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Monday, April 23, 2007

Domain Parking Traffic Conversion Myth

I keep hearing arguments that domain parking traffic is better than search engine traffic. Based on the garbage traffic from parked domains I've seen, I don't believe it. I understand the concept of direct navigation and how someone typing a generic keyword domain like directly into a browser address bar could be just as desirable for an advertiser as someone typing "cell phones" into a search box. However, this is not the kind of traffic I'm seeing being distributed on the PPC advertising networks of the top platforms like Google AdWords and Yahoo! Search Marketing. Since recognizing the distribution fraud that exists on both Google and Yahoo! (sometimes called syndication fraud), I've been reading blogs of those on the other side of the equation, the domainers. I expected to find spammers but have, instead, found interesting and capable business professionals.

The problem, though, is that the search engines' (can we really still call Google and Yahoo! search engines?) lack of transparency coupled with some misrepresented stats has domainers thinking the traffic they're making a living from is useful for those that ultimately pay their wages, the advertisers. It's not. Perhaps it's the search engines, themselves, who are the spammers? This comment from my post about search engine spam bothered me:
Complain all you want, domain traffic converts better than your search engine traffic.

Direct Navigation (type in traffic) 4.23%
Search Engines 2.30%
Internet Links 0.96%
First, my complaint is that Google includes domain parking traffic on its Search network. I don't have a problem with PPC ads being present on parked domains. It should simply either be on the Content network or, better yet, on a separate Domain network. Don't be evil? Not relevant. Just be transparent. Second, the traffic patterns I traced didn't resemble the behavior of a search visitor. It was clear that these visitors were browsing from another site, not actively searching. Not all parked domains are generic keyword domains. Consider this navigation from a (which is run by which is owned by who is partnered with Google) parked domain:

not very direct navigation
Does that look like "direct" navigation? Anyone buying PPC advertising knows that these types of keywords bring the high bids. No, domain parking like this is designed to steer "direct navigators" away from whatever their original "search" intention was and to click on high CPC ads. That's a problem for PPC advertisers trying to buy pure search engine advertising. Would you ever see links like that on a search engine? Nope. But, the search engines are happy to partner with sites that practice this form of spammy direct navigation. Can you see why distribution fraud is the real click fraud?

Getting to the title of this post, this notion that domain traffic outperforms search engine traffic by a conversion rate of 4.23% vs 2.30% had me baffled - until I realized it's simply NOT TRUE. It's either an honest misrepresentation or an outright lie. Not to pick on Sendori (I think they have a useful concept), but their footnotes exposed this domain parking traffic conversion myth:
Consumers who use direct navigation1 actively seek what businesses like yours sell. They are highly targeted and motivated to buy.

Direct Navigation Data

* Direct navigation traffic, converts into sales for advertisers at a rate twice that of search engines. A Q4 2005 study of Web traffic, revealed that direct navigation traffic converts into sales for advertisers at 4.23% of total visits compared to 2.3% for searches performed via the search box at popular search engines.2

1 - Direct Navigation Definition: URLs typed directly into the address bar
2 - "Search Engines ... Conversion Rate", WebSideStory, Jan 30, 2006
Reading the referenced "study" by WebSideStory yields a radically different footnote regarding the definition of direct navigation that had this 4.23% conversion rate:
Direct Navigation: Includes bookmarks and URLs typed directly into the address bar. Also includes e-mails from non web-based e-mail clients and poorly implemented redirects where the referring domain is stripped out or masked.
Hold on a minute! The 4.23% conversion rate statistic is a combination of:
  1. Type-ins
  3. Emails
  4. Redirects
You have got to be kidding me! This is a *completely* useless number. Of course bookmarks are going to have a high conversion rate. The question is what lead to the original bookmark? What percentage of the conversions from this "study" came from bookmarks? This 4.23% conversion rate is meaningless when talking about domain parking traffic distributed on a search engine advertising platform. Let's stop the pretense, ok?

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Blogger Marty said...

I harp on my clients about a avoiding the PPC Ramp Up Conversion Money Pit. This is a useful post.

Sat May 19, 07:21:00 AM EDT  
Blogger Richard said...

Hi Marty. Nice post. I'll link to it here: Avoid the PPC Ramp Up Money Pit

Sat May 19, 08:32:00 AM EDT  
Blogger payperclickblogger said...

Well written post about domain parking and how we (advertisers) feel about it)

To your comment about it belonging on Content...I'd be willing to bet that if Google offered the option for people to "opt in" to show their content ads on domains that are parked...very few people would take them up on it. Probably only a few would test it to see if it converted and the rest wouldn't realize that Google would "default" them into that network anyway (like they do now).

Thu Jun 07, 07:53:00 PM EDT  
Blogger Richard said...

Thanks, payperclickblogger. Yeah, I'm not really sure how advertisers would react if Google stopped stuffing this traffic across both the search and content networks and created a new network. Just like the content network which has both high and low quality sites, parked domain quality varies.

I suspect that genuine, generic keyword type-in traffic would convert very well. Those conversion rates would likely be on par with search ads and advertisers would want that traffic. However, I've seen many nonsense domain names that bring garbage traffic. If Google did create a domain network, site exclusion would have to be functional.

Thu Jun 07, 10:03:00 PM EDT  
Blogger Markus said...

Great analysis - and you're absolutely correct. It's shame so many people take stats at face value and come up with the wrong conclusions.

Tue Jan 08, 05:15:00 PM EST  
Blogger Richard said...

Thanks, Markus. I'm hoping John Battelle will unearth some more useful domain stats.

Mon Jan 14, 11:46:00 AM EST  
Anonymous Ofer Ronen (CEO of Sendori) said...

I agree that the WebSideStory conversion figure does include bookmark visitors who distort the conversion rate. Thanks for pointing it out, we now fixed it on our site.

Nonetheless, there was a separate study by Efficient Frontier which found a similar result. It found higher conversion rates on domain traffic compared to search. Here's the study:

Also, we are working with leading advertisers, and instead of sending domain traffic through a parked page we send it directly to their sites. We are seeing strong results for these clients.

Thu Apr 10, 05:48:00 PM EDT  
Blogger Richard said...

Hi Ofer. Thanks for taking the time to comment. Note the comments by a former Efficient Frontier employee on my post entitled Efficient Frontier Perpetuates the Domain Parking Traffic Conversion Myth. It's not a good case study.

If you can keep your network of domains clean, i.e. all genuine, generic keyword domains, then you'll have a better network than either Google or Yahoo. That would be beneficial for both advertisers and honest domainers.

BTW, nice escalator pitch. ;-)

Sun Apr 13, 02:04:00 PM EDT  
Anonymous Chris Desouza said...

PPC thieves rob more from advertisers than any amount stolen from banks ever...

Thank You Google, Yahoo for the blind eye! You are slaves of your investors. The pimp must be kept happy.

Wed Aug 27, 02:38:00 PM EDT  
Blogger niranjani said...

nice Domain name article nice awesome i registered the Domain name in tucktail.comHow can i make my site to popular among world wide.

Mon Aug 03, 08:07:00 AM EDT  

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