Advice for Beginners, Domaining Mistakes August 23rd, 2007
When I first got into the domain name business almost two years ago, I began accumulating domains rapidly. Many were hand registrations. I registered assorted typos of popular websites, celebrity names, and future technologies that might one day be viable (like QuantomComputer.com, a typo of “quantum computer”, which is a theoretical technology that might one day exist).
If I had it to do over, by the way, I would not register the typos. Some of them infringe on other companies’ trademarks. Most are not profitable and the resale value is limited. Instead I would take all the money I spent on 300 typos, and instead buy one or two good generic dot coms with traffic.
I also bought several domains at auction, focusing on domains with traffic. Almost all of these are profitable, some very much so. At least I did something right.
Parking My Domains
I ended up with a stable of several hundred domains. I created accounts with several different parking services. I will not divulge the names of the parking services, for reasons that will soon become plain.
I found that the income from parking was meager, because the traffic on most of the domains was low. I began looking for ways to increase it. I had some experience with using Google Adwords to drive traffic to websites, so I thought I would try creating Adwords campaigns for my parked domains.
I was completely unaware that this is a violation of the terms of service of almost every domain parking service. I was a newbie, remember? I had read the TOS of each parking service, but I did not understand from the language employed that traffic resulting from Google Adwords was not “natural traffic.”
A Highly Profitable Experiment
The first month I tried this, I made several hundred dollars profit. I began fine tuning and optimizing the parking pages based on which advertising links were being clicked on, and I adjusted my Adwords campaigns as well, trying out different ad variations to increase the CTR, and experimenting with different keywords. I checked on all my campaigns three or four times a day, calculating exactly how much profit I was making per campaign, and adjusting my Adwords bids up or down as necessary.
The second month I made almost $3,000. My parking service rep increased my commission by 10%. The payout on some of these parking pages was fantastic – sometimes as much as $2.50 a click, consistently. I was making money hand over fist. I continued creating new Adwords campaigns. Some were not profitable, either because the CTR was not high enough on the parking page, or the pay per click was too low. I shut those down, keeping only the ones that were profitable.
The income continued to increase. In the third month of this experiment I made $10,000 profit – that’s right, ten thousand dollars – by the third week, and was on track to make $15,000 for the month. I was elated.
I know, some of you domain veterans are shaking your heads right now, thinking, “What a moron!” Hey, I was a newbie! I didn’t know any better.
A Crashing Halt
My excitement came to a screeching halt when I received an urgent email from my account rep at the parking service:
“Our compliance department says that some of your traffic appears to be coming from paid advertising. This is a violation of our TOS. Please explain your actions or we will have to terminate your account.”
What! I was stunned. I contacted a friend of mine who’s much more experienced in the domain name industry.
“Yes,” my friend said, “What you’re doing violates the TOS of every parking service. They can shut down your account and even confiscate your earnings.”
Panicked, I immediately terminated all my Google Adwords campaigns. I wrote back to my parking service rep, saying, “I’m very sorry, I was not aware that I had violated the rules. I have ceased my ad campaigns.”
The rep responded the next day with a short email, saying only, “Ok, no problem. Just don’t do it again.”
Whew! I was lucky. It had cost me about $3,000 to make that $10,000 profit, and if they had confiscated it I would have been $3K in the hole. Not to mention that I did not want to lose my relationship with the parking service.
Even worse, I have since found out that what I was doing violates Adword’s TOS as well. Losing my Adwords account would have been a disaster.
Back to the Grind
So what have I done since then? Well, in the course of this experiment I learned a lot about how to use Adwords effectively. I don’t want to waste that knowledge. So I have been creating blogs based on some of my domain names, and monetizing these with Adsense or other forms of paid advertising. I am free to promote these all I want, since they are legitimate websites with useful content. I write all the articles myself, or I contract them out to freelance writers. I make sure to comply with all Adsense guidelines.
It’s time consuming, but making money is always hard work. You know what they say: if it looks too good to be true…