces of work I'm yet to do is to try and fathom out the scale above and below the $1,000 point.....just needs more thought. Like I said in my article I have a suspicion that it has to do with a combination of both the market size for the vertical and also the quantity.....

 

[frank-germany]

thank you Michael

that looks much more like information


Domain Name: adventuregames.com
Creation Date: 1999-01-25T05:00:00Z

I bet they won't sell it for 1k USD

I wouldn't

 

[frank-germany]

http://www.estibot.com/appraise.php...8cd23105079726039fa&domain=adventuregames.com


Average Monthly Search Stats - Exact Match - [adventure games]
Monthly Searches: 249,240
Cost Per Click: $0.70 USD

 

[TRY]

Here's where it gets a bit complicated, adventuregames.com would probably get a pretty good ctr advertising to people that search for "online games", And we know higher ctr means lower costs. It may not get a higher ctr than the exact match but it would probably perform better than most other competitors competing for the same keywords "online games". ...also having the keyword in the url helps but the domain name has to sound good too. For example "doctor chicago" may be a more popular search but chicagodoctor.com is more valuable than doctorchicago.com. I didn't get a chance to read what you wrote, will do that now. Sorry if the post is not clear as i hastily wrote this.

 

[TRY]

Domain name length, Extension, the way it sounds, credibility, all important variables also. I assume you could add the length and extension variables to your formula.

 

[Whizzbang]

Domain name length, Extension, the way it sounds, credibility, all important variables also. I assume you could add the length and extension variables to your formula.

I used the simple approach for illustration purposes in building the demand curve.....there are a LOT of other variables that could be used to create a more accurate representation of the curve.

 

[ecalc]

Glad to hear that your CPC based demand curve was a rough and dirty example. I broke out in hives when it suggested dropping adventuregames dot com. That’s a monster name and for the record, AdWords CPC (U.S.) shows me [adventure games] = $1.78 vs [online games] = $0.57. Not that it matters. If [adventure games] CPC was the infamous “-” ($0.00) I’d still jump on it like a dog on a 3-legged cat.

I doubt that domain aftermarket pricing can be reduced to reliable equations given the foggy state of sales data. Adventuregames dot net reportedly sold for $1500 in 2010. True? Sounds reasonable. Unfortunately many (most?) sales are unreported and reported sales are suspect. The individual investor can trust his/her own sales numbers, period. We all have subconscious supply demand curves running in that gray matter between our ears. If that doesn’t work a simple tactic is to price everything high and ratchet down until cash flow meets requirements or price hits zero.

Thanks for sharing the articles!

 

[Whizzbang]

Glad to hear that your CPC based demand curve was a rough and dirty example. I broke out in hives when it suggested dropping adventuregames dot com. That’s a monster name and for the record, AdWords CPC (U.S.) shows me [adventure games] = $1.78 vs [online games] = $0.57. Not that it matters. If [adventure games] CPC was the infamous “-” ($0.00) I’d still jump on it like a dog on a 3-legged cat.

I doubt that domain aftermarket pricing can be reduced to reliable equations given the foggy state of sales data. Adventuregames dot net reportedly sold for $1500 in 2010. True? Sounds reasonable. Unfortunately many (most?) sales are unreported and reported sales are suspect. The individual investor can trust his/her own sales numbers, period. We all have subconscious supply demand curves running in that gray matter between our ears. If that doesn’t work a simple tactic is to price everything high and ratchet down until cash flow meets requirements or price hits zero.

Thanks for sharing the articles!

Yes, it was a rough example. I plan on doing a lot more work on the algorithms to pricing domains. There are a lot of factors to take into consideration. I've just discovered that for adventuregames.com I did a simple mistake.....I didn't look at the keywords, I looked at the domain itself in the Google keyword tool. This dramatically changed the CPC from 0.33 to 2.39 which means the domain is on the super premium side of the demand curve.....!

My apologies to everyone for this mishap.

 

[mhdoc]

Have you ever talked to the Estibot folks about the algorithms behind their system?

 

[Whizzbang]

Have you ever talked to the Estibot folks about the algorithms behind their system?

No I haven't.....it could be a good idea though.

 

[TRY]

Not to be a downer but I think a pricing tool for domains such as random llll's and lllll's is something feasible. Mostly everything else needs a human component to determine fair market value.

 

[frank-germany]

I did a simple mistake.....I didn't look at the keywords, I looked at the domain itself in the Google keyword tool. This dramatically changed the CPC from 0.33 to 2.39

in domaining the details are to most important things

the fact they even bid on the domain itself,
tells you that this domain is a gold mine

But I am positiv your other information is more profound

 

[ecalc]

AdWords Keyword Planner (AKP) is designed for advertisers not domainers nor domain price bots and there is no guarantee as to AKP accuracy. Search volume and CPC results often require lots of navel gazing.

Here’s one I looked up last week ...
avg monthly searches (U.S.)
[tampa bay jobs] = 720
[tampabayjobs.com] = 4400
That’s a good name but the [sld.tld] search result makes me wince. As user biggie likes to point out, OVT with extension used to be the domainer gold standard. AKP with extension not so much.

One more …
After all these years a domainer subculture continues to dig up reg fee names with type-in earnings. A primary screen is keyword search volume. CPC is gravy. Here are 3 keyword pairs that pass the AKP search volume and CPC test:
avg monthly searches / CPC (U.S.)
[adenosine monophosphate] = 74,000 / $0.96
[adenosine diphosphate] = 1,220,000 / $1.80
[adenosine triphosphate] = 165,000 / $10.09
The matching dot coms are not registered for several reasons but the one I want to emphasize here is that AKP took the silent liberty to base the numbers on matching 3-letter acronyms:
[amp] = 74,000 / $0.96
[adp] = 1,220,000 / $1.80
[atp] = 165,000 / $10.09