The Dangerous Myth of Domain Type-In Traffic

I’ve always believed that ‘type-in traffic’ for undeveloped keyword domains was vastly over-exagerated. Now I have the figures to prove it.

For the unitiated, Wikipedia explains ‘type-in traffic’ as

…visitors landing at a web site by entering a keyword or phrase … in the web browser’s address bar (and adding .com or in a mobile browser address bar … rather than following a hyperlink from another web page, using a browser bookmark, or a search-box search.

Given some success stories, you’d be forgiven for concluding that premium, keyword domains are worth buying for the tsunami of type-in traffic they’ll unleash on your site.

Why would the domain industry perpetuate the myth of type-in traffic? It’s one of the pillars on which domainers regularly price domains, ergo it helps inflate prices.

While I’m not saying for a moment that there’s no such thing as type-in traffic. But I am saying that the volumes we are talking about for a typical keyword domain (.com or ccTLD) are laughable.

How Many Domains Get Type-In Traffic?

1,822,377 domains are parked with Sedo, says DomainTools.com as of 8 July 2009.

Sedo’s list of ‘high traffic’ domains parked with them shows Sedo parkings top performers.

What percentage of parked domains get serious traffic? Here’s a clue: think of your favourite very small number… and then halve it.

Nope, not even close.

Sedo’s most recent stats show a mere 25 domains get traffic in double digit per day. By the time we hit domain number 26 in their rankings, we’re in single digits. See for yourself:

sedo

(Source: Sedo.com)

So 0.001% of domains parked with Sedo get double digit per day traffic. Or to put it another way, 99.999% of domains parked with Sedo don’t hit double digits daily.

It gets worse. The traffic figures in this table are not exclusively type-in traffic:

The “Hits” indicate the average number of times per day the domain’s parking page was viewed through direct browser type in, from an old external link, or from a search engine query.

Is Type-In Traffic Laser-Targeted?

For developed websites, that is often the case. In 2005, WebSideStory research found the conversion rates for different sources of traffic to be:

  • Direct Navigation (Including bookmarks) – 4.23%
  • Search Engines – 2.30%
  • Links – 0.96%

Users typing in domains for established sites are more likely to be repeat visitors, for example, so more likely to convert to a sale.

But is the same true of type-intraffic to undeveloped domains? I’ll wager not. Let’s examine some of the domains in Sedo’s High Traffic Domains list and make an educted guess why they get traffic.

Here are the first five traffic domains I checked out:

  • Teach.co.uk: Users mistyping Teach.gov.uk, the UK government teachers’ portal.
  • RSS.com: Former corporate brochure site with 1000s of backlinks.
  • Jewel.com: Users looking for the huge US singer-songwriters official site
  • Belly.com: Users looking for the Canadian rapper’s official site
  • CX.com: Users looking for ConsumerXchange at CX.org

Does this sound like the tightly-qualified traffic we hear so much from domainers? Nope, it sounds like junk traffic.

Even some domain industry insiders don’t drink the ‘highly targeted traffic’ kool aid. A senior staff member from a major domain company recently admitted to me that the golden age of domain parking was long gone. Another was recently quoted (on condition of anonymity) saying…

“The amount of traffic across the industry would be roughly 70% typo and the remainder from generic.”(Link)

My theory? Domain parking revenues are on the slide is advertisers are wising up to measuring the performance of traffic from different sources.

I love premium domain names, and there are lots of reasons to buy them – for branding, investments, avoiding Google’s sandbox etc.

But type-ins traffic? Let’s get some perspective, people.

How To Earn A Living From Domain Parking

Domains (.COMs) cost around $7 per year to register in bulk, so need to earn $0.02 per day to cover costs. Anything extra is profit.

Clickthrough rates on parking pages are high – up to 30% are reported – so let’s say you get 31 visits/month earning $0.10 per click at a 30% clickthrough.

Our hypothetical domain grosses $11.16/year parking, less our $7 registration fees = $4.16 profit/year.

