Once upon a time and a conversation with Steve Forbes……

Once upon a time I was the only public voice of domains. I was the first to share what I had learned about domain names, type-in traffic, value and why domains would become so important in time. How domains would appear on every ad, brochure, billboard. I would DARE to suggest that the domain name would be more important than the 800 number. The HOLY 800 number. The LIFELINE of business in 1996. I was called every name in the book for saying wacky things like this out loud. To that I added that “Getting a great domain was a unique opportunity in time.” “Domains would go up faster in value than any other commodity ever known to man.”

Last month Steve Forbes corrected me when we met at T.R.A.F.F.I.C.. He said domains are not “Commodities” because they are UNIQUE!! They are “Collectibles”.  They are “Virtual real estate.” They are “Many things” but they are not commodities. So I thank Steve for correcting my adjective. I thank him even more for realizing how many facets a domain name represents. Maybe others will comment what it meant to be in the company of such a figure the likes of a Steve Forbes. Chatting with one of the smartest people on the planet is priceless. Chatting with a great economist is priceless. Talking with one of the great analysts of our time is priceless. But finding one person that represents all that and has COMMON SENSE and life experience and a great sense of humor is more than priceless. It was an enriching experience that will pay dividends for a lifetime. It also demonstrates just how far domain owners have come in the past decade. I’ll talk more about my time with him in a future blog post. I am still letting it settle in. I still need to review the audio CD to listen once again to every word of his presentation. It was truly magnificent and so much applied to what we are facing in the years ahead based on what others have been thru in history. So much is common to all business on Main Street to Wall Street.

To this moment folks fail to understand what a great domain with type in traffic represents. So let’s look at it from a different angle. To do that let me rewind back to 1999. The following was written before the collapse. It is still on the net on one of my oldest sites. But the handwriting was already on the wall and the following may be a little silly or elementary in 2007 but in 1999 few had a clue what I was talking about.

From 1999…….

“The net all comes down to “Targeting”. Just like a "Bulls eye" is worth more in darts......a targeted visitor is worth more on the internet. It’s worth exponentially more dollars and that will unfold as our most powerful asset as the net matures. As an example I have one site called ebid.com. The click thru rate on that site is 80x greater than a normal site. All because of “Targeting”. On just 1000 daily hits more than 300 click thru to our 2 sponsors. Of those 300, 1 out of 3 sign up. Thus just as a middleman on 1000 daily hits we were able to make nearly $1200 a day. Just on this 1 site with no maintenance and nothing really to offer other than giving them what they are looking for. 

This is where “Click thru” and “Impression based internet advertising collide. It is my opinion that advertising based on the number of “Impressions” shown and not based on “Clicks” received, “Flat rate” or by “Productivity” is the MAIN reason that so many lose money on the internet. Mainstream advertising rates are based on magazine or broadcast price guidelines and then applying that “Formula” to the net. That “Formula” is flawed and does not work in this medium and the results are the proof. Why pay for 100,000 impressions if NOBODY clicks to go to your site?  Wouldn’t you rather have 25 targeted live clicks? Doesn’t that represent more value?   

If you purchase 100,000 impressions for $5,000 it means NOTHING! It’s the same as loading up a bus with 50 people, passing a casino without stopping and then repeating the process until 100,000 people passed the casino. Then giving the bus driver $5,000 for it. You still have nothing but just WASTED $5000. I guess you may as well collect the $5000 from every business you pass on the trip. They all get the same value. ZERO! The bus driver can make millions!

Compare that with a bus driver STOPPING at your casino and then unloading those 50 passengers at the front of your casino and then holding the door open so that they can enter. Those 50 are already more valuable than the 100,000 and if you had to pay $10 each you would still have $4500 left to buy more. So even if I charged $10 a click thru, that $500 is a BARGAIN compared to spending $5000 for nothing!!

When a website spends $5000 and gets nothing he is not apt to try it again. But if he spends $50 to get something, he will want more and give more dollars. It becomes a win/win situation opposed to a win/lose situation with the website the loser every time and the guy selling the ad space the winner every time. I think the best single day on the Internet will be the day that the BUYERS of impression based advertising wake up and realize that their web businesses really are profitable but their profits are being eaten up by this obscene way to advertise. Impression based advertising is the root of all evil on the net. The website profits are there, just being swallowed up by the sellers of this flawed advertising scheme. Thankfully that is beginning to change. It’s not rocket science, just simple common sense.

That brings me to the next point which is while others depend on Search engines for traffic or buying traffic from a 3^rd party, we are actually self sufficient because we get our hits via “Type ins” to the browser bar. The result becomes the most potent and targeted hits anyone on the Internet can get. Our sites become destinations. 1 of our hits can easily be worth 10 regular hits or even 100 regular hits. So my 100,000 daily visitors really have the “Buying power” of over 1 million people!! That’s the result of an internet bulls eye.

Add that to the fact that our traffic grew over 50% just in 1999. Not because of any work that I have done, just the simple growth of the net. I saw things that NOBODY can see. After Christmas season in 1998 our overall traffic grew by 10%. That was more than twice the growth of the preceding 12 months. In the late spring we experienced another 15% growth in addition. Then the biggest surprise of all came in August. As a result of the free computers, back to school, great deals etc……we experienced a 20% overnight jump and those numbers have been maintaining as we go into the 1999 holiday season. I can only imagine at this point what to expect.”

