Quite literally, the average price of a .COM domain name is $2,595, according to a study released last week that analyzed 10,608 domain sales during the first quarter of 2011. That’s useful information for digital marketers to work into their budgets, but more importantly, they should look at the overall value that a domain provides because the return on investment can be fairly substantial.
Domain names are a pretty basic tool in the digital marketer’s arsenal and should be a main component of any campaign, brand management strategy, product marketing strategy, or even SEM or SEO strategy (I’ll explain more about SEM/SEO in another post). However, their importance is often overlooked and can sometimes be cast aside due to the sticker shock of how much the right name costs.
Domains have been sold for $13 and for $13 million, but if you consider the average price, it’s a reasonable investment in the grand scheme of a marketing budget. To put it in a brick-and-mortar perspective that most anyone can understand, $2,600 is roughly the cost of a vinyl sign or display booth, making it a very reasonable investment for most companies.
Another thing to remember is that a domain is an investment, in every sense of the word. Dictionary.com defines Investment as “the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.” The money you spend upfront on a domain will pay dividends in the traffic it helps generate, but it’s also an asset that will appreciate in value over time. According to the same market study that benchmarks domain transactions, the average price of a .COM increased 9 percent from the first quarter of 2010 to the first quarter of 2011. That’s a pretty solid investment when you consider that over the past decade, the Dow Jones Industrial Average and the Standard & Poor's 100 index produced an annual average total return of 4.7 percent and 2.1 percent, respectively, according to a recent article on WSJ.com.
The point is, a proper domain strategy should be part of almost any digital campaign and if it’s not, the cost of a domain should not be the reason why. With a vibrant marketplace where domains are bought and sold daily – while continuing to increase in value – there’s very little financial risk involved. If your business needs change, or if the domain(s) you bought aren’t performing as expected, you can sell them to make your money back. In fact, you could even consider selling a domain that was used for a short-term campaign once that campaign has ended.
We often take domains for granted because they’ve become a part of every day life, but they’re a valuable tool for driving traffic, and in the end, that’s what it’s all about. Short and memorable domains can make your site easier to find for new and returning customers; keyword domains can improve SEO and reduce the money you spend on SEM; domains that define a category can capture natural type-in traffic. With the right strategy, domains prove their value many times over and I’ll go into more detail about how to maximize that value in future blog posts. Stay tuned!
A colleague of mine recently wrote an interesting blog posted about the value of branded top level domains: http://www.fullhouseinteractive.com/connect-the-dots/April-2011/branded-top-level-domains.aspx. The Internet Corporation for Assigned Names and Numbers (ICANN) is accepting up to 500 applications for purchase of top level domains at an application price of $185K. Great way to strengthen a brand, but it may take years for the general public to understand and adapt. People, including me, are used to the standard .com, .net, .org, etc.
The new iCANN TLD cost $185,000 then $25,000 PER YEAR, if more than one person wants the same TLD they have to bid in auction for it thats assuming it doesn't get dragged into a long legal battle in the courts, if you evenutually win then you have to market your business on a domain extension that nobody in the world is aware of.
Cost? You would be a fool to buy one unless you have at least 2 million dollars
For companies large enough to absorb the technical and application costs of managing their own branded extension there could be a lot of advantages. For one, it would really help ensure their customers only go to one of their official sites when they can educated consumers that "if its not .XYZBRAND, its not really XYZBRAND". But most trademarked terms still permit concurrent use by other junior and senior owners based on any one of the several limitations on the rights of a trademark holder, like geographic and subject matter scope, so it will be interesting to see who wins if several companies want the same TLD.
thanks 4 ur article!
fyi:
http://the-internet-market.com/
best,
crytal
Virtual real estate is the new frontier. Interesting article, lots of great information and insight.
.CO domains will be the next big thing. Check out my portfolio for some PREMIUM .CO Domains.
.CO domains are good for redirect links like t.co that twitter has. But I doubt they're ever going to pass any of the majors. (.com .net .org .info .me .biz) But It may, I know lots of domain hosts are touting it to find suckers. But I honestly can't see much of a future, given it's too easy to confuse with .com it's not something you want your customers to be confused about especially if you don't own the .com domain for your company.
That's funny! The only people touting .CO extensions are the desperados that invested all of their money in the scam. And the only reason that Overstock bought in (and they remain alone) is because they were able to acquire O.co ...and have only been successful in confusing their customers. Show me one person who lauds .CO that DOESN'T then try to sell you a .CO domain...as in the post above this one. Sorry!