You either need:

  • 3275 domains getting low-level traffic (eg, earning $4.16/year profit) to meet the US Federal minimum wage (on a 40 hour/52 week basis)
  • Domains in high value niches (eg, real estate) to squeeze dollars from a trickle of traffic
  • Super-premium one word .COMs or country-specific domains (eg, Cameras.com)

But X Earns $1000s From Type-In Traffic…

Is it possible to make a living this way? Yes.

I have one friend who could live off the type-in traffic he gets from one domain.

Jeff Libert – AKA WebmasterWorld moderator WebWork – gave a stellar talk at PubCon once on the topic of generating high-value legal leads from generic keyword domains.

And I don’t doubt for a moment that Rick Schwartz might earns $300/day parking candy.com.

Marchex, a public company, have based their entire business model around owning premium domains with direct-navigation traffic.

But are these results typical for keyword domains? The answer is no. Joe Schmo’s two word keyword domains are going to struggle to cover their registration fees – let alone lunch! – with the money earned from type-in traffic plus domain parking.

The figures aren’t much better if we develop our hypothetical domain into a site. 31 type-ins per month = 372 visits per year. Unless you are operating in super-competitive niches you can probably buy 372 visits via AdWords for less than a keyword domain priced at 5-10x annual parking revenues.

Why Parking Revenues Are A Meaningless Metric

Parking revenue figures are regularly trotted out by domain owners to justify pricing. And yet they are utterly meaningless for retail domain buyers.

Even a premium domain like Jet.co.uk – perhaps one of the top UK travel domains for sale today? – fares little better for traffic. Let’s assume make a few assumptions:

  • Jet.co.uk gets c. 8,400 visits/year on the figures published by Sedo.
  • Jet.co.uk could sell for $100k in a down market (a similar 3 letter .co.uk travel domain, Fly.co.uk, sold for $175,000 to Doug Scott’s ASAP Ventures last year).
  • We want to recoup an investment over five years.

Let’s crunch the numbers:

  • 8400 visits a year = 42,000 visits over five years.
  • $100k for the domain = $2.39 per visitor.

Bottom line: the cost of most keyword domains in most industries cannot be justified by the traffic the naked domains get.

Are Generic Domains Massively Overvalued?

I own hundreds of domains, and have just spent $XXXX on a one word generic domain a few days ago.

Keyword domains are unbeatable for many reasons: branding, user trust, search rankings (users link with the domain as the anchor text), existing backlinks, exact match ranking

But I hear the ‘type-in traffic’ myth pedaled time and again to prop up la-la-land pricing. Domain owners peddling these lines calculate prices using two variables: ‘wishful thinking’ and ‘herd mentality’.

British and American readers will spot similiarties with the housing market, while students of economics may recall the concept of ‘manias and bubbles’ in market psychology.

Don’t get hoodwinked with the fools gold of type-in traffic. For most keyword domains, it’s all but invisible to the human eye.

Hate mail to the usual address.

PS. Buy lots of fresh domains? Check out my Firefox extension, Domain Lookup. It helps you find keyword domains while browsing the web, and integrates with 60+ top domain registrars.

Futher Reading

 

Comments

  1. says

    Hi,

    Its a good article, however I think the data its based on is incorrect (Sedo’s cock up not yours) and therefore its flawed.

    From SEDO:

    The “Hits” indicate the average number of times per day the domain’s parking page was viewed through direct browser type in, from an old external link, or from a search engine query.

    I dont think that list is accurate, as a basic search for traffic (which is browser type in, old external link, or serps) in a few default settings gives :
    robbscelebs.co.uk Make Offer – 19,035
    uksingleschart.co.uk Make Offer – 5,312
    corphq.co.uk Make Offer – 2,833
    techstickle.co.uk Make Offer – 2,159

    etc etc , all which ought to be on the ‘high traffic’ section but are not. I realise this is comparing a monthly traffic v daily traffic stats but even the crap names above would still show :)

    Switching my search to .com:

    er.com Make Offer 2 27,700

    That would be in the top two / three at least. I am sure if I drilled down deeper there are much higher trafficed names on there as well.

