In the last blog post I talked about the importance of including domains in the digital planning mix. The next natural question becomes, well how much should you determine what to budget or what you’re prepared to pay?
So how much a domain is worth?? Queue a response that often resembles a builder giving a quote… a large sucking of air through the teeth, a slight shaking of the head and the never aging line “it’ll cost you”. Whilst on average domains change hands for $1,000 to $2,000, there is huge gap between the value and price of a ‘run of the mill’ domain name and those at the top end of the price spectrum. The value of a domain is, in truth, entirely arbitrary, but there are some useful guides that can help determine what the value of a domain might be.
Uniqueness / memorability
As with any brand element, the uniqueness, standout and ability to be remembered are critical factors, explaining why short / common, easy to remember terms that relate to a topic have often been the domains that have attracted the highest values.
Two and three letter .com domains will consistently sell for a reasonable value, from anywhere between $20,000 up to several million depending on the letter combination and requirement of the buyer. Notable dictionary terms have typically garnered some of the highest sale prices of all time, such as porno.com ($8.8m earlier this year) and insurance.com for $35.6m in 2010.
360.com sold in 2015 for a eight figure sum and demonstrated a unique feature of the growth in the Chinese market over the last few years, which is a surge in prices of numeric domains. Numbers are used in Chinese culture to represent phrases or physical traits as well as a numeric value and also being widely used in company names, so short numeric number sets represent extremely memorable and meaningful names.
In the same way that high footfall locations drive the highest values on the high street, a domain name that generates high traffic volumes will hold tangible value. The value of that traffic to a potential buyer is determined by the relevance of the traffic to what they have in mind for the domain name. If 90% of the traffic comes from France, the traffic performance is only going to be relevant for a potential buyer targeting the French market.
dotCcom versus other domains
DotCom is still, be far and away, still the King when it comes to domain value. It remains the essential part of a domain portfolio for most brands. Of the top 100 domain name sales of all time, there are four non dotCom sales on that list. The launch of the new Global Top Level Domains (nGTLDs) is starting to have an impact on domain value as the market is awash with options, creating a bigger divide between domain names that have a tangible value and everything else.
Motivation of the domain registrant
Whilst all of the points above are extremely pertinent, the biggest factor in determining the value of a domain name is the registrant themselves and the motivation behind the domain registration. “There's nowt queerer than folk” and there’s certainly “nowt queerer than folk” when it comes to buying and selling domains. Domain values can vary drastically based on a registrants financial position, their attachment to the domain (yes, both people and companies become emotionally attached to domain names), whether they have a use for the domain, the costs associated with selling a domain i.e. reprinting, rebranding etc. The list goes on.