It’s no big secret that domain parking has taken a revenue hit over the last couple of years. We’ve all seen the gripes on forums and blogs demanding more innovation in monetization strategies. Others are even calling the death of parking. With this decline in revenues there’s even been a push to abandon the parking model altogether and for companies to provide more robust development strategies (think Epik, WhyPark, etc). Many of these new ideas and monetization methods are much more involved, fall out of the core-competency of parking companies and not the sort of a simple retooling that a domain parking company could undergo without substantial capital. So, when DNN was approached to learn about a “simple” new way to make more money off of parked domains, you can bet we were interested in hearing more.
Magnetic (previously known as DomDex), a new company led by Yahoo and Double Click veteran Josh Shatkin-Margolis is bringing a new revenue stream to domain parking that requires simply one line of code added to a parking page. Even better, Magnetic isn’t an alternative to domain parking revenues, but rather it supplements those revenues. They’re providing a new monetization angle for parked domain name traffic in a way that wasn’t done before. Let’s just call it found money.
Magnetic is in the business of re-targeting. Re-targeting allows advertisers to display ads based on a users past activity. Here’s an explanation of retargeting from an advertiser who is using the technology. I’m sure you’ve seen ads like this before. After you visit a site, you’ll notice ads for that site on other websites, as if the advertiser is following you everywhere. This form of retargeting is a great way to target someone who showed interest in your product or service before and might still be interested.
With Magnetic, instead of seeing ads after visiting the advertisers site, the user is retargeted after performing a search. For example, if a user searches for car insurance on a Google partner page and then goes to another site, say CNN, they’ll now see a car insurance banner ad. The user doesn’t have to first visit the advertisers site to be retargeted later. For the advertiser, this is a benefit because they can begin targeting ads to a potential customer immediately after they search, long before they may have eventually visited the advertisers site and possibly before they are aware of the advertiser at all or even competitor offerings. You might call this your best chance to hit your customer earlier in the “purchase funnel“. As an example, Search Engine Watch discusses how a video game company could use retargeting data to target users who might not even be aware of a new game release and make these potential customers aware of their product.
Magnetic gathers search data and sells this data to ad networks or publishers for the purpose of retargeting. Domain names are just one place Magnetic gets their search data. Additional sources of this data come from second-tier search engines, dns error traffic, tool bars or anywhere Google or Yahoo search feeds might be displayed.
How’s Magnetic work with domains? Check out the company’s handy visual below :
It’s pretty self-explanatory. In step 1, above, if a user lands on Cellphones.com, we all know they are clearly someone interested in information about cellphones, a second click provides even more details about that users intent. Say the user clicks on an ad about the iphone. Magnetic cookies this user and provides that information to third parties, such as ad networks. Advertisers purchase this information in “display units”. When the user visits another website (step 4), CNN.com, for example, they will see an ad that was purchased to target that user based on their search history for iphones.
The user who visited Cellphones.com would now see ads from advertisers looking to target someone who is searching for iphones. Instead of showing a banner that may not be relevant, the publisher serves an ad for the iphone, or perhaps a cellular provider like Verizon, or even a retailer like Best Buy. You can better understand how this targeting benefits the advertiser by reviewing Magnetic’s promotional material geared toward advertisers [pdf].
In addition to helping advertisers target their ads, Magnetic provides domain parking companies an added benefit in better targeting the keywords on their own parking landing pages. The same data that Magnetic uses for helping advertisers effectively target their ads can be applied to landing pages. Better targeting the ads and keywords displayed on parking pages would logically mean another increase in revenue for domain owners. Domain parking companies partnering with Magnetic get the benefit of both an additional revenue source and a partner that can help better target ads, thereby increasing clicks and revenue.
So, what’s it take to work with Magnetic and who is working with them now? Like Shatkin-Margolis told DNN, “it’s one line of code and five minutes to get it set up”. In most cases they are looking to work with companies that have millions of search queries a day. Average-Joe domainer won’t really be working with Magnetic directly, but you should hope to see some of the benefits of this new revenue stream as domain parking providers adopt the monetization model. According to Shatkin-Margolis, the company is working with several domain parking comapnies. Unfortunately they have NDAs and he is not at liberty to discuss. DNN also requested information from several of the major parking companies. We were only able to confirm that these parking companies would not discuss specifics of partnerships and they would neither confirm or deny that they are monetizing through Magnetic. At least one parking company informed us that they have been approached and have not partnered with Magnetic yet. Another executive informed DNN that there are many new companies presenting alternative ideas and monetization strategies aimed at parked domain traffic and that we should expect to see more of these sorts of opportunities present themselves.
Magnetic has partnerships with several ad networks already and announced earlier this week new partnerships with two more networks, Undertone and interCLICK. Display advertising running on many of the world’s largest sites will now benefit from Magnetic’s re-targeting data. An advertiser would be able to reach exact markets and even run advertising on sites that may have previously been cost-prohibitive because the ads were being served to every visitor not specific targets. Magnetic claims that they have seen “10x to 100X higher click through rate[s] over non-targeted ads”.
Magnetic is a new company and the concept of re-targeting is generally new to advertisers. As the company grows, as advertisers see the results from this powerful targeting tool and as demand for Magnetic’s data increases, you can safely assume the source for that data is going to benefit in the long-run.
No additional work and new money for domain owners. Haven’t heard that one in awhile.
(c) 2010 DomainNameNews.com
Upcoming Domain Industry Events, Conferences & Auctions