    All data sourced from Sedo – so something is not right somewhere, and my guess would be with the Sedo ‘traffic list’ as quoted.

    As for type in traffic, I have a good generic that gets me an extra half million ‘free’ visitors purely from typein traffic, cost in PPC terms would be many thousands of pounds :)

    I do agree that parking rev is a meaningless metric, but that is because people should not be basing a generic purchase on that alone as a decent domain name has a much wider ‘power’.

    Cheers,
    Rob.

  2. Richard Kershaw says

    @Rob – Was looking for similar stats via Sedo’s search, but the domains I pulled up with traffic weren’t parked with Sedo.

    My figures were calculated from domains parked with Sedo (as opposed to domains just listed in Sedo marketplace).

    I agree, the examples you mention should appear in Sedo’s High Traffic parked domains list, so looks like their figures may be off.

    Buy even if you take the figures as order-of-magnitude correct – that a mere 0.001% of parked domains get volume of type-in traffic – the numbers are rather startling.

    As mentioned in the post, I know/know of various people with similar stats toe the example domain you mention. But my point was rather that the % of domains which fall into this category is relatively very small.

    Of course, that means that the market price for such a domain with ‘real’ traffic – the cameras.com of this world – is that much higher.

    Completely agree that there are many far, far stronger reason to buy generic domains aside from parking revenue.

  3. says

    Exactly right Richard

    We own lots of domains including http://www.fly.co.uk and have loads parked but the only reason we park them is we have not got round to developing them. Most make absolutely nothing…even good generics as you state get very little type in traffic.

    But a nice domain will get loads of type in if you actualy develop it even slightly developed.

    Doug

  4. Paul says

    I think Sedo’s High Traffic parked domains list only include domains for sale. Many people simple use sedo to park their domains. Listing them for sale, would hurt the CTR on their domains.

  5. Richard Kershaw says

    @Doug – Not often you hear anyone say that in public about upmarket domains. I agree there are many, many reasons to buy generic domains… but I roll my eyes when sellers try to tell me that the domain is worth X ‘for the type-in traffic alone’.

  6. Richard Kershaw says

    @Paul – You might well be right, although I note that’s not what Sedo say on page.

    I suspect the numbers will be similarly shocking; Sedo claim to have 11,500,000 domains for sale.

    If 1% are also parked with Sedo, the number with double digit daily traffic is still approximately 0.02% of inventory.

    Interesting comment (“Listing them for sale, would hurt the CTR on their domains.”), could you elaborate further?

  7. Paul says

    I only have a small number of domains parked at Sedo but I noticed that when I delisted them for sale, I got more clicks.

  8. Sir Edward says

    If the value of type-in really is a “myth” (still not sure how it’s “dangerous”) then why did Verisign think they could sell their failed lookup data in 2007? If direct navigation traffic is “negligible”, then surely the sale of this data would not be so controversial.
    Why were they stopped from doing so?

    ISP’s sell data that includes failed lookups.

    I think people are typing all sorts of nonsense into their address bars. Nonexistent domains, bogus tlds (there was in fact a CAIDA study on this years ago), strings missing tld extensions, URLs with illegal characters, and who knows what else. Just look at the amount of typo traffic we keep reading about. Think about the portion of other “typos” that must never find a host. I think this is all “quality nonsense”. It has value because it shows us what people are looking for.

    I agree that generic keywords do seem to have more value than just current traffic (if any). They are memorable and easy to type. And there are only so many of them. It is like owning a piece of language.

  9. Ed says

    OpenDNS sustains a business on type-in traffic alone: failed lookups (redirecting NXDOMAIN to parked pages of ads).

    ISP’s are doing it too. Why?

    Verisign tried to do it in 2003 and was threatened with a class action suit. Then in 2007 they tried ot sell the NXDOMAIN data, and again were stopped.

    The amount of typed-in traffic is not significant??? Is this what you are saying? Then how do you explain the above?

