| By
Ron Jackson
It's no secret that domain owners have been watching their
pay per click (PPC) revenue sink for more than a year now. Many are
reporting drops that range from 30%-50%. That is a bitter
pill to swallow, especially at a time when overall online ad
revenues have been rising at a 30% annual clip.
The companies at the top of the PPC pyramid, Google
and Yahoo, are seeing a lot more ad money roll in, but for
some reason the domain owner's share keeps getting cut, even
though they are the ones providing the product that is being sold -
traffic. The frustration of domain owners has been compounded by a lack
of transparency in the PPC system. The end result is that many
domain owners have started looking for new monetization
opportunities.
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This trend is playing right into the hands of Sunnyvale,
California based Sendori.com.
Sendori has come up with an innovative monetization system that
bypasses Google and Yahoo by allowing advertisers to bid directly
on traffic from high quality domain names. Since the traffic is sent
straight to the advertiser's site, they pay for every
visitor, not just the ones that click through.
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For those with high
quality domains
and traffic (the system is
not meant for mediocre domains), Sendori officials say their
system can produce considerably more revenue |
| than parking, especially since
Google or Yahoo and a parking company both take big chunks out
of each ad dollar spent before the remainder trickles down to
the domain owner. |
If at any time the amount advertisers bid for a
specific domain's traffic falls to a level that would be lower than
what parking can earn (or if there are no bids), Sendori
automatically switches the domain over to a parking feed. They say
that ensures that domain owners can take advantage of the upside of
selling direct to advertisers without having to worry about their
revenue stream underperforming the PPC system.
| The idea for Sendori was hatched by its two
co-founders, CEO Ofer Ronen and CTO Dave Weldon
who met and conceived the idea while both were going through
the MBA program at Cornell University. Weldon, who
spent five years with Intel, handles the technical side
of the business while Ronen, a magna cum laude graduate of the
University of Michigan (where he earned both bachelors
and masters degrees in computer engineering), handles strategy
and runs day to day operations. The team got another valuable
new member recently when Director of Business Development Michael
Feeley came over from Dotzup.com where he had
become well known within the domain community. With the high level of interest we are now seeing in monetization
alternatives I decided to call on Ronen and Feeley to
get some more insight into Sendori's system. Ronen told me
he had always wanted to be an entrepreneur so he jumped at the
chance to start the new venture with Weldon when they |
Sendori.com
CEO Ofer Ronen |
| completed their MBA programs at
Cornell. Ronen said family members helped provide the seed
money he needed and once Sendori got up an running they
quickly attracted venture capital investors as well. |
"When we looked at the domain parking
business we realized that visitors to domains would have a much
better user experience if they were directed to the best websites in
the world, instead of landing on a parking page," Ronen said.
He used Travelocity as an example of a site that someone
searching for travel information could automatically be sent to when
they type in a travel related domain name. "Domain owners, no
matter how much they try, can never build up the kind of brand
recognition that a Travelocity has," Ronen said.
"So we thought the traffic would do better
if it flowed to them and that a market-based approach, where there
was competitive bidding, would also help domain owners earn the most
possible money. The advertisers that can benefit the most from the
traffic would be the ones who would bid the most," Ronen
said. The marketplace he envisioned went live on August 1,
2006 when Sendori began operations.
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Having just celebrated the
company's second anniversary Ronen said he has been
very happy with the way things have gone. "We've been
seeing really great results. We learned that the model of
advertisers paying for every visitor, not just the ones that
click, has worked very well. We created a lot of technology to
optimize the matching of domains with the right kinds of
advertisers. We also uitilize a system that advertisers are
familiar with by letting them bid on keywords. That made it
easier to get advertisers onboard and bidding on our
traffic."
Domain owners aren't the only ones that
can take advantage of the Sendori system. They offer an API
that lets parking companies integrate it as well, so that they
can essentially "turn the channel" to the Sendori
system whenever it is outperforming their parking revenue from
Google or Yahoo.
