Confustion Factor 50 And Extra Ad Costs and Profit Losses

Morning folks!!

The "Confusion Factor" that is coming has a dollar and cents cost. Or Dollars and SENSE!

So let's draw a line in the sand where transformation to an Ortrich occurs. (There goes Rick with another bird)

Yup, that's right. Those that think there is NO EXTRA COSTS in promoting, marketing, branding, etc for .whatever are Ostrich's with their heads in the sand.

So The ONLY discussion is the percentage. The FACTOR!

Now if we go by Mr. Johnson with Overstock, you will see that would be a factor of 61%.

Well Rick, what does that mean?

Well for a simpleton like me it means that your advertising costs are actual cost multiplied by a 61% invisible tax. Because 61% of the folks went to the wrong place. So it costs more to get the same traffic when 61% get LOST or confused.

Now in time (assuming a company survives that long) you can cut that number by half. So now the invisible tax is only 30%.

But that factor does not stop there because there are other factors at play.

Where did that 61% go?

Well if you have a competitor at the .com, he is a happy camper because his ad costs just went down by as much as 61%. So not only are you feeding your competitor, you are giving him great leverage and buying power at YOUR expense. You are helping him grow. Helping him find better help and able to pay more to keep that help. You are basically doing one of the stupidest things I have ever seen in all the years I have been in business. And ignoring over a DECADE of evidence.

Don't be an Ostrich!

But I am thrilled many disagree. I wish them great success on whatever counterpart of my or your .com they choose to build their empire. They will each empower me/you and that factors in to the equation. Factors. There is more. This only touches the most visible elements.

Content will determine success. After 20 years folks are more sophisticated. I will admit that the extension will have little to do to deter folks from doing business with you if and when they actually find you. Attention spans are very short. If you are willing to have you competitor sitting at your front door and greeting each person before you do and in many cases diverting them to his store, then one of us is missing something. Likely you and your customer if you are an end-user.

I could write about this all day long because there are so many pitfalls and great opportunities to profit from idiocy. That is even before we talk about just how undervalued domains still are. When they rise to par with the prominence and prestige of a real world counterpart, you will see an explosion in prices. I believe gTLD's are the gun powder for that explosion. The "Confusion Factor" will be the fuel for that explosion. Patience is still the key ingredient.

Any business that has a GAPING 61% leak will either RETHINK their strategy like Overstock.com with Overstsock.co and Wantable.com  with wantable.co or GO OUT OF BUSINESS! No entity can survive a 61% loss. No entity could survive a 50% loss. No entity could survive a 40% loss and few could survive a 30% loss. And if you are a happy camper because you only lose 25% of all your traffic and all your business and pay 25% more for advertising, then you too will soon be out of business or WORKING FOR FREE FOR YOUR COMPETITION!

Overstock.com FIXED their problem the day that they stopped promoting Overstock.co.

Wantable.co FIXED their problem the day they acquired Wantable.com.

End users can fix their problem before there is a problem by understanding what the "Confusion Factor" is and why it should be avoided. The BEST and maybe ONLY way to get on a .whatever and succeed is to own the .com because then at least your leak factor is ZERO because you leak to yourself and not your competition.

Now there will be HUNDREDS of .whatevers that will disagree. Their employees will disagree. So the NOISE is about to be overwhelming and while many will try to discredit me, they will be discrediting themselves as the EVIDENCE mounts.

Rick Schwartz

 

 



8 thoughts on “Confustion Factor 50 And Extra Ad Costs and Profit Losses

  1. Domenclature.com

    I agree with the post, except I believe the leak will be more than 61%, because Overstock was a known entity that was advertising the dot co in a rather wicked way, so that made the leak a moderate 61%. These .whatever people will not be as clever as Overstock, so their leaks could be in the 90’s. :-)

    Reply
  2. ivorytrader

    it really just comes down to the simple matter of… is it easier to remember one thing or two things? but it still amazes me that so many people still don’t get that.
    ‘course many of those registries may be profitable… it’s just the domain investors and end users of those domains who will be screwed…

    Reply
  3. UFO

    Fact is that the usage of .com is so standardised and synonymous with the ‘big players in the industry’ that any half wit SEO knows that it’s easier and cheaper to buy the .com than try to re-educate the whole of society.

    It’s really that simple.

    CEO’s should realise that their advertising can be ‘hip and funky’ to gain interest and so forth but it’s not a great idea with the thing that matters most, the identifier that connects them to the cash register. DON’T CREATE NEEDLESS CONFUSION.

    Reply
  4. asd

    I built a cityguide on a .org that was/is very successful.
    The .com was sold to someone locally four years later who thought they could beat me because they had the theoretically better domain name.

    They failed pretty bad, largely because our clients were already working with us and didn’t have the same internal monologue that domainers have.

    I don’t know how this would work on a .garbage, I definitely wouldn’t have tried it on anything other than a .org, but it worked out fine and today is worth about a grand a month in recurring, local ad revenue.

    Reply
  5. Josh

    There’s a key on the Droid and iPhone/iPad keyboards that says “.com” so you can quickly add it. That pretty much says it all.

    Reply
  6. UFO

    asd – content will beat an extension esp where its informational based as readers are less worried about form over substance. However if you are a commercial branded entity then you really want to look like a serious contender and not some jonny come lately….

    In theory the .com could slowly soak up your traffic and if they were ‘all things equal’ to you in ability and content they’d slowly role you over, but their not and customers are looking for content. Also, users trust information more from .org’s…. think about it. So it helps in a kind of way.

    Reply
  7. DonnyM

    The best opportunity is coming near. I could be wrong but .com will take a short-term hit for about 1 year I think values will go down because .com owners will start selling into the news that all these new extensions will hurt the .com extension. It is happening right now and will continue maybe for another year.

    You’re going to have 3 companies give away domain names with hosting, website and all that shit for nothing. Most of these extensions are going to be given away.

    All these new extensions are like one bad stock that has issued 50 billions shares and .com holds the the preferred shares. Dilution is going to kill everything. It makes everything worthless except the preferred shareholder .com.

    Reply

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