Discussion in 'Introductions' started by Dr Harnak Rayat, Dec 18, 2013.
Get into Telematics car insurance that's the future for sure.
I couldn't possibly afford it!
Today? No, they're not 7 figure domains. They were at some point in the past though.
If the Doc doesn't object I'm happy to post a very brief outline of negotiations and actual numbers.
If he doesn't want me to, I won't.
He hasn't appeared to have objected.
my thoughts on this, I have been in this market for the past 10 years and worked with all the largest car insurers in the european market and would have sold my house for it at one point , I did enquire about it like many on these boards a few years ago, it is worth a lot of money but it has lost a good 80% of previous levels which is a shame, EMD have lost ground to brandables and I feel the love still given through large PPC advertising campaigns wouldn't be worth the effort, think of it like a Christmas Tree (how apt) you have underwriters(top of tree) which are like rocking horse shit, they wouldn't touch a EMD and do not advertise(and hate being bothered), secondly you have insurers, these rely heavily on advertising but use Brands i:e, Churchill, third teir are brokers/intermediary who are associated to insurers, and at the bottom of the tree are affiliates who take a cut of the cut of the cut, so profits are thin by this point and PPC would impossible to compete against the Churchills of this world who can undercut you by 80%, so that's my thoughts on this and the market your trying to pitch too.
Mark, some very interesting points there. However, worth considering that if you owned "carinsurance.co.uk" you'd probably end up paying less per click on PPC than ANYONE else for searches on "car insurance". The domain will drive the CTR up, and Google will consequently A) bump you further up the list of ads and B) charge you less per click.
So you could end up in one of the top ad slots paying substantially less for each visitor than any of the other advertisers are. And that gives you an edge of sorts, don't you think?
CPCs are determined by Ad Rank, which is calculated based on Quality Score * bid. Let's pretend carinsurance.co.uk gets a Quality Score of 10 by default because the site built on it is awesome (which obviously might not be the case). It's not impossible for competitors to obtain a Quality Score of 10/10 too (it's not overly difficult to create and maintain campaigns with a QS of 10 on non-EMDs).
The AdWords bonus is minimal (if any), because conceivably any of the competitors can have a similar Ad Rank by obtaining a 10/10 QS, even using a non-EMD. I know a few people that run PPC campaigns for car insurance companies and they're constantly working to maintain their Quality Score. I don't think it's correct to say you can pay less than anyone else per click simply by using an EMD.
I would agree however that clicks are magically attracted to EMDs in paid listings if they're somewhere prominent, above the fold, so that's definitely an advantage. I'd say that's not enough of an advantage for a firm to spend several hundred grand on these domains though.
Overall they're great domains - a marketer's dream!
I was under the impression that AdWords also took CTR into account when determining the CPC, or is that something they no longer do/never did?
EDIT: Found the answer to my question;
"Higher CTRs are good for advertisers too, as they increase Quality Score, which in turn improves ad rankings and ROI"
As far as I'm aware QS encompasses a range of metrics and factors - CTR being one of them. So a high CTR only serves to increase your overall QS, it's not a standalone metric.
I know Wikipedia is hardly the most reliable of sources, but you can read more here: http://en.wikipedia.org/wiki/Quality_Score#Factors_in_determining_Quality_Score
If you think about it, anything you can do your competitors can also do (pretty much) EXCEPT run ads with the same URL.
So if your URL naturally attracts more clicks (because it's the exact match of the main keyphrase being targeted) then you will be starting ahead of the pack.
The point is, you can change domain name and nothing else (well, ok, you're going to have to put the landing page on the new domain name too) and see an instant improvement in your campaign. And that translates directly into cheaper clicks.
Note too that Google themselves put CTR first on the list of factors that affect the QS
I'm not disputing that, I'm disputing the whether or not using an EMD in an AdWords campaign will lead to anyone "paying substantially less for each visitor than any of the other advertisers are".
If the top advertisers are all running a QS of 10, the only factor changing Ad Rank is the keyword bid. Running ads to an EMD becomes completely irrelevant.
Again I'm not disputing the importance of CTR - but you can only get 10/10 on QS, you can't get 11/10. Just because your ads get a higher CTR than your competitors' doesn't meant they don't also have a 10/10 QS. The fact gaining a single point on a QS can lead to a reduction of £5 or more in terms of CPC means most big brands have QS locked down (both in insurance and other niches). I would wager that most of the major brands advertising for "car insurance" have a QS of 10 or close to it due to the high CPC.
Cheaper clicks are determined by your QS and Ad Rank - using an EMD brings with it some benefit, but it doesn't bring with it any guarantees. I appreciate your cheaper clicks argument, but if big brands are already running a 10/10 QS to non-EMDs then they're on the cheapest clicks anyway. Investing six or seven figures in these domains would be a silly idea.
I work with various EMDs and as I said in my last post they usually bring higher CTRs than other non-EMDs - but aside from that, QS determines how much you pay per click, not the quality of your domain name or the fact it draws a marginally higher CTR than the competition.
So you're saying that even internally, Google just records "10"? I highly doubt it. It was widely known for example that PageRank was calculated to several significant digits and the 0-10 score you saw was the rounded version.
