Is Direct Navigation Too Expensive?
High domain prices might make purchases for direct navigation too costly.
At an entrepreneurs’ retreat in Mexico earlier this year, I stumped regarding domain names and how entrepreneurs can use them to their advantage. One of the topics was using generic domains for “direct navigation”. For example, an entrepreneur who sells sports equipment might use BaseballBats.com to direct targeted traffic to his site.
One of the entrepreneurs in the room was a successful affiliate marketer. He uses Google ads, SEO, and other channels to deliver leads and sales to clients. He’s good, too. His modest firm pulled in many millions more than even the best individual domainers last year.
I asked him point blank: Do you use direct navigation domains in your business?
“No,” he replied. “It’s too expensive.”
He pointed out that the cost of generic domains is so high, that it would take many years of traffic to make it cost effective compared to buying search ads. He could spend on Google ads for many years ahead of making up for the difference in cost. So many years, in fact, that it doesn’t make sense to choose direct navigation.
I agree that this is often the case.
First, we don’t really know if direct navigation converts better than search. I know, I know, there have been a couple studies regarding it. But they point both ways. And it’s really a keyword specific issue much of the time. In talking to another friend who manages millions of dollars a month in online ads, he finds that direct navigation ads work best for very specific topics (such as loans, auto leads) and not for others (computer systems and tech-savvy niches).
Second, I disagree when people use the example of someone buying a boat as justification for a domain price. For example, someone who owns a speedboat domain would say, “If a click on my domain turns into a sale of a boat, then the domain is worth a lot!”
True, but that goes for all types of advertising. If someone clicks on a Google ad and buys a boat, then that click was worth a lot.
Direct navigation can be an notable tool for getting quality traffic. But have domain prices increased too much to make it cost effective?
