Guest comment: Direct Navigation- A Secret Weapon for Search Engine Marketing

When it comes to driving customers to your website, there is an ongoing debate between how search engine marketing (SEM) budgets should be split between pay-per-click (PPC) advertising and search engine optimization (SEO).  Though the answer may depend on your company’s existing visibility, to truly optimize your efforts in SEM, regardless of company size, it is important to recognize an often untapped traffic source that will have a profound effect on both.

Direct navigation traffic refers to website traffic driven by users who have typed a domain name directly into a browser rather than a search engine (e.g. typing www.cars.com when looking for cars).  An estimated one in six searches is conducted through direct navigation, and this type of traffic is highly qualified – it is nearly two times as likely to produce an ad conversion as normal search engine traffic. 

Direct navigation traffic is one of main drivers of explosive growth in the secondary domain name market, where companies and content providers are spending five, six or even seven figures for the right domain name.  Within both PPC advertising and SEO, there are underutilized ways of leveraging this highly qualified traffic.

Augmenting SEO with Generic Domain Names

Search engines like Google put significant weight on the keywords within domain names. As a result, having a generic domain name that incorporates a keyword relevant to your company (e.g. www.banners.com if your company sells banners) can take your website right to the top of search engine searches for the product you sell.  These generic domain names can be used to redirect traffic to your main website, or you may choose to rebrand your business around the domain name.  Another option would be to create a branded name that also includes a generic keyword (e.g. www.bannerhub.com).

While high traffic generic domain names such as Fly.com or Call.com can be costly to acquire (they both sold for over $1 million this year on Sedo.com), they also bring in thousands of visitors a month in direct navigation traffic that can often offset costs in under a year.  For those companies with smaller budgets, direct navigation can be used with more localized domain names.  Take for example small business Bice’s Florist in Forth Worth, Texas, which was able to acquire a number of domain names, such as forthworthflowers.com and nationalfloraldelivery.com, and redirect their traffic to Bice’s main website.  The new online approach helped Bice’s to increase its website traffic by 47 percent and sales by $1.5 million, or about 38 percent.

Unlocking Direct Navigation Traffic within PPC Advertising

Direct navigation can also help in your PPC advertising efforts, particularly within Google’s popular AdWords service.  In late 2007, Google made a seemingly small change to its AdWords program, giving its AdWords advertisers the option of excluding their ads from websites geared at collecting direct navigation traffic known as “parked websites.”  This decision stemmed from a few underperforming sites that had not been vetted, and yet the new option can deter users from appreciating the value of direct navigation traffic that is in reality highly qualified and shows strong return on investment. 

Instead of excluding the entire parked domains network from your AdWords campaigns, which eliminates the ability to drive significant qualified traffic, a more sound strategy is to selectively exclude certain sites that show a record of performing poorly (Google and direct navigation partners like Sedo.com have recently put in additional measures to proactively eliminate many of these domains from its parking channel and do not charge advertisers for traffic deemed unsatisfactory).  To help with the vetting process, AdWords users can also now track the success of channels through “Placement Performance Reports.”  A good example is the following testimonial from Garden State Life Insurance pulled directly from the Google Content Network:

“Before Placement Performance reports were available, I would have assumed that ads on domain pages perform very poorly and don’t offer very much to the visitors who stumble across them.  But upon viewing the report, I noticed many websites were converting very well.  So I blocked the poorly performing websites from showing our ads.  Then I increased our overall budget on the sites that were converting well by 50 percent.  Now, about 60 percent of sales from our content campaigns come from the domain pages.  The acquisition cost of our domain ads is about a third of our non-domain content ads and about a half of the cost of our search network ads.  Ads that appear on parked domain pages produce very qualified traffic, and that traffic converts on our website in a similar manner to our search network traffic.”  -  Michael Musselman, Garden State Life Insurance

The recent sales of the generic domain names discussed above, combined with Google’s recent changes with AdWords, have brought attention like never before to direct navigation traffic.  Through a closer look on AdWords, many are finding that this traffic drives higher conversion rates and that even these rates can be further improved.  At the same time, the traffic-producing generic domains are proving too valuable to not be owned outright by many businesses, with both natural traffic they produce and their keyword value with SEO.  While the best strategies for SEO and PPC advertising will continue to be debated, direct navigation should not be overlooked, as it provides a highly effective traffic channel that can have great influence on both areas of SEM.

Jeremiah Johnston is General Counsel and Chief Operating Officer of the online domain name and website marketplace, Sedo.  Johnston oversees a variety of responsibilities for Sedo and helps lead its push into the North American market.  He represents Sedo as a founding member of the Internet Commerce Association (ICA) and sits on the Board of Directors in the role of association President, helping to shape the future of domain names in the political space. 

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