PPC

Numbers – Typosquatting Study Variables


FairWinds recently released a study that calculated the cost of typosquatting for the brands behind the 250 most highly trafficked websites.  The total included costs from visitor acquisitions, lost sales and impressions and also recovery of typosquatted domain names, and came out to $327 million per year.

A major source of losses for brand owners is pay-per-click (PPC) sites; when a company invests in paid search, its ads appear on PPC and other websites in addition to the search engine’s results pages.  When an Internet user clicks on the sponsored link, either on the search engine site or another site, the company pays a click fee.  When an Internet user makes a typo or keystroke error while trying to reach a brand’s website and lands on a typosquatted domain site that is leveraging PPC to monetize traffic, we have found there is an 18% chance he or she will click on the targeted brand’s link (meaning the brand suffers a loss in the form of a click fee for gaining the visitor) and a 7% chance he or she will click on a competitor’s link (meaning the brand suffers a loss in the form of diversion while another advertiser pays the cost-per-click (CPC) and picks up the visitor).  The formulas that we used to calculate those losses are as follows:

For users who click on the targeted brand’s link:
18% x (Annual traffic per domain) x (Average CPC) = Advertising costs for the target brand

For users who click on a competitor’s link:
7% x (Annual traffic per domain) x (Average CPC) = Advertising costs for the target brand’s competitor

Originally in our calculations, we used an average CPC of $2.74 for each formula.  Given that we could calculate the CPC for the specific keywords in this study of 250 sites, we leveraged today’s Google estimates for each keyword CPC rather than looking at an historical average for a broad range of keywords.  Because there was a range of CPC and traffic values that could have created bias, we then extracted the weighted average CPC across the dataset.  We determined that $2.03 was the weighted average CPC for all the sites included in our study and therefore, $2.03 is the actual cost the site owners incur when a visitor lands on a typosquatted parked page and clicks on their link. Ultimately, this is the amount of money paid by the advertiser and shared by the contextual Internet advertising provider and the owner of the domain (and sometimes an intermediate party such as a domain parking company).

Obviously, this reconsideration alters our final calculation somewhat.  With the new average CPC, the total cost from ad clicks on typosquatted PPC sites in our study is $187,288,458 per year.  When added to the costs of lost sales and impressions, plus domain recovery costs, the re-calculated total cost of typosquatting is $364,276,874 per year.

If it’s not already apparent in the scope of this study, this figure applies to the 250 sites that we studied, and is not a comprehensive measure of all typosquatting (that figure would obviously be much greater).  To read the updated paper with an in-depth discussion of the damage that typosquatting inflicts on the 250 most trafficked websites, visit the FairWinds site for the entire paper, or the revised section for a discussion of how we calculated the sample set CPC.

Lead Generation from Domain Names


At the heart of online marketing is the goal of attracting visitors to Web sites and engaging with them in ways that deliver lasting and memorable impressions.  There are a variety of elements that go into an effective online marketing campaign, including search engine marketing but also radio, print, outdoor, and TV offline to drive impressions online.  Often, companies direct a small portion of their efforts and budgets to domain names and search engine strategies like search engine optimization (SEO).  
 
Search engine strategies like SEO function best when paired with strong keyword domain names. It’s well known that Google and Bing reward developed keyword domains that have “search love”—in other words, Google and Bing give higher ranks to domain names that contain terms consistent with the search terms entered by Internet users—and for this reason a brand can achieve a higher page rank using keyword domain names. Try a search for “meals” in Google sometime and you’re likely to find Nestlé in the first position with their meals.com site. However, if you Google “sauce,” you won’t see a Unilever brand on page one of Google’s search results. Yet, Unilever owns sauce.com and points it to the Ragú Web site. Why does Meals.com rank so highly while Sauce.com does not? Domain names that are set up as simple redirects will not be indexed separately by search engines.  This is why meals.com is on page one for “meals” while sauce.com is not on page one for “sauce”  – Nestlé built a stand alone site on meals.com while Ragú pointed sauce.com to another site.  For a brand owner to take full advantage of a keyword domain name’s ability to capture both direct (type-in) and search traffic, the domain name must be utilized as a standalone site. Keyword domains that are properly developed will capture organic traffic on a reoccurring basis at nearly no cost.
 
