How Much is a Click Worth If That Click Sells a 50 million Dollar Airplane?
http://www.conceptualist.com/?p=618
Sahar talks about Elliot’s interview with Rick Schwartz, and subsequently talks about how development of funeralhomes.com has changed what was once a 10 cent click on a parked page, to a $10,000 sale of funeral services. From the bottom of Sahar’s post:
Quote: “We see that every single day with FuneralHomes.com. A click that used to be valued at 10 cents now converts to a funeral of USD10K revenue and for the funeral home, potential life-value of a consumer of much more.”
***FS*** Rick and Sahar show us where the rubber meets the road in this business.
I have heard these arguments many times, but I don’t buy the idea that type in traffic is going to generate deals of this size. That is just not how it is done in the real world.
If you are talking about purchases such as cars that are made by unsophisticated consumers you might have a point, but extrapolating it beyond that just makes you look a little silly.
I agree with this general argument, but some people take it a step too far.
If you can buy a $.10 click from google for funeral homes, then the click on the site should be “worth” $.10 (minus their cut) considering a competitive environment .
If you are the only person who understands how to turn this $.10 click into a $10,000 funeral, that means you are a smart businessman, and that the entire market may be undervalued. It generally doesn’t necessarily mean that someone who types in funeralhomes.com is worth any more than someone who types in “funeral homes” into google. (though I do understand differences in intent, conversion rates etc)
I think this is a valid argument. The premise is that a person who visits a website is looking for information. If the domain name is geared towards a specific product, you know the person wants information about the product, and frequently information about where to buy the product.
If you have a parked page, no matter what, you will only receive a small payment for sending the visitor to another website whether the visitor makes a purchase or not. However, if you can provide the information they need and the ability to buy, your commission is much higher. There is a huge advantage with PPS (pay per sale) vs. PPC.
In my opinion, the main problem is that finding and cultivating PPS relationships is difficult now. We need a company using the PPC model to build web templates allowing domain owners to operate easy to use web stores that would be as easy as changing the DNS. I think we are far off, but domain owners are getting tired of seeing a few pennies per click when they can make much more on a PPS basis.
I think DigiMedia and NetShops have great models for this.