Back to today….

So something written in 1999 based on theory of 1996 has relevance today. You can see it is dated. I use “Hits” instead of “Visitors.”  But much has remained constant. Like Steve Forbes driving a stake thru the IRS I would have done the same to “Impression based advertising.” It was the root of all evil on the net. Saying it then, meant virtually nothing. Saying it today may not result in much more. But it is worth repeating. Repeating because so many failed to consider this the first time around, most have failed to see it the second time around and I am a hopeful person that maybe it will be grasped the third time around.

So once upon a time I was saying much of this by myself. Today I am thrilled to have other voices like Franky, Ron, Owen, Sahar, Michael, Elliot. I only have to use their first names. Everyone in this space knows who they are. If you don’t, what space are you really in? If you don’t know what the hell we are talking about, I suggest you read until you figure it out. But for the thousands that follow these folks and DO know what I am talking about, whether you agree or disagree, I am going to ask for something. I am going to ask everyone reading this to educate just 2 other people by the end of this year. The power of numbers and word of mouth are so powerful, so quick, so strong, there is almost nothing that can compete with it. An organized sales force calling folks all day could not achieve what I just asked for. It is taking the power of so many and spreading it like wildfire. The things domain owners have discovered about traffic has even Google and Yahoo listening. They come to TRAFFIC and they found out things about traffic that really helped them. Things that we discovered about type ins and human nature and traffic that is like gold and traffic that is like crap. The fact that in 2004…..worthless CRAP traffic and TARGETED traffic cost about the same. One would result in no or limited sales the other was full of sales. Sales are the epicenter of everything we do. So success on or off the net revolves around sales. Domain owners are EXPERTS on making more sales. Not all visitors are created equal. Those that figure it out first will get the prize, the others are doomed for failure before they even begin…..and I can PROVE it, right here, right now.

Are you ready?

When someone is standing in New York City and they set sail for London and they end up in South Africa……their mistake did not happen when they landed in Africa, their mistake happened before they even set sail from New York. Their plan and direction were flawed from the get go. It means they did not consider all things. It means they were doomed for failure before they got in the water. Those looking for those mistakes upon landing will be chasing their tales for the rest of their lives. Those that figure out that almost all mistakes happen before they even start, that most mistakes happen during the planning stage or lack of it, will be those that will be rewarded with great success. On the Internet the beginning consists of two things. The website (Mousetrap) and the traffic (The sale). It’s like gas to the engine or electric to the lamp. No spark no sale. No tickee, no laundry. One can’t exist without the other. So while others focus on the crap that won’t show them the answer, your job is to be smarter than that. So how does this all tie in? If you haven’t read each post, you’ll never know unless you do know in which you would just be laughing at ll this anyway. Only difference from 1997 or 1999 is that you will be laughing with me and not laughing at me.

Have a GREAT day!
Rick Schwartz

Comments

[1st time home buyers]

wow congrats on meeting Steve Forbes...not often I hear ppl meeting someone famous

[Sahar Sarid]

Great post Rick. Good to see Forbes understood what you were talking about. He is of course on the money here and we knew it, have been doing it all along. Each purchase is a unique opportunity in time and there are no seconds to the best ones. Candy.com? What is second best? who cares if you own the best one.
So.. what next after domains Rick? How things look 10 years from now? I'm LISTENING! :)

[Howard Bowling]

Having Steve Forbes talk about the importance and value of domain names is akin to having Einstein talk about the importance and value of gravity. Now people realize that they dont have to understand them (domains or gravity) to know they are are important and valuable.

[Dominik Mueller]

Great post, Rick!

What I like about your blog, is that it really is a "time capsule". It shows how right you've been back "in the early days" when you invested money in domains, although most people didn't believe a word of what you were saying. This is interesting from today's perspective, because most people in the corporate world still don't get it. They don't understand that a generic domain name can result in a far better ROI than expensive marketing campaigns. Moreover, domains provide a longer-term return and they should be part of any marketing strategy today.

After all, it's good to see that someone like Steve Forbes understood the great benefits of owning a generic domain and that he spoke out on it in public at TRAFFIC.

[green horn]

rick, tell domainers what
exactly you studied in 1999
to get started in domains?
when you bought porno.com
and put advertising on it you saw thousands of visitors and clicks?were you the first one do do this?

also almost all good domains you talk about are one word domains to get 1k hits per day is unreal...
most domains get maybe 100-150 clicks a month.
another thing..because you have over 1 million clicks you could cut a deal with google or yahoo directly and get paid a lot more per click.
on some of my domains I get 150 clicks a month and get paid pennies, but google charge 2.00 and up for the exact same phrase...talk more about this in the future.
also i'm reading that ppc
click through conversions are now about .2% of the landing clicks and have been falling for the last 2 yrs.internet surfers sre tired of ppc advertising and want real websites...

rick,please educate us green horns some more!!!!
we love you rick...