How Important Are Monthly Searches In Determining The Price Of A Domain Name?

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Claude Dauman, the frequent seller of those .tv domain sales that we come across, along with Michael Castello and Toronto Domainer had a discussion or rather a debate about the importance of monthly searches in pricing a domain name.
His quest to explore this led him to study some of the top sales that were reported on DNJournal.
He has taken some of the sales in the $60,000- $80,000 and checked out its monthly searches, advertising costs, etc.
Here is what he did(quoted as it is):

"I selected domain names of greater than three characters from the bottom of the sales chart. The sales prices ranged from $60,000 to $80,000. I used the AdWords keyword planner to obtain the average monthly search figures and suggested bids for each domain name. The results were very interesting. Of the 20 domain names:

3 domains had over 100,000 average monthly searches.
5 domain names had less than 1,000 monthly searches
5 domains had a suggested bid of greater than $1.00
7 domain names had a suggested bid of less than $0.10
16 names were parked or inaccessible prior to sale.
2 names were nicely developed, prior to sale, 2 were poorly developed.
9 domain names are parked or inaccessible since having been purchased.
10 domain names were developed since having been purchased, one is being redirected.

I realize that this study is less than scientific and that these comps are rather simple. Even then, it does give some indication that a meaningful percentage of high dollar domain name sales relate to domains with less than stellar monthly search and suggested bid numbers. It also indicates that many undeveloped domain names fetch top dollar.

Meaningful domain names can be a great asset to advertisers who wish to retain a larger percentage of their viewership. Let’s say you operate the Bank of Upper Volta and use the domain name BankOfUpperVolta.com. You decide to invest millions of dollars on a print and television advertising campaign, to inform people about your very low rates on fixed loans. At the end of the commercial, would it be prudent to direct potential customers to: BankOfUpperVolta.com/FixedLoans? Wouldn’t it be worthwhile to invest a little bit more to acquire a meaningful, brandable domain name, such as FixedLoans.com? There are a large number of financial institutions offering fixed loans but there is only one FixedLoans.com.

There is really no good reason why any large corporation should feature a domain name with a “/” on a television commercial or print advertisement. That’s one reason why I strongly believe that certain brandable domain names can have great value, irrespective of monthly searches or suggested bids. If retaining the customers, which you have invested so much money to attract, requires an additional investment of $10,000, $100,000 or even $1,000,000 wouldn’t it seem a prudent investment? What good would it be to garner their interest, if at the end of the commercial, they find themselves lost on the information highway, unable to find you?

Where do you stand on this topic?"

The original article from tldinvestors can be found here
 
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