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August 27, 2012

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Branded Domains vs. Generic Domains

By Dan Warner
COO, Dark Blue Sea & Fabulous.com

What is a user actually looking for when they type in a domain name? Most of the time people are looking for web sites that they have seen on television, heard on the radio, read off the back of a cab, or have been exposed to through some other form of media. All of these are examples of branded domains. 

The purpose of this paper is to provide a discussion piece to compare and contrast the difference between the quality, handling and long term value of branded vs. generic domains. This paper will not discuss trademark domain disputes, customer service issues, or the effects of brand erosion that may be associated with domain use in cases where the domain is not being used by the brand owner. 


Dan Warner
COO, Dark Blue Sea & Fabulous.com

Branded Domains are domains that people type into the address bar because they have heard of the domain before.  Most branded domains are associated with existing business names, products, or popular web sites - which may or may not have a trademark.  However, the userís primary purpose when they type these domains into the address bar is to find popular web sites.  Examples include: DellProducts.com, Yahoo.com, ToyotaTrucks.com, FitnessFirst.com 

Generic Domains are inherently just that, generic.  These domains do not construe any association with any known business entity other than what is represented by the domain itself.  They are typically descriptive in nature. The userís intent when typing them into an address bar is likely to be an expression of searching behaviour, with the view to find or purchase new products or services. Examples include: ConstructionTowerCranes.com, HoustonTools.com, Chairs.com, OnlineGames.com, SeattleBoating.com

Case Study: SonyPlayStazions.com Ė The user in this case study is evidently looking for the popular and well branded Sony PlayStation web site.  If they had typed-in either PlayStation.com or Sony.com they would have been able to find what they really wanted.  For the sake of this study let us assume that the domain would be redirected to a domain parking page instead.  What is the quality and value of this traffic? 

The value of this traffic is directly aligned with how closely the content provided on the results page is to the userís intention of finding information on Sony PlayStations.  If the content on the page is directly related to Sony PlayStations (Branded Product Use) then the quality of the traffic and conversion for advertisers is going to be extremely high.  There is no better use for this traffic than to sell Sony PlayStations or associated games and accessories.  

If instead the content served on the page is representative of Sony Products or Sony Corporation (Branded Industry Use), then the quality of that traffic will be reduced compared to the most appropriate use.  In reality, the less aligned content has impeded the intended buying behaviour by offering something less specific to the user. 

Offering Nintendo or Xbox (Competition Products) content on the results page would also be a distortion of the userís intent.  Although the products are loosely aligned with the userís intent the content is not what they were seeking.  What if they already own a PlayStation and are really looking to buy a game?  How likely is it to sell them a Nintendo or Xbox if they already own the latest PlayStation?  

What would the effect on quality be if the domain parking page only had advertisements from other electronic companies (Competitive Companies) on it?  The resulting advertisements can cause brand confusion and are not strongly targeted.  Of all the examples given, this solution is the least aligned with the userís intent and is likely to encourage the user to shut down the browser and try something else. 

There are a thousand other ways to handle this traffic that are even less appropriate, and consequently would generate even poorer conversions.  They include showing generic landing pages, adult, or irrelevant content.  None of these are appropriate and the brand owner, in this case Sony, would be the most effective and less-offensive to the user in the use of the domain. 

Traffic Quality Ė one of the common things that has been confused when discussing branded domains is the difference between the domain asset value and its traffic quality.  If the traffic from a branded domain is used appropriately the quality of that traffic can be extremely high.  

When users type-in a branded domain into the browser address bar, their intention is to find a specific branded web site that they have already heard of.  In the case of typographic or spelling errors of popular brands or web sites Ė the intent is still to find a specific web site - other than the web site they were directed to.  In the case of typographic error domains the intent was most likely to find the correctly spelled domain name and as such the intent is misaligned. 

Acronyms are an interesting case because there is often more than one company, product or service that is represented.  This confusion also tends to create a considerable amount of traffic, but how targeted is that traffic?  What does GSN.com mean?  It could represent: Genetic Services News, Global Shopping Network, or Golf Shot Nerds.  The reality is it could mean anything and in-turn the traffic could relate to anything as well. This traffic by its very nature needs to be requalified. 

The rule: If the userís intent is successfully aligned with advertiser content that addresses the userís specific needs - then the traffic quality of conversion will be high.  In contrast, if the content is not what the user is really looking for - then the traffic quality is reduced.  

In the case of trademark related traffic, it is most likely that the trademark owners are the most qualified to convert this form of traffic.  In fact, in many cases this traffic is already sold back to the trademark owner via advertisements in the search engines. 

Branded Domain Asset Value Ė the domain sales aftermarket places a high importance on the value of the revenue which domain traffic generates.  In many cases the only valuation considered is a revenue multiple of the domain traffic revenue.  Of course, this is a very poor way to value domains.   Traffic is conceptually only the rent collected from the land, as domains represent the land of the internet.  When valuing real estate buyers do not just look at the road traffic near the land they are considering buying. They also look at the neighbourhood, previous use, and what the zoning is - which are all reflections of the potential future use of that land.  It takes an exhaustive and lateral view to understand the true value of a domain, and traffic revenue is only one of the key criteria. 

The greatest value attributed to a domain is not its traffic revenue; a domains greatest value attribute is its brand value.  Respectively the problem with the sales value of branded domains is that they generally have very confusing or poor attributable brand value.


Editor's Note: If you missed Dan Warner's first article for DN Journal on Traffic Targeting and Wastage, you can still catch up by reading it in our Archive by clicking the link above.

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