There are other ways to drive up traffic numbers by adjusting domain name strategy. By reviewing and making small adjustments to its domain name portfolio, Verizon was able to generate 24 million unique visitors to its Web sites in a 12-month period.  That increase in traffic was achieved without any additional search engine marketing tactics; Verizon simply redirected carefully selected names it owned and recovered valuable domain names that receive type-in traffic and pointed them to branded content, and ultimately drove millions of consumers to its sites – without the incremental costs associated with paid search clicks. An updated case study on the effects of Verizon’s domain name strategy will be coming soon.
 
In many instances, businesses do not set aside a portion of their marketing budgets to maximize the benefits from very active domain management because they are not aware of the benefits it can provide in terms of lead generation and cost savings.
 
However, consider how domain name typos are one area where companies often lose valuable traffic – if Internet users mistype the domain of a company’s Web site into the address bar, they can be led to sites containing Pay-Per-Click ads, malware, or in some cases, even to the Web site of the company’s competitor.  It is often surprising how much traffic businesses are losing to typos—we recently uncovered 47 million initial impressions one company was losing annually due to typos of its name.  Imagine a scenario where the top typos for a brand receive 5 million (about 1/10 of the prior example) unique visitors per year.  Considering the fact that on average, businesses are willing to pay approximately $2.00 per impression, unregistered typo domains cost the company in question $10 million per year, or more than $833,000 per month in lost marketing benefit.
 
When you look at the hard numbers, it becomes obvious that search engine tactics alone cannot generate the maximum number of online leads.  Instead, SEO, SEM and domain strategies must be combined to optimize results.

 

The New PPC


After reading a recent announcement that Verizon will be collaborating with Google to offer Android mobile phones of Verizon’s 3G service network, I checked out the domain verizonandroid.com. What I found when I visited verizonandroid.com was an example of what I have observed as a growing trend – a site hosting pay-per-click ads, but also attempting to insert, through an automated process, minimal and unoriginal content designed to make the site look more like a fair use opinion page than a cybersquatted PPC site.  To be clear, this ad is designed purely to produce ad revenue and nothing else. Because this site does not look like the typical PPC site, Internet users (and attorneys tasked with tracking domain name abuse) may think at first glance that the site is somehow legitimate.  In the case of verizonandroid.com, however, the infringer used an automated tool to insert a two paragraph July 2009 blog post written by Sean Fallon, an active blogger who writes about technology developments for Gizmodo.  Gizmodo’s webpage grants third parties a copyright license to reproduce its material with attribution but only for noncommercial purposes.  These kinds of PPC sites, however, are created purely for commercial purposes and are designed to incorporate the minimal content solely as a hook to attract revenue. 
 
Some other examples of this new kind of deceptive PPC site are directv-zone.com, jackdaniels.com.ua, and guitarhero4.com.
 
By inserting minimal third party content with the advertisements on the landing page, the cybersquatter ensures that Google and other search engines will index the page and pull it up in natural search results.  Some additional Internet users will therefore be misdirected to their PPC site through Google’s natural search results in addition to capturing consumers who type the domain name directly into their browser. Cybersquatters may hope that by achieving search engine ranking, they can evade detection by trademark attorneys.
 
I have seen this trend becoming more popular—perhaps, in addition to trying to avoid detection, cybersquatters are realizing that simply obtaining a domain and filling it with parked PPC ads is not the best way to monetize their sites. Like businesses, they are aware of the value added by generating search engine traffic to a Web site. Web sites dedicated to providing advice and solutions for domainers emphasize the benefit of hosting content in addition to PPC links in order to achieve natural search rankings and drive traffic to the site. In the discussion boards of DNForum.com, experienced domain name owners constantly advise new owners to add more content and develop their sites as a means of more effectively monetizing them, especially when merely parking the site is not generating enough revenue.
 
Despite the placeholder content, these sites are basically just glorified PPC sites that are merely monetizing and infringing on brand names just like traditional cybersquatted sites. Brand owners need to be aware of the risks they pose: even more so than a landing page filled only with ads, the deceptive use of third party content can easily deceive the average Internet user into believing that the site is somehow legitimate.  Brand owners and their attorneys should be vigilant to pursue these deceptive sites and protect consumers from what appears to be the latest scheme in the cybersquatter’s arsenal of deceptive practices.