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For domain owners, Sendori just recently
introduced a DNS solution that allows you, once your domains have
been approved, to simply point your nameservers to Sendori to go
live on their system. Feeley has been in charge of bringing in
domain portfolios for that program and he said a lot of key players
are taking advantage of it. "Over the last few weeks we have
brought in some of the premier generic domain names. We are
extremely selective about the domains that we work with and we go
after very specific domains in relation to who we have signed up on
the advertising side," Feeley said.
| "We can approach a portfolio
holder and say you have five really great domains that would
work well with advertiser A, B and C and sort of grow the
relationship from there. They see |
|
Michael
Feeley
Sendori Director of Business Development |
that we outperform parking
by a pretty large margin and they end up wanting to
bring over the rest of their portfolio," Feeley
added.
Feeley said many holders of top domains
are anxiously waiting for Sendori to sign on advertisers whose
needs match the product or service represented by their
domains, so the company expects to continue growing at a rapid
clip.
Of course the company's timing couldn't
be much better, given the disenchantment among so many domain
owners with the deterioration of the PPC business.
"People are really eager for a new model," Feeley
said. "There have been some big changes and it looks like
even bigger changes are coming down the pipeline that will put
a hurting on a lot of these guys so they are looking for a new
home"
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"What I like about our model is that it has
total transparency," Feeley noted. "You know exactly who
is advertising on your domain. You know who is paying your bills and
that is something that has been missing. It's true that we are still
somewhat of a middleman but the domain owner's revenue share is
still a lot less diluted than it is with parking." Feeley also
said that because of Sendori's direct connection with their
advertisers there is a strong possibility they could facilitate
an outright sale of domains to advertisers for those owners
interested in selling. "We think you are going to see
some strong end user sales transactions down the line through
Sendori" he said.
Feeley added that if domain owners are willing
to share their statistical information with the company they can use
that data to sell the right advertiser on using that domain in their
ad campaigns (or consider it for purchase). "With the stats we
also know how much to sell the traffic for as we are obviously not
going to sell it for less than what you are already making. Some of
the bigger domain owners are hesitant to share their stats with
anyone but if they will take that step we can make more money for
them."
| With their emphasis on quality, the
Sendori system is obviously not designed for everyone.
"It is not a walk in system," Feeley said, "we
have to look at the owner's names and see what |
might sync up with our
advertisers to determine what we would be interested in. Where
we are going to shine is where we have an advertiser match so
that is where we concentrate our efforts."
Sendori's roster of clients is impressive
as it includes some of the biggest spenders online including Netflix,
GEICO, Hewlett Packard and other well known
brands. Ronen said, "Companies like that can offer more
for domains than other buyers because they have the most to
gain from owning them or advertising through them."
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There has been some debate about how well the
domain channel converts traffic into sales. Some say it is far more
effective than search engine traffic and others claim it is less so
because of click fraud and other issues. I asked Ronen if he had
seen any reluctance among the major advertisers Sendori deals with
to use the domain channel.
| "Not at all," Ronen said,
"because we offer complete transparency. They can see
exactly where conversions are coming from and they can weed
out anything that is under performing. Our reports update
hourly so they can see exactly what is going on. The transparency
we have is not something they get with Google and Yahoo. We've
also found that advertisers are always willing to try
something new if they can measure it, so we made sure
we built something that they can measure." |
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"It
has been very exciting to see what happens when you match a
great domain with a great advertiser - the value that is
created," Ronen said. "We are seeing very high
conversion rates, in come cases 30% or more, and it is
fun to watch that happen."
Changes are always afoot in this business
and great fortunes have been made by those who have been able
to catch the right wave of change. A lot of people
think Sendori is in a perfect position to catch the next big
one and Ronen said they have already received buyout offers.
Those were rebuffed because his team thinks there is too much
upside in their model to sell so soon.
Only time will tell how their fortunes
will play out, but for those holding premier domain names the
Sendori proposition looks like one that is worth looking into.
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