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Shaky Ground

First, it should be mentioned that at any given moment, this particular advantage can disappear. While in many cases it represents a worthwhile connecting of a user to an extremely relevant site, the potential for (and existing instances of) abuse make it a risky ranking factor. If Google decides that the bonus is doing more harm to their results than good, they can pull the plug.

A General Formula

When assessing most things, the calculation often comes down to a combination of quality and quantity. In this case, quantity represents search volume potential for the exact term (by default Broad Match is selected, and you need to check the Exact Match box to get the right figure), whereas quality can represent a few things, including potential to drive sales, and, in the easiest and most direct sense, the Google Adwords estimated average cost per click (cpc) for bids for this keyword. This figure represents what it would cost for a click from a Google ad, all other factors affecting click costs being equal. The more value that keyword can bring, the more people tend to be willing to pay for it, which drives the average cost up. So if you see a high cost, the keyword has potential, and any organic ranking advantage you can snag is probably worth it.

As such, while domaining obviously involves a large amount of factors, on this front a basic way to look at it is the Adwords monthly volume X cpc. This does not represent the amount you would earn per month, as from the Adsense side your money doesn’t equal the amount the person spent on the Adwords side (Google does take a cut), plus the exact domain doesn’t necessarily mean rankings, rankings don’t necessarily mean clicks from every searches, and clicks to your site don’t necessarily all turn into Adsense clicks.

At this point, it’s hard to really know what a volume and cpc combination would really bring your bottom line, even if you were certain you could lock up a top ranking. I just bought an exact match domain with over a million monthly exact searches and a lowish but not negligible estimated average cpc. With that kind of volume, I should see some return for sure once my site gets ranking, but it’ll be hard to know the potential until I do get the rankings going, and even then tweaking the design of the site along with the look and placement of the ads can have an important impact.

Even if you can’t predict an exact return on investment, this formula does give you some relative basis for comparison between multiple exact match domain options, or even between keywords in general outside of domaining. Like I said, it does get more complicated than this, but having a starting point for numerical comparison is really handy.

Non-Functional Keywords

Sometimes the volumes and cpc scores are good, but the domain is still potentially not worth buying because of the kind of keyword it is. In scouting for domains for sale at auction, I often come across keywords that were clearly bought for this reason. For example, let’s say ‘garden hose holder’ had great volume and cpc scores, and you could get a good deal on gardenhoseholder.com. While that might be tempting, a site about garden hose holders in particular might come across as a bit strange. Yes, the interest is there, but people searching are likely looking for a site for which garden hose holders represent a single category among others, and as a result, might not so much be willing to click on a domain like yours.

Yes, you might be able to flip the domain to someone not considering this (or who is intending to flip as well), but in general, it’s a better idea to buy sites that could be developed into successes, even if you don’t intend to at all. Have a search for the keyword in question and see what the results show. Would an exact match domain make sense in those results? Even if they don’t, if the volumes and cpc are high enough it may still be worth it. I’m just highlighting a factor to consider.

On the flipside, if a medium volume and cpc could very easily be turned into not only a plausible site but a plausibly clickable search result, then that should boost your interest.

Moving Forward

Do keep an eye out for these kinds of domains. If you’ve been a domainer for a while, didn’t think of domains in these terms, but kept seeing strange amounts of bid interest or high costs on some domains, this could very well be why. Even if this does not become a primary domain evaluation factor for you, it’s still a good idea to always do this kind of check. For some domains it will be totally empty (like short, brandable, meaningless words), but if it seems like the domain is indeed a keyword, it only makes sense to check it out from a keyword standpoint specifically.

But this doesn’t mean search results tell us nothing, or that they aren’t useful. In fact, the quantity of search results, along with the nature of the results themselves, can be a powerful indicator of domain value.