  10. Richard Kershaw says

    @Ed –

    >I think people are typing all sorts of nonsense into their address bars. Nonexistent domains, bogus tlds
    >(there was in fact a CAIDA study on this years ago), strings missing tld extensions, URLs
    >with illegal characters, and who knows what else.

    You hit the nail on the head: “all sorts of nonsense”. Does this sound like quality traffic? It ain’t people typing balletshoes.com because they want to buy ballet shoes.

    >still not sure how it’s “dangerous”

    If webmasters buy aftermarket domains on the promise of non-existent quality traffic, I belive dangerous is a fair description.

    > If direct navigation traffic is “negligible”

    I said that type-in traffic was non-existent for most generic domains, not that direct navigation traffic was negligible.

    >then surely the sale of this data would not be so controversial.

    That simply does not follow.

    >Why were they stopped from doing so?

    Since I don’t work for VeriSign, I am not in a position to say so.

    >The amount of typed-in traffic is not significant???
    >Is this what you are saying?

    No, that’s not what I am saying. I am saying that type-in traffic for a typical quality undeveloped domain is negligible.

    I have no doubt that type-in traffic for – your words – ‘all sorts of nonsense’ is enormous.

  11. says

    I think it’s about time someone said what you have said in this article. I visited a domain name conference over a year ago and all the big names were there. The hype about domain names is very real and I think that a lot of domainers are now realising that parking is in some ways at the end of its life cycle.

    I’ve been domaining since 1995 and the one thing that I have told everyone that buys a domain name is that you must develop the domain name and not park it if you want a real return on your purchase.

    I prefer GEO targetted domain names and I am currently making real living from concentrating on this area, and it’s not parking them. In brief, this is how it works:

    I bought 15,000 geo targetted domain names. The domains look like this, http://www.PlumberLancashire.co.uk I then built all the websites, completed SEO on them and got them to the first page of Google using tried and tested SEO methods and without using naughty tricks etc. I believe it was right to get the websites to the first page of Google for longevity and not a quick hit.

    I rent the websites including the domain name and a full website with a content managment system to in this case a Plumber that is based in Lancashire. The cost is less than a mobile phone bill each month and the websites get good local traffic that turns into leads and business. This process has taken many years to put together and because of it I have over 5,000 websites on the first page of Google and Yahoo.

    I know what you sceptics out there will say about the time it’s taken and the investment has been high. My response to this is simple, when I enetered the world of the Internet and domain names I came in it for the long term and I knew a long time ago that parking a domain wasn’t the answer.

    Maybe, my apporach is wrong, maybe domaining will change but in reality if making money was as easy as some domainers say we would al be millionnaires and there would be no recession. My approach has now been proven to no one esle but me because I have a living from it and if anyone wants help I’ll do my best to help you.

    I think this article has questioned the domain parking myth and if nothing else it will stop people with just a small amount of knowledge and finance wasting money on domain names that just won’t pay.

    Sean Leigh
    http://www.CleverBusinessWebsites.co.uk
    http://www.SeanLeigh.com
    info@seanleigh.com

  12. says

    I just wanted to say – I have crappy Lithuanian news site TYPO domain and it gets 100 U/D average daily. This news site gets 20000U/D. So I what I think – if you have typo or short domain or other similar domain and it gets TYPE IN traffic – you just check what is best places in your qwerty to make mistake and you will have a winner.
    What you think about : adsence or adsenc – these ones gets tons of traffic.

  13. says

    OpenDNS sustains a business on type-in traffic alone: failed lookups (redirecting NXDOMAIN to parked pages of ads).

    ISP’s are doing it too. Why?

    Verisign tried to do it in 2003 and was threatened with a class action suit. Then in 2007 they tried ot sell the NXDOMAIN data, and again were stopped.

    The amount of typed-in traffic is not significant??? Is this what you are saying? Then how do you explain the above?

  14. Richard Kershaw says

    I’m not saying that type-in traffic is not significant. I’m certainly not saying that type-in traffic is not significant in aggregate.

    What I *am* saying that, for a typical individual domain, volume is low and often low-quality traffic.

