A "Manifesto" from Rick Schwartz

[DomainMart]

In a recent email to potential TRAFFIC participants, he says, "Some of the weaker PPC companies will begin to disappear. Surviving companies will increase payouts in an effort to compete and hold their base. The more progressive PPC companies are already employing more powerful pages that have more depth and much greater earning potential. They are the ones staying one step ahead and continue to improve and innovate. Many other things will happen that will shakeup the industry. Those factors convert to increasing domain values."

Any thoughts?

 

[Theo]

It might rain today. Then again, it might not.

 

[simon]

would be great if the payouts on the Parking programs would rise

 

[CashCowDomains]

I am wondering how long it will take for the industry to be done with the middle men PPC aggregators and for software to allow domainers to run their own setup on all their domains automatically. If you think about it, our PPC payments get chopped up twice. Once from the google/yahoo/msn then from our ppc aggregators such as sedo, hitfarm, trafficz etc. 100% direct profits is where its heading...

Its good to be the one holding the domains as opposed to being a ppc co.

Just my thoughts here...

CCD

 

[jaydub]

It might rain today. Then again, it might not.

lol....Exactly

 

[GAMEFINEST]

i am looking forward to it

 

[DomainMart]

I will analyze one sentence at a time:

(1) Some of the weaker PPC companies will begin to disappear.

It is also likely that some of the healthy ones will disappear due to mergers and acquisitions. Decreasing competition increases the market power of the remaining players, and thus, typically prices (payouts) go up (down), which is bad for the domain name owner. This is true whether the ad providers, such as Google or monetizers increase their market power.


(2) Surviving companies will increase payouts in an effort to compete and hold their base.

The statement violates the cardinal rule of strategy; namely, do not compete on prices (payouts), as they lead to price wars, especially when there is no dominant player. Moreover, as noted above, payouts are reduced under market concentration.


(3) The more progressive PPC companies are already employing more powerful pages that have more depth and much greater earning potential.

As a strategy, being progressive is at best vague. Moreover, if the more powerful pages have the potential of greater earnings, why aren’t they actually generating higher earnings?


(4) They are the ones staying one step ahead and continue to improve and innovate.

Iinnovation without financial discipline does not necessarily create shareholder value.


(5) Many other things will happen that will shakeup the industry. Those factors convert to increasing domain values.

To reach the value conclusion, while holding other things outside his statement equal, he must believe that it is highly unlikely that Google will dominate the ad provision market.

 

[H2FC]

I believe its very likely the hosting companies will become the dominate players in the ppc sector. Why do we need ppc companies when a hosting company can make it possible for all domain owners to deal directly with google and yahoo for paid ads? I'm not an expert on this issue but it seems to me the hosting companies already have the ability to completely set up the domain pages and then let the owner take it from there. It may be just a matter of time before the ppc companies are history imho.

 

[katherine]

I don't think there is any serious risk of competition from hosting companies.
Domain parking and monetization is a fully-fledged business and not a side activity. It requires a good knowledge of the domain industry, which most host providers don't have.
Besides godaddy already operates a paid parking scheme :lol:
Let's hope this is not the future of PPC :smilewinkgrin:

 

[Sarcle]

I don't know what the big deal is? Anyone can predict that. Isn't that the nature of Capitalism? The strong weed out the weak then compete against each other for dominance? Happened with search engines and browsers a little while back. Anyone remember Magellan.com or the market share Netscape had?

 

[GAMEFINEST]

have to be step ahead of the game

 

[hugegrowth]

I agree that PPC rates will head higher, because more advertiser dollars are coming online, and more businesses are advertising online, so there is more competition for those eyeballs. There will always be new and more companies trying to break in to the online market, and to get their ads out they have to bid higher. There seems to be more advertising $$ out there now than places to spend it online.

 

[Theo]

Except that parking companies are getting greedier, thus grabbing a larger piece of the pie.

 

[Duckinla]

If you think about it, our PPC payments get chopped up twice. Once from the google/yahoo/msn then from our ppc aggregators such as sedo, hitfarm, trafficz etc. 100% direct profits is where its heading...

The best and strongest PPC companies will not rely solely on Google and Yahoo. They will be big enough to bring in advertisers directly. They also will have teams of professionals working on ways to increase CTR and Click Value. They should be able to offer you a blend of benefits that will result in better revenues than if you were to try to do it yourself.

I think Rick is right on. Bigger, stronger PPC companies will have the infrastructure and resources to make parking bigger and better over the coming years.

Except that parking companies are getting greedier, thus grabbing a larger piece of the pie.

Not mine. You're talking about SEDO. The problem there is that they offer an additional service that you need to sell domains. As long as you need them, they can hold your revenues hostage and do what they will to you.

 

[petrosc]

Not mine.

Is that DS?

 

[Fearless]

I got the manifesto but it went into my Thunderbird junk folder. When you look at an email and leave the junk folder the email deletes. So I have to wait until the excerpts show up in a posts.