I imagine that it will therefore be possible for Google to rank multiple 10/10 QS ads on merit, because one will be (for example) 10.01 and one will be 10.99.
It wouldn't surprise me one bit, to be honest - but that's not the point I'm making.
The point I'm trying to make is that exact match domains do not give you some divine right to cheaper clicks. You still need to know every trick in the book just to get clicks as cheap as the existing industry leaders. You'd really have to go some to usurp them, even with a keyword domain.
Even if Google uses internal QS accurate to two decimal places, you still wouldn't be paying "substantially less for each visitor than any of the other advertisers are" which was your initial point.
Again, you'd have to get every last thing right that your competitors have got right for the 10/10 QS, then you'd *possibly* get a bit of a leg-up on them for having a keyword domain. But that wouldn't lead to substantially cheaper clicks.
I've read your case study before and it's interesting. I use EMDs myself and I'm willing to pay good money for them, but not for SEO or PPC gains. I'm currently working on a similar case study for a generic versus keyword domain - except I'm looking at how average checks on ecommerce websites are influenced by the use of EMDs. It was a test for my company initially but it has become a bit of an obsession. If I do publish my findings it'll probably come in handy for domainers to further trumpet keyword domains that can be used for ecommerce websites.
Just reading back through another interview about the car loans purchase
They say the exact match saved them 35% on there ad words spend which is a significant saving
I'm not sure if this would translate to the car insurance niche or the UK market but would certainly be interesting to know
Yes but what goes around comes around. Google might have poo poo'd exact matches for now but who's to say that in 5 years time they won't be king again.
I'm sure 95% of Googles strategy is to confuse and baffle people by constantly changing the rules so that they end up spending all of their time chasing their own tails.
This may be of interest...
I think the ship may have sailed on this one also as far as getting a decent outright offer is concerned. It terms of overall worth, it's probably not changed a great deal over the past 5 years or so. I think the issue is the amount of potential buyers has dwindled drastically. Most affiliate marketers are out of the running now as the risk doesn't warrant the return with affiliate sites being burnt easily - plus the lack of EMD advantage in the results. As others have said also, if one of the big firms wanted it, they would have taken it by now surely. Perhaps they've tried and being turned down but these days, their offers will get smaller before they get bigger. So who do you sell to? I can't see an SEO/affiliate marketer investing the sort of money needed and I can't see someone buying it on the off chance of increasing their ad quality. Whilst car insurance clicks are expensive, you'd have to save a hell of a lot to justify this sort of investment.
I think the best here would be for an actual provider to develop it as a brand and see what comes of it. EMD's do not get the advantage they once did and Google is favouring brands. But, that's not to say and EMD as a brand cannot get great benefits. How Google determines a brand is nothing to do with the domain name. It's to do with off site factors outside of the domain.
The downside with developing it (yourself) is the limitations on what you can actually offer. An affiliate site in car insurance is notoriously difficult to get off the ground and obviously becoming a car insurance provider directly is no doubt out of the question. It's easy to say let's develop it but as what? An affiliate site with a lead form isn't going to last, there is no real angle to add enough value in Googles eyes alone - without being an actual provider.
That leaves the JV angle which has two downsides whichever way it's structured. A straight development for revenue share deal with no investment on the developers part is just going to lead to someone throwing up a half arsed site spammed up to the hilt with a hope of making a quick buck or on the flip side, a percentage buy in for a percentage return is going to make people question is it really worth the risk? Assuming it's worth £100,000, even 50/50 on costs and revenue split would be too off putting. I'd rather spend £50,000 on my own domain and retain 100% profits / ownership.
So yeah, it's going to be tough to do anything with in terms of a sale or successful partnership. I guess just hold out and see if anyone does want it down the line or offer it to an actual provider with some revenue share factored in. There are enough real insurance providers out there but whether they'll see the value in what the domain can bring them is another thing.
- It could add value for an established player, but they are already established and invested in their brands, so don't have great motivation to buy.
- As already said, landscape now very tricky for affiliates, so what was a good potential source of buyers in the past has now disappeared.
- Seller is "holding out" for a fully-valued sale, and saying in his analogy "rather than cut down a tree, let it grow as a source of fire wood", i.e. best to develop the domain. Maximum value could only be realised if you set out today to found an insurance provider like Churchill, but brand it on "CarInsurance.co.uk". That's the only real way to see value from the domain. So, what seller is hoping for is a buyer who is prepared to pay top money for the domain and then do all the hard work of founding an insurance provider. Not impossible, but rather unlikely. Hence why the seller may never see value from the domain unless he is prepared to accept less than "top money".
I guess what I am trying to say is we all know if you went out and founded an insurance provider you could make a lot of money. The domain would help with that, but you don't have to have it. Attempting to sell the domain for top money is like hoping for someone else to do all the hard work and take on all the risk for you. It could happen, but unlikely. Selling this domain in a reasonable timeframe is going to be a case of compromise and concession.
It's never easy to predict future market conditions. However, I think there is an argument to be made that the optimum time for selling the domain has passed. It's still a good name, but there is no longer the "new market" conditions, heady enthusiasm and "bubble", or market sentiment around top quality generics that would have helped acheive a "top money" sale in the past.
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