    I met a major European domainer recently. His company owns many one word keyword domains which he told me they typically pays 5-6 figures (euros) for.

    I asked how much type-in traffic they get. His answer? 40 visits/month.

  15. says

    “His company owns many one word keyword domains which he told me they typically pays 5-6 figures (euros) for.

    I asked how much type-in traffic they get. His answer? 40 visits/month.”

    …and they keep on paying for them?!

    Personally, I’ve never spent any serious time domaining and it frustrates me when I see a domain that’d be perfect for my site parked for the sake of being parked. I’ve always figured that if a lot of people are doing it, there’s gotta be some profit in it. Interesting figures above if they’re accurate or even close.

  16. Richard Kershaw says

    >…and they keep on paying for them?!

    They aren’t buying the domains for type-in traffic – they are buying them for capital value, which they expect to appreciate over time.

    >frustrates me when I see a domain that’d be perfect
    >for my site parked for the sake of being parked

    Next time drop them a line asking if it’s for sale. And they are parked for the $1/mo parking revenue, not for the sake of being parked – that’ll cover the reg fee over the course of a year.

  17. chase says

    So i’m curious… are ISP’s really allowed to sell the data of failed lookups?

    I’m currently running a campaign of several thousand domains to see what kind of type-in traffic I get. The traffic is coming in. But whether or not the traffic converts is really what i’m interested in. I’ll be sure to report back and let you all know what I find.

  18. says

    Whoa..long and good post. I just can see any good of parking a domain, it’s better to optimize it and generate something from than just parking it there and hope to bank in some cash.I really don’t care if it a typo domain or not, as long as you can avoid getting sandboxed, than it’s good enough already.IMHO

  19. patrick says

    Traffic is under estimated people do not type in urls anymore search is the number to pay attention to,also if you have a generic keyword domain that sells a million dollar item then ten searches a month would be fantastic.
    I think what makes a domain valuable is what it describes and the business behind it,( the four c principal,) you are that business on the web and that is the most powerful branding you can have, i only have generic keyword domains and they all get lots of search but very few direct type in traffic one gets roughly 200 direct type ins but the product sells from 50,000 to 50 million dollars
    aircraft leasing gets hardly any type in traffic but aircraft sell and lease for millions i also own many attorney names all two word litigation copyright patent injury ect. these are the names these companys should own but if they go by traffic it would seem no one visits them.

  20. says

    Great article. It’s actually one of the most informative articles I’ve read on the web about domain name profiteering.

    The tickler about domain names is that you can register them cheap. So you think you can make a profit on each one without any effort.

    The reality is, like Sean Leigh’s excellent post testifies to, you have to develop them a little to make them profitable. This doesn’t actually take that much work if you understand SEO.

    I shy away from 1 page blogs but can put up a five page well SEO’d wordpress blog with some sort of monetization in a couple of hours. By picking keyword rich domains and optimising them a little, I can put up a couple a day.

    Excellent article, though. Exactly what I wanted to read.

    Thanks.

  21. KT says

    Sedo was completely useless for me. I had my domains listed with them and parked with them for about 3 years. Not one lead and during the same time I sold 3 or 4 domains all well above $5000 by buyers simply contacting me directly using the email address for the domain owner. I was averaging about $3 a month in parking. I got fed up with them for their stupid limit rule for listing domains over $10,000. I took all the domains away and took parking to my godaddy reseller account. Last month they made $63 in PPC. That is about 20 times more than Sedo. I am upset that I lost on the extra money for 3 years but happy that I realized and stopped getting screwed by sticking with sedo. I am so mad at Sedo that I am spreading the word about my experience with their lackluster parking revenue.

  22. says

    I think people are typing all sorts of nonsense into their address bars. Nonexistent domains, bogus tlds (there was in fact a CAIDA study on this years ago), strings missing tld extensions, URLs with illegal characters, and who knows what else. Just look at the amount of typo traffic we keep reading about. Think about the portion of other “typos” that must never find a host. I think this is all “quality nonsense”. It has value because it shows us what people are looking for.

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