Domain Traffic Spinning Straw Into Gold?

Interesting to hear that SEO blogger Aaron Wall reads Frank Schilling's blog. If you don't know who Frank Schilling is, read this 2005 Business 2.0 article about domainers. Consider this excerpt:

In the meantime, Google and Yahoo are trying to keep the type-in business coming--and execs from both companies are using the Delray Beach conference to court the folks who control it. As the party at Delux winds down, 14 Yahoo executives pile into a stretch Hummer with a few of the domainers, including Schilling, who has an exclusive contract in which Yahoo serves all the ads for his sites. The limo heads 35 miles south on Interstate 95 to Scarlett's Gentlemen's Club. The men kick back in the VIP section, outfitted with plush booths and red velvet curtains.

When the woman in charge of the area comes by and mentions the cost of the booths, the Yahoo crew gets nervous. And in the end, no one wants to submit the $1,000 tab to the expense department back at headquarters. Finally, Schilling pulls out a roll of cash and pays up. Not a big deal for a guy who owns a share of a jet. But considering that Schilling's traffic generated more than 1 percent of Yahoo's $3.6 billion in revenues last year, you'd think one of those guys could have stood up and taken one for the team.

Reacting to Google's new pay per action test, I posted a comment on Frank's blog on this post:

I don't understand why Google doesn't create a "domain network" just like they have a "content network" for AdSense. If the "AdSense for Domains" program only applied to the "domain network" in AdWords, that would create a new level of transparency.

If traffic from parked domains really converts better than search traffic, then this would benefit domainers. Advertisers would opt into the "domain network" and would pay higher CPCs and increase budgets to target this traffic.

I suspect Google hasn't done so and continues to distribute "AdSense for Domains" traffic to both their search and content networks because they know a separate network would not be attractive to advertisers.

He was kind enough to respond and his response is pretty interesting (emphasis mine):

I welcome CPA because it proves to the world what I know about domains. The traffic is "better" than search engine traffic. Google probably won't seperate out domain channel because a lot of it converts at 300% of their search box search. How do you apply 'smart pricing' when Google's own search box is the 100% benchmark? All of a sudden you have domain publishers that convert better than Google.. does Google pay them 300% of bid price? Google makes "a lot" of money from its domain channel.. Your hair would blow back if you knew how much. Domain traffic is like the crazy aunt in the basement spinning straw into gold. Everybody wants one, nobody wants to talk about it. Large scale domain traffic shines the light of truth on the flimsyness of search engine traffic.

I don't think most Google AdWords advertisers realize that when they're buying either search ads or contextual ads, they might actually be buying parked domain ads. This traffic is neither search engine advertising nor contextual advertising yet is incorporated into the AdWords distribution network. Somehow, this just doesn't seem right. As a GOOG shareholder, I'm happy they have this "crazy aunt in the basement spinning straw into gold" but I'd rather they were transparent about this practice. I'm just glad I can block parked domain traffic for my clients when they want to buy pure search engine advertising. Doesn't anyone else find this PPC distribution fraud unsettling?

Tags (byo w/ TagBuildr or the NEW TagMuse tool): adsense for domains, type in traffic, domain parking, parked domains, domainers, frank schilling, aaron wall, seobook, seo blogger, business 2.0, google adwords, yahoo, search marketing, pay per action ads, internet advertising, goog