The Secret Weapon in Search Engine Marketing

When it comes to driving customers to your Web site, there's an ongoing debate over how to divide your search engine marketing budget between pay-per-click (PPC) advertising and search engine optimization (SEO). Though the answer may depend on your company's existing visibility, one often-untapped traffic source will have a profound effect on your efforts in search engine marketing (SEM) optimization -- regardless of company size.

Direct-navigation traffic refers to visitors who typed a domain name directly into a browser rather than opting for 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 -- nearly twice as likely to produce an ad conversion as normal search engine traffic.

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

Augmenting SEO with Generic Domain Names

Search engines such as Google put significant weight on the keywords within domain names. Not surprisingly, a generic domain name with a keyword relevant to your company (e.g., "www.banners.com" if your company sells banners) can take your site right to the top of search engine results for the product you sell. These generic domain names can be used to redirect traffic to your main site, 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 (each of those sold for over $1 million this year), they also bring in thousands of visitors a month in direct-navigation traffic that can often offset costs in as little as a year.

For companies with smaller budgets, direct navigation can be used with domain names that are more localized. In Fort Worth, Texas, for example, Bice's Florist was able to acquire a number of domain names -- such as FortWorthFlowers.com and NationalFloralDelivery.com -- and redirect traffic there to its main Web site. The new approach helped the florist increase its Web-site 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 Web sites geared at collecting direct-navigation traffic known as "parked Web sites." This decision stemmed from a few underperforming sites that had not been vetted, yet the new option can deter users from appreciating the value of direct-navigation traffic that is in fact 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 better strategy is to selectively exclude certain sites that show a record of performing poorly. (Google and its direct-navigation partners have recently put in additional measures to proactively eliminate many of these domains from the 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."

Recent high-profile sales of generic domain names, combined with Google's recent changes with AdWords, have brought more attention than ever before to direct-navigation traffic. Through a closer look on AdWords, many are finding that this traffic drives higher conversation rates and that even these higher rates can be improved further. At the same time, the traffic-producing generic domains are proving too valuable to ignore, and many businesses own them outright, enjoying both the 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.

About the Author

Jeremiah Johnston (jeremiah@sedo.com) is general counsel and chief operating officer of Sedo.com, an online marketplace for domain names and Web sites. Johnston oversees a variety of responsibilities for Sedo.com and helps lead its push into the North American market. He represents Sedo as a founding member of the Internet Commerce Association and sits on the board of directors in the role of association president.


Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. 

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For the rest of the February 2010 issue of CRM magazine please click here.

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