How To Use Search Results Properly

The best case is with an exact match keyword domain, or at least a domain where a keyword figures extremely prominently. A good case for a domain to buy would be one where a search for a specific term in quotation marks yields a high number and high quality results, and where that exact keyword or keyword phrase (without the spaces, of course) is available as a .com.

So, if you see an available domain, check its search results when you add spaces between the words and surround them with quotes. If you can think of a useful phrase that may not be taken, check the results, and check the domain availability. It’s as simple as that.

General Use

If a phrase is used a considerable amount, it is part of society and may be useful. Even if you don’t see the monetization directly, that doesn’t mean it isn’t potentially brandable or useful in another way. I’ve always liked the phrase “what sorcery is this?” and when I ask people about it, most have heard it said before but few could identify it. Sure enough, 55,000 results for the exact phrase, and an available .com. 55,000 isn’t mind-blowing, but the quantity confirmed that it was indeed a said expression. I figured I could use that.

“Official” Use

While the general use section was more about quantity, this is about quality. What’s populating the search results for your exact match search? If you see lots of business, first, and last names, this suggests not only usability and versatility, but potential buyers. This may seem unethical, but you are providing a service in acquiring the domain on their behalf, and should be paid for your time. You aren’t intending to use the domain in bad faith and trying to impersonate their business (hopefully); you are helping them find better and more ways to represent their business.

At the end of the day, search results show the activity of the people, and in trying to gauge the market and value of your existing and potential domains, it doesn’t hurt to have a peek at the search results for your intended word or phrase, no matter what it is. What seems like a random string of consonants can be the acronym of a massive organization. You just can’t know until you look, and it takes less than a minute to find out. Remember the rule: the more you know about a domain, the more you can properly assess its value and potentially justify the buy or sell in your favour.

Domaining is largely about buying and selling based on a variable but approximately measurable perceived value, across a variety of value criteria. Because search engines so often represent such a significant portion of the marketing potential of a website, the domain’s connection search is inevitable.

SEO Value Tools

For those that don’t use them, there exist SEO plugins and toolbars which provide information about a given site, or the list of sites in a page of search results. This information includes domain age, number of pages indexed, Pagerank, information about other sites linking in, and more, which you can customize. These areas represent, to different extents, search engine ranking factors, meaning aspects which, when favourable, make it easier for the site to rank. Whether there is currently a site on the domain or not, this information about it is available, and can help inform you as to how valuable the domain is.

(click to enlarge)

For example, inbound links are massively correlated with ranking potential. In seeing that a large amount of links point to a domain, you see its search engine value (in proportion to the quantity and quality of those links). The more search engine value it has, the more the domain is worth.

I use this as a normal web surfer to see if a site is trustworthy. For example, if a site has 6-figures of links pointing to it, I am likely to trust it, as the web community has, essentially, validated it (you can’t really fake figures that high). Google uses backlinks to determine how much it trusts a website, and if it’s good enough for Google, it’s good enough for me.

Here are a few SEO Toolbars that friends and colleagues of mine use:

SEO Quake
SEO Book
SEOMoz Toolbar

Below is a list of all the factors I know of and use when buying a domain. For given circumstances, they are weighted in different ways, so while I can’t give a weighted list here, know that there is indeed a weighting suitable for your situation. I’ll try to give examples of this in future posts.

Hopefully mentioning the items in this list will help you think in broad terms, helping you thoroughly valuate a domain name before you buy or sell, really. Click on an individual item to learn more. My goal is to expand on each.

Please, if there are factors I’ve not considered here and do not fall under one of these, do let me know. I want this to be the best possible resource.

• Domain History
  • Age
  • Existing Links & Pagerank
  • Past/Existing Content
  • Traffic
• Name Potential
  • Extension (TLD)
  • Brandability
  • Nicheness
  • Ease to Say
  • Keywords (Searches)
  • Search Results for Its Words (Use)
  • Temporality
  • Size (number of characters)
  • Characters (numbers and dashes)
• Purchasing Circumstances
  • Price
  • Your Budget
  • Urgency